Wednesday, April 16, 2008

McCain and the Gas Tax

John McCain has decided that a gas tax holiday for the summer would be just the ticket to ease gas prices and lower Americans' overall tax burden-if only temporarily:

To help people weather the downturn immediately, McCain urged Congress to institute a "gas-tax holiday" by suspending the 18.4 cent federal gas tax and 24.4 cent diesel tax from Memorial Day to Labor Day. By some estimates, the government would lose about $10 billion in revenue. He also renewed his call for the United States to stop adding to the Strategic Petroleum Reserve and thus lessen to some extent the worldwide demand for oil.


McCain's proposal is a fine idea, and his staff is apparently drafting a bill to this effect which, as we all know, is not likely to pass. People in the party opposite, as well as some Republicans and State Governors clamoring for highway money will surely oppose the legislation. McCain has to know this as well, but as both a Senator and as a candidate for the presidency, he is certainly right to raise the critical issue of gasoline tax relief at a time of serious economic downturn when Americans need both basic tax relief and relief from the high cost of fuel (since the latter leads to nearly every shipped commodity costing more money).

Knowing that his proposal will not pass, but that it is an issue that needed to be raised for the good of the American people, we now must ask a fair question: The price of fuel is not likely to drop significantly between now and next January, so can we trust that a President McCain will move to relieve Americans of the federal gas tax until the dollar and the economy stabilize?

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5 Comments:

At Wednesday, April 16, 2008 8:37:00 AM, Anonymous Adam Graham said...

No, we can't. I think a Summer Gas Holiday is a nice temporary measure particularly in times of surplus to alleviate the burden on the American people. Given the likelihood of a Democratic Congress greeting Senator McCain, if he were elected, I would consider this doubtful.

The biggest thing that could be done is to open up ANWR to drilling, as well as offshore driling, thus increasing domestic supply. Unfortunately, all 3 candidates are against this.

 
At Wednesday, April 16, 2008 10:57:00 AM, Blogger pdelger said...

Hey, Smoke. Sorry you don't blog from whereistand anymore. I enjoyed commenting on your blogs there.

Tall Paul

 
At Wednesday, April 16, 2008 11:51:00 AM, Anonymous Anonymous said...

David,
This was actually proposed once before and laughed out of existence then. I forget exactly who proposed it, I want to say Dole but I'm probably wrong. Regardless, it's total idiocy. It's effect to the consumer would be limited, it unintended consequences to the larger economy would be devastating (that's killed it before when it was first brought up) and I see it going no where very quickly. This is just a big example of McCain playing Grandpa Simpson on the economy and smart people who should no better being swept along with a stupid bromide.

SteveMule

SteveMule

 
At Wednesday, April 16, 2008 11:58:00 AM, Anonymous Anonymous said...

The federal gasoline tax represents a flat fee of 18.4 cents a gallon nationwide. With gasoline currently averaging $3.39 a gallon, the tax represents a mere 5 percent of today’s pump price. While that’s not trivial, consider that gasoline prices have more than doubled since 2004.

The problem is that lowering gasoline prices at the pump would encourage more consumption. So in the long run, it would push prices up.

For that matter, federal gas taxes go towards rebuilding and maintaining roads and highways. Cutting the gas tax would mean less investment in infrastructure — a very dangerous approach right now — and fewer jobs.

So, the provocative centerpiece of McCain’s big, new tax idea stimulates gas consumption, raises the price of fuel, undermines his own environmental agenda, weakens U.S. infrastructure, and would cost thousands of jobs.

McCain recently acknowledged, “The issue of economics is not something I’ve understood as well as I should.”

 
At Wednesday, April 16, 2008 4:34:00 PM, Blogger Dave Oatney said...

Paul;
Note: I do! My WIS work now links here.

 

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