Krislert Samphantharak's Research on Gas Tax Holidays Cited in Forbes
Don’t Cut The Gas Tax For Summer Holidays, Double It
05/27/2011
Howard Gleckman,
Forbes
I woke up yesterday morning to news that the Comptroller of Maryland is urging the state to eliminate its 23.5 cent gas tax for all holiday weekends this summer. The comptroller, Democrat Peter Franchot, has made no secret of his political ambitions and this scheme will surely win him votes. But it is terrible tax policy.
Franchot acknowledges his gas tax holiday would reduce state revenues by about $2 million a day. Maryland, it happens, faces a $1.4 billion budget shortfall for 2012. So why would he propose this? It would, he insists, “be a big boost for the state’s economy and most of all, it would just give our citizens a break.”
I have seen no evidence that the former is true. It may be that lower gasoline prices over an extended period can boost the national economy. But would lowering prices for 2-3 days improve a state’s economy? I don’t think so.
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Krislert Samphantharak can provide commentary about finance and development, family businesses, business groups in East Asia, and formal and informal financial institutions in village economies.
