Ever think to yourself that this election could use more pandering and empty promises? Well, you’re in luck! Welcome to the gas tax debate, in which Sens. Hillary Clinton and John McCain try to nab votes by promising a “summer gas tax holiday,” where the federal gas tax will be repealed for three whole months. Neither candidate has addressed the simple fact that if the 18-cent-a-gallon tax is eliminated, increased demand will instantly make up the difference and keep gas prices as they are.
McCain’s gas tax plan is predictably stupid. That’s no surprise, since McCain has, after all, publicly stated, “Economics is an issue that I haven’t understood as well I should.” It’s almost as if he thought we didn’t believe him, so he’s unveiled brainless policy proposals just to prove he indeed really doesn’t understand economics. Never mind that the gas tax revenue goes to fund critical repairs on highways and bridges. Remember the bridge that collapsed in Minneapolis last year? That’s basically what McCain is proposing. But, hey, who needs bridges when you are getting gas for … the same price as you pay now? Thanks, Johnny!
Clinton’s proposal is like McCain’s plan, except she wants to replace the lost revenue by imposing a windfall tax on the oil companies. Unfortunately for those financially struggling drivers, Clinton’s plan also won’t really lower gas prices. In fact, when Clinton was asked to name one economist who thinks cutting the tax will reduce the cost of gasoline, Clinton replied she won’t “put her lot in with economists.” Apparently, she doesn’t put her lot in with common sense either or believe in the laws of supply and demand.
Of course, this gas tax holiday nonsense is just that. While McCain might not be bright enough to understand the issue, Clinton surely does. She’s engaging in a cynical pander, hoping voters are too dumb to catch on. Luckily, according to a CBS poll, a plurality of voters think dumping the gas tax is a bad call. But Clinton probably doesn’t throw her lot in with them either.
windfall profitsThe real genius behind Clinton’s plan that is not in McCain’s is the windfall profit tax of 50%. That tax will do two things: First, it will prevent oil companies from raising prices further, because increasing revenue would actually lead to loss of revenue through taxes. IT seems her call for a suspention of the gas tax is really a way to sneak in the windfall profit tax, something we used throughout the seventies and was suspended by Reagan. However, as Obama pointed out, Clinton has already called for the windfall tax to pay for something else: Alternative energy… Read more »