Dole Calls for Cut in Federal Gasoline Tax

04/30/96

Reuters reported that as gas prices hit a five year high on the commodities market, Senator Bob Dole has called for a repeal of the 4.3 cent per gallon gasoline tax increase that was instituted in 1993. Dole said cutting the gas tax back would reduce driving costs by about $4.8 billion annually.

Dole's office released a letter from Dole to Clinton that said "As I know you are aware, gasoline prices are careening out of control, and are diminishing the value of millions of Americans paychecks.

"As American families prepare for the summer driving season, I hope you will join me in an effort to provide relief to American motorists by repealing the gasoline tax increase..."

Chief of Staff Leon Panetta responded for the White House by saying "In an election year it is hard to separate speeches from serious proposals. If Senator Dole is serious, as we hope he is, he should accept the president's invitation for immediate bipartisan negotiations to balance the budget, reform welfare and cut taxes.

"A serious negotiation would fully consider ideas from both sides."

The White House further questioned Senator Dole by asking where the money to make up the $5 billion cut in revenue that would result from cutting the gas tax. Dole's letter said he hoped the gas tax could be cut "in a manner that will not increase the deficit," but neither included a proposal for doing that nor indicated whether he would offer legislation for the repeal.

The current federal tax on gasoline is 18.3 cents per gallon. The revenue generated by 1993's 4.3 cents a gallon increase in taxes goes to general revenue. Most of the other 14 cents per gallon goes to the highway trust fund.

The U.S. Energy information Administration puts current average costs of gasoline at about $1.30, across the country. In California the average price hit $2.00 per gallon. Energy Secretary Hazel O'Leary this week said high gas prices resulted from firm oil prices based on talks with Iraq and the possibility that they might be allowed to sell oil for food, the unusualy cold winter and anticipation of the summer driving season.

Paul Dever -- The Auto Channel