Why stop with the STATE gas tax? (A way to cut about 50 cents / gallon MORE)

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We posted on September 28 and September 29 about efforts in Georgia and Texas to provide aid to folks at the gas pump.  Both posts drew a lot of eyes — becoming by far the most read on our site in months.  Something was clearly afoot.

At the end of last week, we heard of plans to hold a special session of the state legislature in Raleigh aimed at following in the footsteps of Georgia and Texas – suspending the state gas tax.

This could have been tried much earlier.  The cynic in me can’t help but note the proximity of this move to the upcoming election — where a lot of incumbents are in danger of becoming unemployed. 

Our state gas tax is at 41 cents per gallon.  Critics are suggesting that’s not much savings for a driver with a 12-gallon tank.  But think about it on a more grand scheme.  Higher cost of fuel knocks up the cost of transporting goods to market — thereby jacking up the prices we see in the stores.

Conservative economist Steven Moore – one of the smartest guys I know of when it comes to talking about the economy — has been touting an idea to create even more savings for consumers at the pump.  Though, much of his plan requires help from Washington. 

In the below diagram, Moore provides an average price per gallon – which may differ with your geographic location and / or proximity to certain stations.   He also estimates a state gas tax of 33 cents per gallon.  Plug our 41 cents in there. 

That’s about 50 cents per gallon above and beyond the state gas tax. 

The Renewable Fuel Standard is a federal mandate meant to force us away from * bad, bad* gasoline and toward *clean energy.*  Like most government mandates, cost gets added to whatever gets regulated.

Here’s the low-down on The Jones Act:

[…] The Jones Act of 1920 requires that goods shipped by water from one U.S. port to another be carried by vessels that are U.S. built, U.S. owned, U.S. crewed, and fly the U.S. flag.1

These restrictions have the effect of increasing the cost of domestic shipping, also known as

cabotage, relative to the cost of sending goods over an equivalent distance internationally.

This policy has been cited as increasing the cost of everything from road salt in New Jersey,

to hurricane aid relief in Puerto Rico, to offshore wind in Massachusetts (Bergstresser and

Melitz, 2017; Lee, 2023). Estimates of the economy-wide costs imposed by the Jones Act

have ranged from $696 million to $19 billion annually (U.S. International Trade Commission,

2002; Gourdon and Guilhoto, 2019). […]

If all this happens, it could save North Carolina drivers roughly 91 cents per gallon at the pump. And we’re sure there’s more that could be looked at.