Wednesday, July 31, 2013

Fed up with the gas tax increase? We have your talking points.

The three-cent-a-gallon increase to the Massachusetts gas tax which went into effect today is giving a lot of Bay Staters, well, gas.

As well it should. Three cents a gallon adds up to a lot of money for beleaguered consumers who are already paying a lot at the pump to drive to work and school. Not to mention the fact that the price of that so-called "stay-cation" (you know, the term politicians use to make us feel better about taking a short road trip instead of spending money on an expensive family vacation, since we have no money) just went up.

But, beyond the obvious objections to raising the gas tax, there are several under-reported facts about the gas tax increase which you should know about, particularly if you're thinking about running for office next year against an incumbent Beacon Hill pol. Or, maybe you're just a Republican activist who needs some talking points for your next debate at the water cooler.

Here are your talking points:

1. If someone says to you, "It's only three cents a gallon...":

It's true, the gas tax went up from 21.5 to 24 cents a gallon today. But the real pinch could come starting in January 1, 2015. For the first time in history, the gas tax will be indexed to inflation. It remains to be seen what those increases will be, but at current rates, it's entirely possible that additional increases of two to three cents a gallon will be reality ANNUALLY. And, there's more bad news… while politicians did include a floor for the tax (it can never dip back below 21.5 cents a gallon, if it goes down at all – and by our reading of the language, it will never go down), there is no cap on how high the tax can go.

2. When they say, "Don't worry, we'll fight 'em on the next increase instead...":

With regard to the automatic increase, there are two procedural points to note. First, because of the indexing used, it won't take a subsequent act or recorded vote of the legislature anymore to increase the gas tax in the future. Those increases will be automatic. This is similar to the way Beacon Hill decided to vote itself pay raises every year. Second, the automatic increases are slated to take effect starting on January 1, 2015 – curiously, just a few weeks after the next statewide and legislative elections take place. As Beacon Hill power plays go, this is a pure act of genius. It's also an unfortunate trend that Beacon Hill pols are using to avoid responsibility while at the same time punishing Massachusetts residents for economic progress. Put that in your gas tank and pump it.

3. When people tell you, "At least cities and towns are exempt from paying the tax on police and fire vehicles... They need all the money they can get to keep us safe...":

Au contraire. As noted by DOR on its Web site, "Very few entities are exempt from the excise due on fuel used on MA highways. Exempt entities include: the Federal Government, the Regional Transit Authorities and three state agencies exempted by their enabling statutes (the Water Resources Authority, the Port Authority and the MBTA)." Noticeably absent from this list: city and town vehicles. So, where will cities and towns get the money to pay for this tax increases? One guess – taxpayers.

LATE ADDITION - Here's one more little tidbit for you... At current MA gas prices of about $3.71 a gallon, the state gas tax works out to about 7.3% (24 cents out of a price of $3.286, which does not include the state tax or the federal $0.184 tax), which is a full percentage point more than the state sales tax.

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