Jill Long-Thompson On Suspension of Gas Sales Tax
Posted by Jeff Pruitt - 4/2/08 @ 11:26 am - Filed Under 2008 Local Elections, Featured, State Politics
Democratic Gubernatorial candidate Jill Long-Thompson wants to cap the amount of sales tax that’s charged on gasoline so that any portion of the price over $2.75/gallon would not get the sales tax applied to it. I don’t think this goes far enough - back in 2006 state Democrats campaigned on the promise of repealing the sales tax on gasoline altogether and that’s what should be done.
Since the governor and state legislature are hell-bent on holding down local government spending they can lead by example and figure out a way to pay for a complete suspension of the gas sales tax. This tax hurts everyone from working class Hoosiers to major corporations and we’re one of only 8 states that even has the tax.
So while I applaud her plan in theory, if Long-Thompson wants to show her ideas have substance then she should release a fiscal impact study that shows how the state could pay for this tax cut - something her plan is missing right now:
She also doesn’t believe the state would lose $100 million in revenue due to consumers spending their savings elsewhere in the economy.
That type of hand-waving argument will not suffice in our current economic climate and it smacks of Republican supply-side economics - you know “tax cuts pay for themselves”. That’s an idea that isn’t supported serious economists and we shouldn’t let such an intellectually lazy argument creep into this state…
(Photo by Charlotte Weybright of Berry Street Beacon)
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4 Responses to “Jill Long-Thompson On Suspension of Gas Sales Tax”
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Jeff-
Has consideration been given for a flat tax rate per gallon rather than a sales tax? Seems to me that a usage fee would be more appropriate.
I see Jill Long-Thompson addressed this here:
“I do see an additional benefit in tying the tax to the gallons sold rather than the price of gasoline. One of those benefits, in addition to the benefit to Hoosier families, is that you are going to have a more reliable way to forecast what revenues will be coming into the general funds to be used in the budget. Tying this tax to price means that an increase in price means an increase in revenue, and a decrease in price means that less money is coming in. But if this tax is tied to the amount of gallons sold, we will be more able to accurately project how many gallons will be sold, and how much revenue will be created.”
Is she abandoning this approach?
I don’t know Dave - that’s a good question.
I’ll ask…
I remember the last time the gas tax was suspended. More citizens from Michigan, Ohio, KY, and Illinois profited from it than Hoosiers. I remember someone from Ohio telling me that they always came across the Indiana line to fill up their gas tanks. Then, our taxes was raised in other places to make up from the revenue that was lost. That is one thing I will be looking at before I cast my vote.