Republicans Heading Off Criticism Over Tax Rebate

Sen. Rick Santorum (R-Pa.), during a press briefing with other Senate Republicans today, addressed criticism over the tax rebate proposal intended to address surging gas prices.

And I know a lot of people have focused in on the rebate and have suggested that that doesn’t do anything to solve the crisis. Well, it wasn’t intended to do anything to increase supply or reduce demand; it was a way of trying to provide some help, some temporary help at a time of gas price spikes this summer driving season.

Santorum continued 

We had considered — in talking in the Energy Working Group — a gas tax holiday — one of the things that’s being proposed by folks on the other side of the aisle. We rejected that because we believe that the gas tax holiday, number one, would be very hard to determine whether the actual benefit of the elimination of the gas tax would actually get to the consumer. The gas taxes are levied very much at the top of the food chain, if you will, and there’s lots of hands that gasoline passes through before it gets in the hands of the consumer. And there’s a likelihood that not all of the gas tax holiday would actually reach the consumer.

Secondly, what Senator Menendez and others were looking at was a 60-day holiday. That would amount to about a $20 savings for the average consumer in America. The $100 tax rebate that we are proposing is roughly nine months of gas taxes paid by the average American consumer of gasoline. So what we’re talking about here is a substantially bigger benefit to the average consumer. It would be, in a sense, a gas tax holiday for nine months for the average American consumer of gasoline, as opposed to a simple one- or two-month gas tax holiday.

And we know the money, all of it, would go directly to the consumer, it wouldn’t be eaten by the oil companies or by distributors or wholesalers or the retailers in taking a penny or two more in their profit as opposed to passing on that entire savings to the consumer.

So while it is not a solution, and we never pitched it as a solution, we pitched it as part of an eight-point plan to increase supply, to decrease demand, and to provide some temporary relief for consumers during this period of high prices.

Tags Business Economics FairTax Fuel tax Gas tax holiday Gasoline and diesel usage and pricing Public economics Rebate Tax Taxation Taxation in the United States

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