“The long and sad annals of truly bad ideas”

Would you like to join Henry Aaron in denouncing the “gasoline tax holiday” scam? You can, if you act quickly.

I received the following email third-hand. This is an opportunity to help Henry Aaron of Brookings denounce the “gas tax holiday” scam. If you want to sign the statement, send an email to:


giving your title and affiliation as you want it listed.

Note that the statement is going out within hours, so if you’re going to act you should act quickly.

To All,

I am writing on behalf of Gib Metcalf and myself to ask whether you would be willing to sign the following letter. We would plan to release it later today or early tomorrow. Given the short fuse, I hope that you can agree to join in without editorial change.

An Open Statement Opposing Proposals for a Gas Tax Holiday

In recent weeks, there have been proposals in Congress and by some presidential candidates to suspend the gas tax for the summer. As economists who study issues of energy policy, taxation, public finance, and budgeting, we write to indicate our opposition to this policy. Put simply, suspending the federal tax on gasoline this summer is a bad idea and we oppose it.

There are several reasons for this opposition. First, research shows that waiving the gas tax would generate major profits for oil companies rather than significantly lowering prices for consumers. Second, it would encourage people to keep buying costly imported oil and do nothing to encourage conservation. Third, a tax holiday would provide very little relief to families feeling squeezed. Fourth, the gas tax suspension would threaten to increase the already record deficit in the coming year and reduce the amount of money going into the highway trust fund that maintains our infrastructure.

Signers of this letter are both Democrats and Republicans. This is not a partisan issue. It is a matter of good public policy.

If you are willing to sign on, would you send an e-mail to gastax08@gmail.com. Be sure to list your affiliation as you would like it listed. If there are others who you think would like to sign on, please pass this note along to them.

My own view is that in the long and sad annals of truly bad ideas, it is unusual for one to receive bipartisan support at such high levels right in the middle of a campaign as this one has.


Henry J. Aaron

The Brookings Institution

1775 Massachusetts Avenue Northwest

Washington, DC 20036

The letter isn’t completely precise. The lost revenue from the tax suspension either comes out of the Transportation Trust Fund or it adds to the deficit; it’s not quite right to accuse it of doing both at once. [The Clinton plan calls for a “windfall profits tax,” which, if it were included in the legislation (which of course it wouldn’t be) would protect both the Trust Fund and the deficit. McCain claims that he, too, would protect the Trust Fund by using general revenues, paying for that by “eliminating waste.”]

By the same token, it can’t be true both that the tax holiday wouldn’t be passed on to consumers and that it would encourage additional driving.

Still, the general point stands: this is a truly stupid idea, being pushed by a bipartisan pair of cynical politicians. If by some miracle the ploy were to fail to work, or be seen as having failed to work, the world would become a slightly better place.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com