Good and Bad in Curbing Gas Tax

Connecticut's bill cutting the gross receipts tax on gas is a good start, but more action needs to be taken to curtail rising prices.

As gas prices rise higher and higher, people are left scratching their heads wondering when they will start seeing relief at the pumps. 

In Connecticut, the average price of gas is around $4.15 per gallon for regular unleaded.  This is a huge difference from the national of average of $3.93 per gallon, though Connecticut’s average does not come close to the highest in the nation of $4.60 (in Hawaii). 

This past week, Governor Malloy signed a bill that will stop the collection of the gross receipts tax when the wholesale price is over $3, like it is at present.  The bill won’t affect prices too much right now, though, since the tax is about 1.5-1.7 cents. 

While this doesn’t really help anyone right now, it could help out a bit in the future.  Since the wholesale price of gas is already over $3 per gallon and doesn’t look to be going down anytime soon, it could help slow prices a bit if the price goes up again.  Unlike Connecticut’s other tax on gas, the gross receipts tax is not a flat tax.  Therefore, each time the price of gas goes up, so does the amount collected for the tax. 

When the bill was being discussed, it was only going to stay in effect for a year.  After that point, the tax would be collected again, and at a higher rate than it was being collected at.  What does that mean for consumers?  Chances are if the bill were allowed to expire next year, the price of gas will jump once again. 

Unquestionably, something more needs to be done about the rising gas prices.  Prices are increasing and getting to be a strain on everyone’s pocket.  Connecticut’s blockage of the gross receipts tax is a good start, but should not be applauded as a solution to the problem.  It’s merely a band-aid for a larger problem that simply cannot be combated from the state level. 

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Jeff April 11, 2012 at 12:47 PM
What a great guy that Malloy! Looking out for all the little people. Tell you what, pigs will fly when a 1.5-1.7 cent tax savings makes me celebrate. Look around people. This is all a means to pull the wool over all your eyes making you think that caring government is taking care of you. Remember several years ago when gas got up to around $4.40 or so. Well that was with crude at around $150/barrel. It's at around $101 now. So proportionally it's the value of that piece of paper we call a dollar in your pocket that has a lesser value. Why is this? Because the printing presses are white hot in Washington printing out money we don't have to satiate an out of control government. This is a national issue and we are doing nothing to put ourselves on the road to energy independence. 150ft high giant propellers are not the answer and, oh look, neither is Solyndra. Wake up people I'll scream at the top of my lungs until the cows come home but my fear is that we have reached the point of at least 51% of the general public being completely ignorant and apathetic to what really makes the world go round.


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