Sunday, May 11, 2008

MI Republican Non-Solution to High Gas Prices

Can you guess what the GOP solution is for high gas prices? C'mon, I know you can. It's the same solution they have for every problem.

That horse is still dead, but they continue to beat and beat and beat...

Local Republican lawmakers are pushing their own version of a gas-tax holiday in Michigan, proposing to temporarily eliminate Michigan's sales tax on gasoline for the summer driving season.

``We need to do what we can to bring some relief to the residents of the state,'' said Rep. Jack Hoogendyk, R-Texas Township. ``Eliminating the sales tax isn't a silver bullet, but it is something we can immediately do to help deal with high fuel prices.''

Hoogendyk was joined by Rep. Rick Shaffer, R-Three Rivers, and Rep. Neil Nitz, R-Baroda, outside Bob and Kay's Auto Wash on Stadium Drive in Oshtemo Township on Friday to discuss the proposal.

How will they pay for it? Once again they point to the surplus from 2007, which I could swear we have spent a thousand times over by now.

Hoogendyk said that although there would be a $300 million hit to the state, a $350 million surplus from the state's 2007 general fund revenue would cover the loss.

He added that the tax suspension would not affect any other state fund or program and additional money would be generated through in-state tourism as lower gas prices attract travelers.

Nice try, but the increased demand would drive prices right back up again. Jack fails to mention that part. The Livingston Daily Press & Argus also points out the fallacy of the Republican argument by ripping the federal plan proposed by McCain and Clinton, calling it "political pandering" and "ridiculous" - and the same would apply to any state tax holiday. A couple of pertinent points-

Any solution to the gas crunch has to include saving gas by driving less, driving more efficiently and driving more fuel-efficient cars. Having the federal government step in with this gas tax holiday just gives people less incentive to embrace these measures.

Gas tax holidays don't work. States have tried them in the past, and in every case, the reduction in the price of gas for drivers wasn't consistent with the amount of tax suspended. Instead, the average driver only saved about half of the amount of the tax suspension because retailers are not required to pass the savings onto their customers. If the tax goes down 18 cents, there's nothing stopping a retailer from adding that 18 cents right back to the cost of the gas — and pocketing the additional money.

So, the Michigan Republican idea is a non-starter. Just won't work. Got any other bright ideas? Don't think they do, do you?

Much to the Republican's chagrin, people aren't sold by the phrase "tax cuts" anymore. In the recent doom-and-gloom survey from the MSU’s Institute for Public Policy and Social Research, those surveyed indicated that they would like the state government to focus on jobs and the economy, and "tax cuts" barely registers. From Gongwer-

And those polled want state government to get onto the job of helping fix the economy. A total of 41.1 percent said state government should focus on jobs and unemployment, while another 23.5 percent want government to work on the economy and encourage growth. No other issue garnered even 10 percent support from those polled, including cutting taxes which just 7.3 percent of those polled said government should attack.

Pity the Republicans. They have nothing left to sell but their failed economic ideas. And pity us, because we are stuck with the results of those failed ideas, at least for now.