Drivers and smokers will have to dig a little deeper beginning today with tax increases set to take effect on gas and tobacco as part of the $500 million plan to invest in the state’s transportation network.
Although we supported the plan backed by the Legislature, which was approved with its override this week of Gov. Deval Patrick’s veto, there’s no doubt the higher taxes will create some hardship, particularly for smokers.
The gas tax jumps to 24 cents per gallon from 21 — but it remains the second-lowest of New England states (New Hampshire is lowest at 18 cents per gallon; Rhode Island is highest at 32). Considering the average gas price for regular (87 grade) is $3.67 per gallon, most may consider the additional 3 cents to make little difference.
The real problem is the soaring gas price — up 14 cents on average nationwide this month — and it’s something Congress might fix by tightening rules that allow investment banks to purchase commodities including oil.
CBS News on Monday night reported investment banks so far this year have bought futures contracts for 495 billion barrels of oil — enough to supply the country with oil for a month — which is more than double the amount banks purchased last year. That massive quantity purchased drives up demand, which drives up the price of oil and subsequently what we pay at the pump.
Massachusetts’ 24-cent per gallon tax won’t be going away anytime soon — if anything expect it to rise in years ahead — but tighter regulations on Wall Street might at least give us some relief to offset the tax.
The state tobacco tax — $3.51 on a pack of cigarettes beginning today — is something smokers have a legitimate gripe about. There is no doubt an excessive burden has been placed on those who struggle with addiction. The tobacco tax, at least locally, might result in more cigarette runs to New Hampshire, where the per-pack tax is $1.78. It might also cause others to kick the habit, ironically forcing them to choose health before taxes.