Bill Graham thinks the state gas tax should be suspended for the summer.
Echoing a proposal by John McCain, the Republican gubernatorial candidate suggested the state stop collecting gas tax from Memorial Day through Labor Day, saying he did not believe Congress would act on the federal tax.
"With our economy entering a recession and oil prices at record highs, we should alleviate the burden on the citizens of North Carolina," he said in a statement. "I urge those in Raleigh to act and declare a holiday from collecting the 30.15 cents per gallon tax on fuel."
Graham led a 2006 effort that resulted in a cap on the state's gas tax. In january, he called for reducing the gas tax even more.
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Re: Graham calls for gas tax holiday
RTB,
When reporting this issue in the future, please make sure to note that this policy will effectively grant tax breaks to the oil industry.
The following is from economist Dean Baker:
"According to the oil industry, they have their refineries running flat out, producing all the gas they can. This means that the price is determined on the demand side.
We have a fixed amount of gas entering the market, the question is simply what price clears the market. In this context, if we reduce or eliminate the gas tax, the price doesn't change, the lower tax will simply allow Exxon and other oil companies to keep more profits (unless of course they were lying about running their refineries at capacity).
Since most people do not have much familiarity with economics, the media should be informing the public about the impact of a gas tax holiday."