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Opinion: Good reason for a gas tax holiday

It was a gutsy call when Gov. Gavin Newsom in late February suggested a gas tax holiday. That kind of move has been anathema for California governors since the 2003 recall of Democrat Gray Davis in favor of movie muscleman Arnold Schwarzenegger.

Schwarzenegger made hay on the false assertion that Davis added a new gas tax that year, even though all he really did was restore a levy he previously put on pause for more than a year.

It became Schwarzenegger’s key issue during that campaign, and it worked. No one remembered that Davis saved millions of people hundreds of dollars each over the preceding year. All they noticed was that they were paying more at the pump.

Now comes Newsom, not exactly calling for a tax reduction. He recommends putting in abeyance indefinitely a 51-cent gas tax increase scheduled to take effect this summer. He has to know there will come a time when the state will need that money and either he or a subsequent governor will have to let the tax hike take hold.

He knows this could lead to a second recall against him even if his likely reelection this fall goes smoothly.

While Newsom acts unfazed about that possible outcome, Sacramento’s other two top leaders hesitate to give Californians this little bit of inflation relief.

In a joint appearance before the Sacramento Press Club, both state Assembly Speaker Anthony Rendon and state Senate President Toni Atkins expressed misgivings.

Both said they think not charging the new tax, mandated by a years-old law, could cost jobs by reducing funds for transit operations, road maintenance and highway construction.

Said Rendon, “I think that’s something that could potentially jeopardize a tremendous amount of jobs… it could inhibit economic growth in certain sectors in this state.”

He and Atkins showed most concern about effects on members of building trades unions, outfits among the leading backers of Democratic legislative campaigns.

But there’s no reality to this worry, and they both know it. The approximately $500 million a one-year gas tax holiday would cost can easily be made up by tapping California’s current huge budget surplus.

Said Senate Republican leader Scott Wilk of Santa Clarita, “Democrats are tone deaf if they think people don’t need a break at the pump.” In fact, California gas prices in late February averaged $4.82, highest in the nation. In some places, posted prices climbed well over the $5 landmark.

Wilk is correct. There’s no doubt the state can afford to give drivers — most Californians — a break when it is spending billions of dollars on the homeless, a highly visible but actually tiny portion of the populace.

This is especially true now, when some legislators are actively considering a proposed new tax on the stuff owned by — not the incomes of — persons with assets valued at more than $50 million.

Even if they are not producing income, say these ultra-liberal Democratic lawmakers, those assets further the passing on of generational wealth and passively but steadily add value. Assets involved include homes and stocks that pay no dividends, but consistently gain market value.

The measure is sponsored by Assemblyman Alex Lee of San Jose, who aims at the 15,000-plus wealthiest folks in California. He would tax anyone with a net worth over $50 million at 1 percent and apply a $1.5 percent levy on those with more than $1 billion in net assets.

“We want the obscenely ultra-rich to be paying their fair share,” Lee told a reporter.

This, he says, would add about $22 billion to the revenues of a state which already sports a budget surplus almost double that amount, with legislators unsure what to do with all the money at their fingertips. The asset taxation plan, novel except in the property tax realm, would need voter approval to be effective even in the unlikely event legislators pass it.

This is but one example of the kind of funding source the state could tap to replace any gas taxes it forgives. Which is just one more reason why it’s a good idea to give average people a break right now at a very visible place, the gas pump.

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Email Thomas Elias at His book, “The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It” is now available in a soft cover fourth edition. For more Elias columns, visit


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