This week, from Bachmann to Obama, the focus has been on prices at the pump. It’s been suggested that a steep drop in gas prices would kick start an economic recovery. If that’s true, the question is how to make that happen.
Realistically, the U.S. government only has so much control over the price of gas. Currently, demand is high and the price of oil is controlled by foreign sources. Expanding drilling insider the U.S. would offered some limited relief but that would likely not cause the overall price of oil to drop precipitously.
A stronger dollar would go a long way towards reducing the price of gas – but that’s a circular argument (we’d have a better economy if the dollar were stronger and the dollar would be stronger if we had a better economy).
All of which brings us back to the idea of rolling back the federal gas tax. The federal gas tax sits at 18.4 cents per gallon and hasn’t budged since President Clinton was in office. The tax is used to pay for highway and transportation projects – is it worth it? That leads to today’s Fix the Tax Code Friday question, which is:
Should the federal gas tax be reduced or eliminated in order to jump start the economy?
I want to hear from you! Leave your comments below and then check back next week for my historical analysis of the tax – you know, because I’m a tax geek that way.
