Gas Tax Holiday
The increased fuel prices are hurting the economic in general,although the higher prices that characterized the market the whole of last year have eased down the prices are still not in the level where the consumers can say they are fair. When the fuel prices climb every sector of the economy that is directly or indirectly dependent on this commodity is seriously affected. Higher fuel prices means that the shipping costs will also rise as transporters adjust their prices to reflect the changes that have affected them due to this rise.
This means that prices of most products will increase especially those that must be shipped for a considerable distance. The goods which are manufactured at one point and then transported to the markets will have their prices adjusted upwards due to the increase in the cost of transportation. This increase is directly related to the rise in the cost of fuel. The high fuel prices are making life dificult,this calls for a concerted effort to help ease the burden. There are several measures that have been suggested from various quarters offering solutions to this problem.
One of the suggestions has been the summer tax holiday which was first proposed during the last year presidential campaigns by the Republican Party presidential candidate John Mc Cain. Many analysts opposed the idea claiming that it will have very little impact on the consumer prices as the oil companies might not pass the benefits to the end users. The real benefits according to these anlysts would have been the oil companies as they would continue to make huge profits as a result of reduced taxes during the high consumption period.
The pessimistic analysts did not realize the real benefits that the consumers and more so the motorist would reap from such a move. They only saw this proposal as a method being used by the presidential hopeful to gain poilitcal support. To the contrary this proposal would have seen the oil prices being reduced by a significant margin ultimately helping the consumers to save a good amount of money which could have been used to purchase other basic commodities. This would have eased the burdens that Americans have been experiencing as a result of the high fuel prices they have been paying for a considerable time. (Jacobe,D 2008)
Summer tax holiday means that the government would suspend taxes imposed on gas for a considerable time. This is the time that Americans are making trips to various destination either for holidays or for business purposes. This move would benefit both the government and the citizens. For the American citizens the gas prices would fall. This is good news to the consumers as this would mean that they will pay less to fuel their automobiles. The low income drivers would benefit most as their expenditures on this commodity would go down by a certain percentage helping them to spend the saved amount of money on other crucial bills.
Though the tax holiday would be a short term measure,it would go a long way in ensuring that the consumers do not feel the pinch this summer as they go on their daily businesses. The substantial sum of savings would help them sort their pressing bills. Analysts have argued that instead of giving the consumers a tax holiday ,the government should look on ways to reduce the demand for this product as that is where the real problem lies. They suggest that the product should be taxed more so that the consumption of gas can go down as a result of diminshed demand.
This is a discriminative move as it would serously hurt the middle and low income earners as they would have to pay higher prices than they are currently paying. This would affect every sector of the economy as all the products would be affected. Such a move would have serious repurcussion than imagined as it would make the cost of living move exorbitantly high making life unbearable for the most of the American citizens. Americans have had more problems in the recent past,adding other issues on top of what they are going through would make life very difficult for the most of the citizens.
Suspension of taxes on gas would have a ripper effect on the economy,the government would benefit since the consumption for the product would rise considerably. Tax holiday would on one hand lead to lower gas prices. Those who were finding it difficult to fuel their cars would be in a position to do so as a result of fair prices. This would lead to increased consumption of the commodity. Increased consumption will lead to government collecting the same revenue it would have collected if the tax holiday was not effected.
This means that the government would not loose out on revenue collection as a result of tax suspension as the sales would increase bridging in the gap that has been created by the suspension. Therefore the governments activities would not be affected as it has been argued by the analysts. The government would continue to construct new roads and maintain the existing ones as its revenue would not be substantially be affected in the short preoid that the consumers have been given incentives. (Doren,P and Firey,T 2008)
Savings account for a very important aspect of life,its out of the savings that people are able to finance their future finacial obligation. Through savings the future can be guaranteed. Savings make an individual comfortable knowing that future is well taken care of. Through a summer tax holiday the governement would be sending a very strong message to the people. It would be encouraging them to take a bold step and save the valuable penny that will make their future enjoyable. The tax suspension will mean reduced prices,consumer should take this incentive and save.
They had been spending huge amount of money filling their tanks,the amount saved as a result of price cuts should not be used to finance the increased consumption rather it should its spending should be suspended otr rather saved for future use. This is an investment that Americans would be making further helping them build a stable future. (Doren,P and Firey,T 2008) Summer tax holiday is the best thing that can ever happen to the consumers in this country. This move will not only benefit the motorist but all the consumers as they will enjoy reduced prices more so those who depend on commodities which are shipped from other regions.
For this cut to benefit the intended consumers the government should make sure that the oil companies pass down the benefits of reduced prices to the end consumers. It is only through such a move that the American consumer will benefit. The argument that such a move to ease the burden of the consumers does not make economic sense might be true but at the end of the day the low and middle income earners will have borne an easy burden as the government comes out with the measures to solve this problem once and for all.
The effects of this tax holiday would be felt by the people who have been suffering due to the rising oil prices. They would be given a reprieve though for a short period but it would have made a significant change in their lives. Any proposal to reduce the burden being carried by any ordinary citizen is welcome as it will enable them move on as a permanent solution is sought to solve the problems that are facing this nation. (Dobbs,M 2008) Work Cited
Jacobe,D Majority of Americans Favor Suspending Federal Gas Tax (2008) Retrieved from http://www. gallup. com/poll/107257/Majority-Americans-Favor-Suspending-Federal-Gas-Tax. aspx on 11th May 2009-05-11 Dobbs,M Gas Tax Holiday Facts(2008) Reterived from http://www. newsobserver. com/news/growth/story/1054997. html on 11th May 2009 Doren,P and Firey,T Understanding the Gas Tax (2008) Retrieved from http://www. cato. org/pub_display. php? pub_id=9398 on 11th May 2009Sample Essay of RushEssay.com