In this month’s Relocalize, Post Carbon Institute is turning an eye to transportation—specifically new and old ways to use or replace the good ol’ automobile. And we’re not the only ones. Millions of Americans are now paying over $4 per gallon for the first time.
Every single day, $1.34 billion is spent fueling Americans’ driving habits. In April, American drivers spent more than $37 billion on gasoline—the most in U.S. history. That’s more than a 7% increase over the previous month and 21% over April 2007. And we haven’t hit the peak travel season yet, when prices tend to be highest.
Granted, gas prices in the U.S. are still relatively low, compared to places like Scotland where prices reached $8.30 a gallon and shortages have taken place. But people are paying attention. The downturn in the economy and skyrocketing food and fuel expenses have led to fewer sales of new cars and trucks—particularly SUVs and other gas guzzlers.
In the midst of a heated primary contest, it’s not surprising that the presidential candidates have jumped into the fray, with debates, campaign ads and countless news pieces furiously promoting or deriding the validity of a “gas tax holiday.” First Republican nominee, John McCain, and then Democratic candidate, Hillary Clinton, came out in favor of a plan to suspend the 18.4 cent federal gas tax and 24.4 cent diesel tax during the summer months. Democratic candidate Barrack Obama stands opposed.
We’ll leave it to you to decide if this plan makes any sense. But here are some quick facts to consider. Should Congress pass this “gas tax holiday,” it’s estimated that:
- The federal government would lose about $9 billion in tax revenue.
- When the State of Illinois suspended its 5% sales tax on gasoline in 2001, gas prices fell only 3% while costing the state $175 million in revenue. So where did the rest of the money go?
- Over 280 economists from across political party affiliations have signed an open statement opposing the gas tax holiday on economic grounds, including several Nobel Prize winners.
- The American Road & Transportation Builders Association estimates that the loss of nearly $9 billion dollars in tax revenue could lead to the loss of roughly 300,000 highway-related jobs.
- In the meantime, the average savings per driver over the three months comes out to about $28 or about 26 cents a day.
Though editorial boards and economists of all stripes have come out against the “gas tax holiday” as either fiscally unsound or at best a band-aid for very serious energy issues, scant attention has been paid to some of the more obvious, effective and meaningful ways to reduce the pinch at the pump.
Let’s start with the obvious: driving less. Now, before I get painted as impractical, let’s just consider two relatively benign ways to reduce fuel costs more than the suspension of the federal gas tax:
- Combine errands. Driving just ten less miles a week will save you more money than the “holiday” ($1.64 vs. $1.29).
- Carpool once a week. The average commute in the U.S. is 27 miles a day. So, driving just one fewer day every two weeks will also save you more money ($2.22 a week).
Next, more effective. Again, since the federal gas tax is only about five percent of the cost of the average gallon of gasoline, it’s not hard to come up with solutions that are as or more effective (not to mention, way way cheaper). Here are just a few:
- Drive smarter. Keeping to the speed limit, avoiding quick starts and stops would save the average driver as much as $260 a year, or nearly $10 a week.
- Keep your tires properly inflated. This would increase the average car’s fuel efficiency by about 3% or $1.39 a week.
- Change your air filter every six months or 10,000 miles will increase your fuel efficiency by about 10%. Even after you factor in the cost of a new filter, you’ll still save more money than from any “gas tax holiday.”
The point I’m trying to drive home is not that these alternatives will solve the oil problem. In fact, only one thing will do that: getting off oil. Rather, the point is simply this: Since there are so many simpler and more cost effective things that people can do themselves to reduce the cost at the pump, can we please, please elevate our national discourse to meaningful policies and solutions that are worthy of the energy crisis we face?
cross-posted at relocalize.net