Editorial Board
Matt Bishop
Whitney Gronski
Keiara Tenant
Heather Lockwood
Jahshua Smith
Lifting gas tax won't boost tourism, economy
Gas prices don’t seem to be lowering any time soon, but Michigan residents could be seeing a little relief at the pump this summer.
After Sens. Hillary Clinton, D-NY, and John McCain, R-Ariz, suggested a tax break on gas, local Republican lawmakers are pushing for their own version of a gas tax holiday by proposing to temporarily eliminate Michigan’s sales tax on gas for the summer driving season.
The proposal would cut the 6 percent sales tax from Memorial Day to Labor Day which would lower gas prices by up to 20 cents per gallon. The hope is that the tax break will generate additional money by attracting tourists.
This plan sounds terrific on the surface but if drivers examine what the state would be losing, they might not complain so much about the prices at the pump.
The state would take a $300 million loss if the proposal passes even with a $350 million surplus from last year’s general fund picking up the slack, that’s still a lot of money going down the drain.
The money generated from the sales tax is used to repair Michigan roads. With the past winter being one of the worst in recent years, we can’t afford to skimp on road repairs.
Even if the 6 percent sales tax on gasoline is eliminated, the increased tourism may cause more wear and tear to our roads, leading back to the fact that we need the money from the gas tax to cover the costs of road damage.
Like President Bush’s plan of issuing checks to stimulate the economy, if people use the checks to pay off bills or debt, it won’t have much of an effect on the economy. The same could be said for the gas tax proposal — if people don’t have the time or the money to travel, then what good will it do for Michigan’s tourism sector?
Lawmakers should also take into account Michigan’s declining tourism sector.
In 2007, Michigan tourism declined by 1.8 percent and MSU researchers recently predicted the number of travelers will again decrease by 2 percent in 2008. Chances that the gas tax break will spur tourism are slim.
In reality, other than Michigan residents, who will hear about this gas tax cut? Are we going to spend time and money advertising that Michigan has cheaper gas than some states? Travelers might not jump at the chance of visiting Michigan based solely on our gas prices.
Because Michigan is only one of few states that charge a sales tax on gas, tourists might not choose to vacation in Michigan if their state has never had a sales tax on gas.
It would be a better idea if the state cut only half of the 6 percent sales tax, giving drivers a break at the pump while still giving the state money to be used for other purposes.
This gas tax break might have mattered a bit more a few months ago when the price of gas wasn’t as high as it is today. With the numbers at the pump constantly climbing, drivers might not be able to recognize this small difference.
This issue boils down to what drivers want to suffer most – our tourism sector, roads or our pockets.
Published on Monday, May 12, 2008
Comments
rightsparty
05/12/08 @ 10:21pm
If you go back to 2006, the Democrats said if we elect a Democrat-controlled US House and US Senate in Washington, they would bring down the gas prices.
Well, looks like the Liberal Democrats lied!
Go back and read what Nancy Pelosi, Harry Reid and the Liberal Dems said.
So, why didn’t the Dems lower gas prices?
KuBoots.
05/13/08 @ 8:45am
Great and very true article. How smart is it to build an economy by implementing a tax that would not only be considered money laundering, but keep the mentality that there is no other way to utilize tax dollars. Keep us all on the road, instead of investing in a better energy strategy.
rightsparty: Easy blame, eh. Why wouldn’t you look the overall idea’s that the democrats were presenting. Innovation for alternate fuel sources, like Wind and Solar Power, instead of OIL. President Bush said he would Veto. It’s not just a left issue, everybody needs to be willing to compromise and make smarter changes on and off the road.
getmoney
05/13/08 @ 9:18am
People need to start realizing that the price of gas isn’t going to go down anytime soon. It’s time to start car pooling, driving more fuel-efficient cars, riding bikes, or using public transportation. Cutting prices on gas is obviously a short-term fix that will end up hurting us in the long run. Economists are against lifting the gas tax, but why would we ever listen to them?
Pete
05/13/08 @ 10:21am
Of course, why would we ever want to reduce spending to make up for that $300 million “loss”? Why does gas in Michigan cost more than gas in Hawaii?
No, the price of gas isn’t going to go down anytime soon. But it has become a necessary commodity, like electricity or water. Car-pooling, hybrid cars, and bikes can help some people. But the vast majority are unable to realistically do any of those things. Is the person that is feeling a pinch from $4/gallon gas likely to be in a position to buy a brand new hybrid car? Is the person who commutes 30 minutes each way likely in a position to quit their job and find a new one, or sell their home and move closer to work? These just aren’t options for the majority of people.
The liberal hippies are always idealists, but never see reality for what it is. The reality is that gas could cost $10/gallon, and it wouldn’t change anything except put the lower and middle class in even more hurt, and cause the economy to go into even more of a nosedive. If immediate relief helps, then why not?
KuBoots.
05/13/08 @ 10:42am
Pete, your point was valid and understandable. However, If we continue to spend more and more tax money on a source of energy (Oil) that has been proven to continue in cost, I think you’re wrong to believe that it’s unrealistic to start investing time and money into other energy sources. America has nothing for an energy strategy. An energy plan for Solar and Wind technology would create more jobs, our tax money would be going to programs that would be a probable long-term solution to our energy crisis, and it would make for a cleaner Earth.
OR…. we could just give our money away to China and Saudi Arabia, increase our massive debt, and save a few bucks for now. Maybe I’m wrong.
chains81
05/13/08 @ 11:25am
KuBoots – dead on!
A few cents of relief a gallon now will do nothing for us in the long run.
Pete – your comments show how young your mind is. You need to look at the big picture. Immediate relief will do nothing except put us further in the hole in the long run. You’re right in makeing the startement that gas could end up costing as much as $10 a gallon. It will probably go much higher then that – if we don’t chnage our way of life. You are wrong when you say that car pooling, bikes, hybread cars are unrealistic solutions for the majority of Americans. I live 35 mins from where I work, and there are 11 people living within 5 miles of me. Car pooling IS an option, you just have to do a little leg work to find the people willing to car pool with you.
The main reason we will never get out of this gas crisis is because there are way too many people living the “I want it my way, and I want it now” lifestyle. Be honest, how many times in the last month have you said “No, I’ll take my own car because I may want to leave early/ stay late”?
Wake up people, the time to change was yesterday, not tomorrow. Then it really will be too late.
Pete
05/13/08 @ 1:22pm
Also valid points everyone! I agree, we definitely need to be investing more into alternative fuels and energies. How much better off would we be if we embraced nuclear technology more fully than we already are? Anything to reduce dependence on foreign energies is a-ok in my book.
But I also believe that lifestyle changes just aren’t going to happen. The US is not Asia or India or Europe in culture not geography. People still need to get places, people still need to get to their jobs. At what point do you quit your job because it costs too much to drive? I really don’t think $20+/gal is the breaking point. People would complain, drive up more credit debt, but the people are still gonna be hurting when Exxon reports it’s gazillion dollar record profits for the 10th straight year. People are between a rock and a hard place, and the only real relief is true alternative power sources (which are still YEARS down the road, and that’s just for the early adopters. How long until renewable energy is a commodity feature for vehicles across the whole board?), or immediate temporary relief from lame taxes.
Dan
05/13/08 @ 2:30pm
The tax relief on gasoline is nothing more than political garbage. This so-called break does nothing to address the United States’ disgusting dependence on foreign oil, nor does it encourage liberal Democrats to put aside loyalties to powerful environmental lobbyists and start working with Republicans on allowing the drilling for oil domestically (ANWAR, Gulf of Mexico) until another source of re-newable energy is discovered.
This whole gas mess we are in is simply the result of too much government interference in the market and the asanine agenda of left wing environmentalists.
bbwhine
05/13/08 @ 3:25pm
Dan: Again, not everything wrong in the world can be blamed on liberals anymore then everything wrong can be blamed on conservatives. It’s that kind of BS thinking that continues to plague the solutions to real problems. Even if ANWAR was sucked dry it would only be a drop in the bucket, most likely that drop would end up sold to China before the US saw one f***ing drop. The current “gas mess” is a result of rampant speculation on the oil markets, not something liberals usually engage in in case you’re wondering. Dwindling reserves, nervous investors, nothing liberal about anything there. Our mass transit system was dismantled back in Eisenhowers day to make way for superhighways. Dems. and Republ. all thought shifting transportation money that way was a great idea when oil cost less then a slice of bread, hey why not. Problem is oil is running low and the demand world wide is rapidly increasing and no shift of resources back to mass transit has occurred. Why isn’t there are commuter type train running between Detroit and Grand Rapids or Chicago. There’s plenty of room to run them right down the middle of existing freeways like on the east coast. No money? We can free up quite a bit by getting our troups out of the Mideast, Europe, Japan, Korea, you know some of our main competitors. Let them be their own safety shield instead of us subsidizing there safety. Blame environmentalist all you want, won’t make it true and the oil is till going to run out. Get the bright lights out of your eyes son and take a look around.
KO
05/13/08 @ 7:26pm
A few things to point out. The U.S. imports as much if not more crude oil from North America than it does from the Middle East. 3 of the top 5 exporting countries are in the Western Hemisphere, Canada, Mexico, and Venezuala.
http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html
People like to blame conflict in the Middle East (be it this one or past ones) on driving up oil prices. There is certainly a lot of oil in the Middle East but there is a whole lot spread throughout the rest of the world too.
But really in terms of what we pay at the pump it doesn’t particularly matter where the oil originates. Oil is a commodity just like any other, and as some on here have already pointed out as the rest of the world industrializes and starts consuming large amounts of this commodity, demand goes up. Meanwhile, the actual drilling and production of oil can’t keep up with this rapidly increasing demand so the price goes up. People can blame corporations if they want, but that’s what a corporation does, it responds to the market to maximize it’s profit. Now I’m not arguing that its fair that even with these profits oil companies are receiving tax breaks because it isn’t. But it’s plenty fair that they are making record profits, because that’s the system we live in. Some would argue that the price should be regulated so we little people can better survive, but nobody was making that argument when as a result of market forces gas was less than a dollar a gallon, only about a decade ago. This was a result of an increase in fuel efficient cars which resulted when gas prices were out of control in the late 70’s and 80’s.
In my opinion gas prices aren’t going to go down until the price rises to a point that actually starts forcing consumers to make significant changes in their consumption. I personally leased a Ford Focus that gets well over 30 mpg, so yea it’s still a pain when 20 dollars only gets me half a tank of gas, but that half tank lasts me a heck of a lot longer than it used to.
As for alternative energy, there are very few discussions involving wind/hydro/solar energy involving automobiles. Certainly those technologies can play in important role in reducing oil consumption for electrical consumption in our homes and businesses, but oil is only a small part of that market which also includes Coal, Nuclear, etc.
Ethanol is heavily subsidized just to make it’s price at the pump remotely competitive with gasoline, so it’s definitely not a “cheaper” alternative. Not too mention the long term consequences of converting a primary source of our food supply (Check out the documentary “King Corn”) into energy.
As to the original editorial, the idea of suspending the gas tax is purely a political stunt.
rdhalste
05/14/08 @ 9:46pm
The gas tax is not only a political stunt, but a bad one. Even if we give them the benefit of the doubt it’s misguided. Lower the price and people will just buy more, although 6% is a pittance. Car pooling is no more difficult now than in the 70’s and it worked then. A few still do it. There are many ways to save gas, but drivers have to want to do it whether for the good of the earth, country, or pocketbook. The last will have the widest and most profound effect. Unfortunately the first hit are the ones who can least afford the price while the last to act will be the ones who can most afford it.
I do think the “vast majority” are quite capable of reducing their use of gas substantially, but have convinced themselves they just can’t drive less than they do now.
Ethanol is also a bad idea although as an interim measure it can help us reduce imports. There is a possible wind farm being developed in Gratiot County. If the early tests prove out it could turn into a large energy producer although I don’t know the planned limits to the size of it. OTOH here in Midland (The City of Modern Explorers) they are planning on a large coal fired electrical plant. So much for “Modern Explorers”.
Me? I’m on a pension and SS. So gas prices are a consideration, but I neither blame the government or industry. The industry makes those profits because we purchase to much of the stuff. No one is complaining about Walmart making more than any of the oil companies.
There is no quick fix. New refineries and drilling off-shore or in the Arctic would take a decade to have any impact and that most likely would be minimal while making other problems worse.
We, not government, are the root of the problem. Unfortunately “We” as a group are unable or unwilling to take responsibility, much like blaming the cop for the speeding ticket. “We” are much better at placing blame when government doesn’t bail us out. “We” are great at demanding “someone” fix the problem although no one seems to offer any good solutions.
It’s going to be painful, but the longer we put it off the more painful the inevitable will become.
Chris
05/15/08 @ 1:17pm
How about some different principles.
How about the fact that Michigan continues to raise taxes on residents that continually are feeling the squeeze from a weak economy. Why to provide better state services? You will definatley need them becuase the residents are going to have to rely on the state for assistance.
How about the thought that our 6% sales tax on gas is a tax on a tax? We tax gas on top of the federal and state tax that already is on gasoline. How about the notion that people know how to best spend their money?
Or quite possibly why has the Michigan government grown 5 billion dollars in the last 6 years at a time when our economy has went down the toilet and our unemployment has skyrocketed.
Then there is always the argument that we just supported the best tourism campaign in the country with Pure Michigan with $60 million dollars for the next few years. Whats the point of advertising when people will not go on vacation becuase they have no money?
And besides with the passage of the new Michigan Business Tax the state is going to see a great deal of increased revenue. Do you think the citizens or businesses are going to see lower tax bills? Probably not, do you think the Governor is going to be looking to use that additional revenue for more government programs? Absolutley.
Its the principle that makes more sense… House Republicans are taking a stand saying taxpayers know whats best for their money, not the state.
If we are serious about roads and alternative energy why are we wasting time looking to pass a ridiculous capital outlay budget that gives universities hundreds of millions of dollars when all the students attending our universities are leaving the state. How about we put funding toward developing alternative resources in Michigan and establish ourselves once again.