Tax Holidays Are Bad Policy, and It’s Time to Get Rid of Them

The federal gas tax, which sits at 18.4 cents per gallon, has remained the same since its inception in 1993, when the average price for a gallon was just a shade over $1. I’ve mentioned before that the gas tax needs to be significantly higher, but we’re not here to get you revved up about that again.

The idea of a tax holiday during either widespread or sector-specific market disruptions makes sense at first blush. The government—state or federal, depending on the tax at hand—can simply wave its hand and knock some percentage off the price of a good or ...