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Suspending Gas Tax: Like Putting Lipstick on a Tasmanian Devil

ACCORDING TO LIZ - Pain at the pump is national and international news and there are all sorts of solutions circulating the real world and the metaverse. 

These range from bicycling to work to opening up the Arctic to drilling, from enabling a recession to reduce demand, to taxing the excess profits the gas production supply-chain is pickpocketing from their customers’ wallets. 

The last probably has the broadest public support but those in Sacto and on the hill are too personally tied to the oil industry largesse and pressure from their lobbyists. 

Instead Biden has called on Congress to lift the federal portion of gas taxes at the pump for a measly three months. 

And how much impact will a savings of 18.3 cents a gallon (24.3 cents for diesel) have on most Americans? 

Even given the price at the pump is approaching a national average of $5 a gallon ($7 for diesel in California) with numerous spikes reported well above such average, this would translate to a saving of under $2.75 every time they pumped 15 gallons or $35 from now until the end of September. 

$35. Lipstick on the inflation pig. But that’s insulting pigs. 

And it doesn’t help the hundreds of millions of Americans that don’t drive or don’t go through 15 gallons a week. They still have bills to pay. 

Furthermore, these fuel taxes – probably $10 billion for the three months – are needed by the Highway Trust Fund to maintain roads, bridges, and other infrastructure. Do we really need highway projects to stop, laying people off and contributing to continued infrastructure deterioration? 

Congress seemed underwhelmed as well. 

A similar proposal by Maggie Hassan and Mark Kelly introduced in the Senate in February would have put the federal fuel tax on hiatus until the end of the year but it, too, has gone nowhere fast. 

Opponents just don’t see that such a minor reduction, if it even lowers the cost of gas at all, would bring much relief to the American public which faces rising prices across the board. Furthermore, people can already see how poorly this approach has played out in real life.

Connecticut temporarily removed its 25 cents a gallon motor vehicle tax from April to the end of June, but last week the average price of a gallon was up about 63 cents from before the tax was suspended. 

Maryland lifted its 36 cents a gallon tax on gasoline (37 cents on diesel) for 30 days in mid-March, and the price at the pump dropped 21 cents on average. 

But if drivers saved 21 cents who pocketed the remaining 40%? 

While Governor Gavin Newsom wanted to only help car owners with a $400 (the equivalent of saving the tax on weekly fill-ups for a full year) rebate per vehicle for up to two vehicles per household, other state officials wanted to put money directly into the pockets of all Californians including people who use public transit, zero-emission vehicles, bicycles, are unemployed or simply work from home. 

An earlier proposal to suspend California’s 51-cent-a-gallon gas tax failed, in part due to its inequity as well as the need to fund ongoing transportation projects. And that there was absolutely no guarantee oil companies would pass the savings onto consumers. 

So who does Biden’s proposal benefit? 

Obviously, the government that can now claim it is doing something. Although $35 for those who drive gas-operated cars seems pretty paltry. 

Lipstick.  And will it be even that much of a savings? 

In conjunction with his fuel tax holiday, Biden called on these corporations to use their profits to boost refining capacity and on fuel retailers to pass on the reduction in prices resulting from the potential lifting of federal taxes to customers. 

But the world’s oil companies really are Tasmanian devils, Tasmanian devils known for their lack of socialization, pungent smell, strong bite and ferocity when feeding. 

In today’s world of corporate greed, does anyone really think the oil companies would follow the President’s request? 

For decades oil producers have leveraged connections in government for tax breaks and incentives to drill, baby, drill. Through their good buddies in the CIA, they have overthrown foreign governments who sought to nationalize resources. 

They have killed (e.g. Deepwater Horizon, the indigenous people of South America), spun the truth and outright lied on the impact of fossil fuels on global warming, and strong-armed the American justice system to overturn pollution settlements. 

Furthermore, there is a strong argument that a significant gas tax holiday would encourage more driving rather than using the pain to accelerate the transition to clean energy, feeding oil company profits. 

Right now the industry is fighting tooth and nail against the prospect of a windfall tax while prioritizing stock buybacks which serve to increase earnings per share and inflate the company’s price on Wall Street (and in their executives’ pockets). 

And they are trying to use the rising cost of oil due to Russia’s invasion of Ukraine to justify more handouts, and more relaxation of regulations designed to protect people not profit. 

The growing environmental constituency strongly opposes any expansion of oil and gas exploration, production, refining, distribution, and all use of fossil fuels. This includes increasing production for export to fill the void created by the ban on Russian oil. 

Sometimes we need pain to make us grow. The world’s dependence on fossil fuels and the support of oil companies to prop up governments, buy elections and act against the interests of the people has to stop. 

What better time than now? 

Take a hard look at what is driving costs up. 

It is not inflation in earlier iterations of the word since it is not increased salaries at fault, salaries that have been stagnant against the cost of living for decades. 

The United States is facing a combination of supply-chain issues ostensibly dating from the beginning of the pandemic but primarily caused by the off-shoring of American manufacturing and jobs going back to the WTO and NAFTA, along with the morphing of family-run neighborhood-centric businesses into larger companies which merge into monopolies and then into the multi-nationals that abjure loyalty to any one country, or any people. 

Those in California who suggested a check for everyone, giving back to the people and not the corporations, have the right of it. 

The risk of Biden’s tax holiday is that in trying to put lipstick on the Tasmanian devil, the industry will bite the government’s hand with such strength that it will negate all progress to date on mitigating climate change. 

(Liz Amsden is a contributor to CityWatch and an activist from Northeast Los Angeles with opinions on much of what goes on in our lives. She has written extensively on the City's budget and services as well as her many other interests and passions. In her real life she works on budgets for film and television where fiction can rarely be as strange as the truth of living in today's world.)