There’s a reason besides OPEC that truckers and everyone else are paying through the nose for fuel. It’s taxes. Because federal excise taxes on motor fuels are folded into the per-gallon price of both diesel and gasoline, few drivers realize just how sharply they’re being gouged each time they pull up to the pump. For truckers, the rate is a confiscatory 24 cents per gallon which, before the OPEC squeeze pushed diesel to nearly $2 per gallon, represented a tax of about one-fourth the “real” cost of the fuel, or around 20 percent. Federal and state taxes on gasoline combined average around 40 cents per gallon; in some states (such as Connecticut, for example), it is considerably higher. Bear in mind we are paying this tax out of a dollar that has already been reduced to 60 cents or less by the myriad other federal and state levies income taxes, property taxes, sales taxes, etc. that assault our wallets before we get anywhere near a gas station.
Republican Sen. Ben Nighthorse Campbell of Colorado has the right idea. He has put forward a bill that would suspend the 24-cent federal excise tax on diesel fuel as a way to ease the burden facing America’s truckers and the threat that higher transportation costs imply for the economy. And that threat will become real enough, soon enough, when the extra costs being borne by truckers translate into higher prices for groceries, clothes and all the other things transported by over-the-road truckers. Mr. Campbell is also to be lauded for intimating, through his spokesman, that it’s time to reconsider U.S. energy policy specifically, by increasing U.S. oil production so as to ease our growing dependence on the Middle East oil cartel, OPEC. Environmental restrictions and agitation by environmentalist groups have prevented or limited exploitation of vast reserves under control of the United States in Alaska and offshore. Given modern extraction techniques which pose minimal real danger to the environment it seems crazy not to take advantage of the resources we have and instead prostrate ourselves before OPEC.
The National Taxpayers Union, meanwhile, has proposed an immediate and permanent reduction in all motor fuels excise taxes of 10 cents per gallon. NTU also advocates tapping the Strategic Petroleum Reserve as a means of stabilizing crude oil prices and has asked New Jersey Rep. H. James Saxton to declare a national emergency a necessary legalism before the reserves may be used.
The only problem with tapping the Strategic Petroleum Reserve is that it would take at least several weeks for the oil to reach the general marketplace possibly after the OPEC cartel has increased production (a meeting is scheduled for late March). Also, there is the issue of tapping the reserve intended as a bulwark against an emergency or military crisis for what is essentially civilian relief during a relatively minor and probably temporary surge in fuel prices. We should nevertheless remind OPEC that this remains a possibility if they decide to keep turning the screw on American consumers.
So far, President Clinton has been noncommittal, if not dismissive, toward any repeal or lowering of the motor fuels excise tax which isn’t surprising given that the president is responsible for at least some of the current, offensively high tax on gasoline and diesel, having pushed a 5-cent increase into law a few years back.
Given all we pay in taxes and truckers pay far more for the privilege of bringing us the commodities we need it is high time the federal government return at least some of the lost lucre via a reduction in the motor fuels excise tax. The only thing wrong with Mr. Campbell’s proposal is that it would be a “temporary” measure if enacted. Permanent relief would be more like it but perhaps that’s too much to hope for.