Pain at the pump prompts Maryland, Georgia to suspend gas tax
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With gas prices soaring nationwide, Maryland and Georgia have become the first states in the union to temporarily suspend their gas taxes. The measure in Maryland will be in effect for 30 days, saving drivers 36.1 cents per gallon on gas, or 36.85 cents per gallon on diesel fuel. Georgia's suspension will last through May 31, suspending levies of 29.1 cents per gallon on gas, and 32.6 cents per gallon of diesel.
Bigger picture: A dozen other states are considering similar measures, with Connecticut set to vote on a gas tax holiday later today. There are also several proposals on Capitol Hill to suspend the federal gas tax, which is 18.4 cents per gallon, though such a move would be unprecedented. There has never been a federal gas tax holiday in the history of the U.S., while past breaks on state gas taxes have mostly been limited to a few days.
Over in Maryland, the gas tax holiday will save the average consumer around $15 over the course of the month, but it will end up costing the state over $100M in revenue. While the measure is overwhelmingly popular, some warn it could eventually add to the tab of the taxpayer down the road, hurting budgets and infrastructure spending. "Producers are going to be the ones to really get the benefit of that tax decrease," added Kent Smetters, a former economist at the Congressional Budget Office. "They're the ones with the power here."
Other ideas: The White House has reportedly dropped a proposal to send out pre-paid gas cards, given strong opposition in Congress over the plan's viability and effectiveness. Delivering the cards could also distract the IRS in the middle of the tax filing season. Regular gasoline now averages $4.23 per gallon, according to AAA, down about 7 cents from a week earlier, but up from $2.87 one year ago.
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