By Joe Sinagra | The Save Jersey Blog
Mark Zandi, chief economist at Moody’s Analytics, estimates that U.S. consumers could find an extra $100 billion in their wallets this year.
William Dudley, president of the Federal Reserve Bank of New York, says the plunge in gas prices will translate largely into spending rather than savings since the greatest benefit will go to lower-income families. Those families, which often live paycheck to paycheck, “have a higher tendency to spend any additional real income.”
Falling gas prices will free up billions of dollars for consumers to spend next year, with the middle class seeing most of the benefits.
One study estimates that for every 1-cent drop in the retail price of gasoline for a year, American consumers save $1.2 billion.
Fuel savings could amount to nearly $1,100 a year saved for the average U.S. family should petroleum stays at current levels. That’s a huge savings for many families that spend all they earn each month and who haven’t seen their paychecks rise very much since the beginning of the Great Recession.
The price drop in oil could be the biggest economy booster since the recession began in 2008.
Americans spent $370 billion on gasoline last year. With lower prices at the pump, a 60 cents a gallon savings from a year ago, we may see the effective equivalent of cutting taxes in the U.S. by somewhere between $100 billion and $125 billion.
Amazingly?
Democrats in New Jersey want to increase the gas tax and take away the little bit of breathing room many are currently enjoying. Should gas prices head back up in the future, higher gas prices (with the added tax) would be devastating creating a worse economy slump than what we had previously.
Why any of our legislators elected to represent their constituents, who are just climbing out of a pit, want to punish them even further is beyond me. It’s no different than stepping on taxpayers’ fingers just as they are pulling themselves out of the abyss.
It makes no sense to cripple an economy for the sake of a few pennies. The added revenue would help the state’s coffers initially, but it would do nothing for the taxpayers, and like any other tax it would never be enough to meet the states expectations other than looking to increase it further down the road. More businesses and families will move away and, in the long run, our revenues problems will increase, no decrease.
It is never about the taxpayers, and always about taking in more to make up for the mismanagement of funds that were already there.
As always, in Trenton the only way to solve a problem is take the easy way out by raising taxes rather than figure out a way to get the job done without draining the pockets of its providers.
It has been a long winding road for many, and to leave them stranded with no help in sight is just plain laziness.
If the trend continues, there won’t be anyone left to keep the state solvent, and those that are left could wind up at the bottom of the La Brea tar pits.
Tell our representatives the gas tax increase is a NO!
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