Lower Gas Taxes Won’t Equal Lower Prices, Democrat Says

July 15, 2008 - 6:41 PM
A price cut stemming from lower&nbsp;federal and state gasoline taxes probably would not be passed on to consumers, Sen. Ben Nelson (D-Neb.) told <b style="mso-bidi-font-weight: normal">Cybercast News Service</b> on Tuesday.
On the Spot (CNSNews.com) – If Congress were to lower the federal and state taxes currently levied on gasoline, a price reduction would probably not be passed on to consumers, Sen. Ben Nelson (D-Neb.) told Cybercast News Service on Tuesday.
 
But two Republicans said they think a tax cut would provide short-term relief.
 
“No,” said Nelson. “State and federal gas taxes wouldn’t translate to cheaper gas for consumers. I think if you pulled off the federal gas tax, the price of gasoline at the pump will rise to meet where it was, and so you won’t end up with necessarily cheaper fuel.”
 
“They [the consumer] will never see the difference,” Nelson said. “I don’t know that it happens automatically, but gas is rising fast. Maybe you can always say it will be that less forever if you cut those taxes, but I don’t think you can guarantee that.”
 
Rep. David Davis (R-Tenn.), however, disagreed, saying, “Yes, it would be a good short-term solution to the problem of high gas prices. But we also need to do more, like increase domestic drilling.”
 
Rep. Rob Bishop (R-Utah) told Cybercast New Service though he is unsure if gas prices would be lowered, he would nonetheless support the cut. “I don’t know, but if you ever ask me to lower taxes for even a short period of time I have a hard time saying no,” he said.
 
“I actually wish we could just get rid of the federal side and let the states take over – I think they would do a much better job than we do,” he said. “But getting rid of the taxes is not the long-term solution. It’s a short-term (solution).”