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A marquee displays gas prices of over $5 a gallon in San Francisco.

A marquee displays gas prices at a Shell station on Monday, Nov. 22, 2021, in San Francisco.

Noah Berger, Associated Press

Biden’s gas price dance and state tax holidays accomplish nothing

The best responses to high prices are too boring for some politicians who want to appear to be doing something heroic

SHARE Biden’s gas price dance and state tax holidays accomplish nothing
SHARE Biden’s gas price dance and state tax holidays accomplish nothing

From time to time, politicians face an age-old conundrum. Should they do a boring thing that makes fiscal sense or an imprudent thing that makes people feel good, garners headlines and improves poll numbers?

Some choice, right?

When it comes to rising gas prices, the urge to resist prudence can be overwhelming. Almost everyone drives, and despite the well-meaning efforts of many policymakers, almost everyone who drives still has a gas-powered car.

Which is why, with gas prices exceeding $4 a gallon in many states, it’s not surprising President Joe Biden felt the need to do what the Washington Post editorial page called the “two-step ritual” that seems to be required under such circumstances.

Step one: Order an investigation into price gouging by major oil companies, even though no evidence of such a thing exists. Step two: Release oil from the nation’s strategic reserve, even though the 50 million barrels he recently decided to release covers only a bit more than two days of consumption in the United States.

The Post, hardly the most conservative paper in the land, said these things accomplish only one goal, “making it appear that the president is doing something about gas prices,” when in fact, he isn’t.

But this behavior is hardly confined to Democrats. Ron DeSantis, Florida’s Republican governor, announced a few days ago that he wants to suspend that state’s gas tax. Completely. 

He’s asking the Legislature to set it at zero for the time being, or at least until prices come down. This would eliminate him having to mess with the confusion of supply and demand. Take away the tax and the cost of gas drops by about 25 cents a gallon immediately. Cue the applause.

Not to be outdone, one of the leading Democratic candidates who hopes to unseat DeSantis next year immediately jumped all over the governor for his announcement — but only because he wants the Legislature called into session right now to do it, rather than wait until next year.

Not coincidentally, DeSantis timed his statement for the beginning of the Thanksgiving weekend, just when Floridians were filling up for the drive to grandma’s house.

Eliminating Florida’s gas tax would cost the state more than $1 billion, according to Channel 4 in Jacksonville. But that doesn’t concern DeSantis because these are unusual times — so unusual that many states once on the verge of insolvency are now rolling in money. A report in The Hill earlier this year called it “an embarrassment of riches, funded by a booming stock market, rising wages for those at the upper end of the economic stratosphere and what economists say is an unprecedented shift in the way consumers are spending their money.”

We’re buying more online, and a Supreme Court decision a few years ago means we’re also paying sales taxes on those purchases.

Utah, by the way, is among the states with a surplus, although it never was staring into the abyss of insolvency. A recent Tax Commission report said individual income tax collections in October were 53.3% higher than the same time last year. Corporate tax collections were up 108.7%, and sales tax was up 15.4%.

Unlike politicians elsewhere, Utah’s legislative leaders tend to avoid gimmicks like gas tax holidays. But they may have difficulty dealing with surpluses next year without cutting taxes somewhere, even though the excess funds may be a temporary thing due to federal aid and pent-up pandemic demand.

Gas taxes are a tempting target because fuel-efficient cars and hybrids are making them less efficient, anyway. But, as Jared Walczak of the Tax Foundation in Washington wrote last week, it would make more sense for a state to pay down debt, shore up public employee pension funds, replenish rainy day accounts or find some other, permanent tax relief. 

Something boring and responsible, in other words. Something you can’t put on a campaign sign.

But boring and responsible pays off over time. As the Washington Post editorial page reminds us, gas tax gimmicks won’t reduce the nation’s reliance on oil or push it toward electric cars.

“If, years down the line, presidents are still performing the oil-price two-step, it will represent a massive national failure,” the Post said. The same can be said for state leaders who want to look like heroes for a while.

I’m not holding my breath.