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Bill proposal would repeal gas taxes

A bill introduced Monday by Sen. Dave Zien, R-Wheaton, and Rep. Jeff Wood, R-Chippewa Falls, proposes to repeal the Minimum Markup Law while also enacting certain prohibitions in the sale of gasoline.

The Minimum Markup Law, created in the ’30s to prevent large conglomerates from driving out small businesses, currently requires gas wholesalers and retailers to mark up their prices by at least 3 percent and 6 percent respectively, resulting in a 9.18 percent increase in prices paid by consumers.

The bill’s sponsors intend to eliminate the outdated law, saving consumers an estimated $50 million annually while still managing to protect local gas-station owners from predatory pricing.

“We think we can do away with the Minimum Markup Law and prevent large conglomerates from taking advantage [of local gas-station owners],” Zien spokesman John Hogan said.

Because most objections to the repeal of the minimum markup of fuel have centered on small businesses’ fears of large conglomerates like Wal-Mart, the bill would prohibit the sale of gasoline at or below cost.

According to Wood, the bill’s significance lies in its potential to decrease gas prices by 30 cents per gallon by the middle of summer. Currently, the state requires a mandatory 30-cent markup per gallon of fuel, but “by eliminating the markup, gas stations will compete and prices will fall,” Wood said.

“Fuel is one of the costs that just about every business faces,” Wood said.

Keeping gas prices low will help ensure Wisconsin continues to be a competitive place to do business, he added.

“I don’t believe it is the government’s role to set gas prices,” Wood said.

Zien and Wood expect to receive a considerable amount of opposition to their proposal. Zien is preparing for protests from petroleum marketers who will not want to see the minimum markup repealed. Additionally, Wood anticipates numerous special-interest groups will lobby against the bill.

“I don’t expect anyone to lobby for it,” Wood said. “Basically, this is an issue of the interest groups versus the taxpayers.”

Concurrently, lawmakers Sen. Tim Carpenter of Milwaukee and Rep. Spencer Black of Madison announced their intentions to introduce a different plan with a similar aim to save consumers money Wednesday.

“Our legislation would repeal the automatic gas-tax increase,” Black said.

The Democrats’ bill intends to halt the tax increase that occurs every April 1, eliminating the price indexing that matches fuel taxes to inflation. The proposal is scheduled to be introduced April 1.

According to the non-partisan Legislative Fiscal Bureau, the gas tax will be increased by .8 cents this April, making the total increase 10.9 cents since the automatic tax was first enacted in 1985. The tax increase is expected to cost an additional $365.8 million in 2005 and is automatically raised yearly without a vote by the Legislature.

According to Black, the automatic increase should be repealed, because taxes should not be increased without the consent of elected officials who reflect the interest of the people.

The Carpenter/Black bill is also expected to face substantial opposition, namely from fellow politicians.

Many politicians claim they are against higher taxes but allow the automatic tax increase to occur by simply blaming the automatic design of tax increases to escape accountability, Black said.

“This legislation would require [politicians] to be held accountable for their actions,” he added.

Because the two plans focus on entirely different aspects of gas pricing, there is not expected to be any competition. Both are meant to help the consumer.

“They are completely separate bills,” Black said.