Friday, May 2, 2008

Economists Against the Gas Tax Holiday

Posted at the Politico, a list of 150 economists against the gas tax holiday:

PDF statement

In recent weeks, there have been proposals in Congress and by some presidential candidates to suspend the gas tax for the summer. As economists who study issues of energy policy, taxation, public finance, and budgeting, we write to indicate our opposition to this policy. Put simply, suspending the federal tax on gasoline this summer is a bad idea and we oppose it.

There are several reasons for this opposition. First, research shows that waiving the gas tax would generate major profits for oil companies rather than significantly lowering prices for consumers. Second, it would encourage people to keep buying costly imported oil and do nothing to encourage conservation. Third, a tax holiday would provide very little relief to families feeling squeezed. Fourth, the gas tax suspension would threaten to increase the already record deficit in the coming year and reduce the amount of money going into the highway trust fund that maintains our infrastructure.

Signers of this letter are Democrats, Republicans and Independents. This is not a partisan issue. It is a matter of good public policy.

I skipped the signatures that followed. Among academics, besides the big names like Heckman, Stiglitz, Kahnemann, Stiglitz and Schmalansee and public finance experts like Alan Auerbach and Jeff Liebman, there are some younger applied micro economists on the list whose work I admire like:

Michael Greenstone, MIT
Seema Jayachandran, Stanford
Adriana Lleras-Muney, Princeton
Jesse Rothstein, Princeton

Also, its notable that Becky Blank who used to be on Bill Clinton's CEA is also on the list!

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