Filling Up on Gas Tax Politics

Republican politicians are posturing on the gas tax. That said, so what! On this one, even Democrats are having difficulty objecting.

It’s not that lowering the tax will significantly reduce the pump price of gasoline. It’s that the GOP targets--especially in Sacramento, but also in Washington--are basically indefensible.

The proposal getting all the attention is U.S. Sen. Bob Dole’s bill to knock 4.3 cents off the federal tax of 18.4 cents per gallon. Unlike the rest of the tax, that 4.3 cents is spent on general government--welfare, the military etc.--and not earmarked solely for transportation projects. Motorists have a right to expect that their gas taxes will be used to maintain and improve the highway system. But in 1993, President Clinton and the Democratic Congress rammed through the 4.3-cent gas tax hike to help reduce the deficit.

Now, the jump in gas prices has made that 4.3-cent surcharge highly vulnerable. And it has handed Dole a windfall opportunity to remind voters that he and the GOP--unlike Clinton and the Democrats--are America’s anti-tax crusaders.

Ditto in Sacramento, where a little-noticed bill has been introduced by Assembly Speaker Curt Pringle (R-Garden Grove). His proposal is even more compelling than Dole’s. It would eliminate a “double tax”--a tax on a tax. And what could be more unfair than that concept?

In California, motorists pay a sales tax on the price of gasoline, which includes the federal and state gas taxes. So they’re paying a sales tax on the gas tax. Adding the state’s 18 cents per gallon gas tax to the fed’s, the total comes to 36.4 cents. The sales tax averages 7.9%, so the double tax amounts to roughly 3 cents per gallon.

Pringle wants to junk the double tax. “I’ve always thought it was very unfair,” he says. “And then this opportunity came up.”

*

Actually, Pringle went about it all wrong, at least according to the modern manual of media manipulation. Any too-clever “communications consultant” would have advised the speaker to call a so-called news conference, stand on stage with boring charts and a gaggle of windbags and read a tedious statement that insulted everyone’s intelligence.

Rather, Pringle happened to be hanging around a handful of reporters and answering questions. One asked whether he had any solution for rising gas prices. Click. The light goes on. We could rid ourselves of the double tax, he ad-libbed. Then he told an aide to prepare a bill.

No strategy sessions. No focus groups. No crib sheets. Just spontaneity and the creation of a nice little political weapon.

On the other hand, nobody gets credit for courage here. Taxes are an easy target, unlike big oil. Republican legislators are laying off the oil companies, which enjoyed robust first-quarter profits while bumping up gas prices.

GOP Atty. Gen. Dan Lungren, however, is quietly investigating the industry’s pricing methods to determine whether there have been antitrust violations.

In the Senate, two Democrats are going after the oil companies with a proposed “excess profits tax.”

Sens. Mike Thompson of St. Helena and Daniel E. Boatwright of Concord--both influential committee chairmen--are sponsoring a bill that doesn’t just dump the double tax. It would remove most of the sales tax--6 cents on the dollar--from the entire pump price. The $1.2 billion revenue loss would be replaced by the new excess profits tax. And oil companies would be prevented from recouping the money from consumers.

“If the price of gasoline comes way down and the oil companies can justify every penny, I’ll declare victory and celebrate. There’ll be no need for our bill,” Thompson says. “But if this has to become law and we have to become involved in gas pricing, so be it.”

Nice-sounding threat, but the odds of this bill passing the GOP Assembly and getting signed by Gov. Pete Wilson are about the same as the world returning to 29-cent gasoline.

Pringle’s bill has a much better chance, but even the governor is likely to wince at its $383-million revenue loss. That’s the amount Californians now are being double-taxed.

*

And who’s to blame for the double tax? This time, Wilson’s clear. Jerry Brown? Keep on going.

It was that great anti-tax crusader, Ronald Reagan, who insisted “taxes should hurt” and raised them in record amounts. Not only did Gov. Reagan sign the double tax in 1971--the aim was to help local transportation--he later vetoed a repeal bill carried by the original author that the Legislature passed almost unanimously.

Reagan could explain away a double tax. But there’s nobody at the Capitol these days who can.