Georgia’s Governor Brian Kemp has declared a state of emergency in order to pause the state’s 31-cent per gallon gas tax. The Republican politician claims that the measure will help fight the effects of inflation, but experts question the efficacy of the measure.
In his announcement, Governor Kemp took a shot at the White House, saying that the measure would offer relief from “the disastrous effects of Bidenomics.” Ironically, many argued against such a tax holiday when Biden proposed it in 2022.
Gas taxes are not well targeted at the middle and low-income households that need relief the most, instead giving rich Americans who drive a lot already another break, reports Project Syndicate. In addition, the artificially reduced gas prices could actually increase demand, which risks worsening inflation, not improving it.
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Meanwhile, gas taxes put lots of money in government coffers, which are important for maintaining roads and other public works. In 2022, Governor Kemp paused the state’s gas tax for several months, which cost it $1.7 billion, according to the politician.
Experts suggest that there are better ways to offer economic relief to Georgians who need it the most. Jared Walczak, vice president of state projects at the Tax Foundation (a right-leaning think tank), told Market Watch that lower state income tax rates and lower sales taxes could do more to support residents.
Meanwhile, the claim that inflation is high because of the White House is also dubious. Although August’s inflation was the highest in the last 14 months, it was largely driven by higher oil prices. That has been caused by tight supply due to cuts in Saudi Arabia and Russia, among other factors.
Although the price of oil is at a 14-month-high, the price of the gas at the pumps is actually lower now than it was a year ago, meaning that a tax holiday is unlikely to do anything to help inflation, and will do little in the face of further problems, per Devin Gladden, a AAA spokesman.
“To single out that this measure to fight inflation doesn’t take into account we are in hurricane season,” he said, adding that the measure begs the following question: “Will it help to solve the problem, or create more because of the lost tax revenue?”