A Gas Tax Holiday Is An Awful Idea
Whenever we hear something like ‘tax holiday’, it sounds like a good idea. Who likes taxes? However, that is not what is going on with the gas tax holiday. The tax holiday is being proposed as a relief to consumers because of inflation.
The reality is that a gas tax holiday would just make things worse. It would encourage people to consume more oil, which doesn’t help the oil supply. You’ve probably heard that the cure for high prices is high prices. Higher prices discourage consumption, and high prices encourage suppliers to produce more. That’s the function of prices, so it’s not as if prices don’t serve an important function.
So far, I’m just assuming that the tax holiday will be temporary; however, we all know there’s nothing more “temporary” than a government program (i.e. permanent). If the tax holiday is not permanent, then voters will not be happy once the tax is re-implemented. Because of that very fact, it’s not clear that such a tax holiday would be temporary (because politicians don’t want to anger their voters).
Beyond that, a gas tax holiday doesn’t get to the root of our problem. The root of our problem is not a shortage of oil, a shortage of…
