Clinton-McCain gas tax holiday slammed as bad idea
By Alister Bull
WASHINGTON (Reuters) - A gas tax holiday proposed by U.S. presidential hopefuls John McCain and Hillary Clinton is viewed as a bad idea by many economists and has drawn unexpected support for Clinton rival Barack Obama, who also is opposed.
"Score one for Obama," wrote Greg Mankiw, a former chairman of President George W. Bush's Council of Economic Advisers. "In light of the side effects associated with driving ... gasoline taxes should be higher than they are, not lower."
Republican McCain and Democrat Clinton, who is battling Obama for their party's nomination, both want to suspend the 18.4-cents-per-gallon federal gas tax during the peak summer driving months to ease the pain of soaring gas prices. The tax is used to fund the Highway Trust Fund that builds and maintains roads and bridges.
Economists said that since refineries cannot increase their supply of gasoline in the space of a few summer months, lower prices will just boost demand and the benefits will flow to oil companies, not consumers.
"You are just going to push up the price of gas by almost the size of the tax cut," said Eric Toder, a senior fellow at the Urban-Brookings Tax Policy Center in Washington.
Obama criticized the plan as pure politics and said the only way to lower the price of gas is to use less oil.
Oh, and did Billary or McCain/McBush mention that if you cut the gas tax you virtually wipe out the federal resource for road and bridge maintenance and construction. Do they have an alternative plan for funding our nation's crumbling bridges and highways?
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4 comments:
mayhap this kinda panderin will make it easier fer the dimcrats to settle on sumbidy. i wuz verr disspointed whenever hillary fell fer thisn.
fegive me fer sayin it, but we shoulda dun whut john anderson advocated in the runup to 1980 -- razin the tax on gas to lower cunsumpshun!
Ahhh, John Anderson. . . I remember he held a "meet and greet" in the lobby of the Charleston Civic Center. I asked him what he was going to do about the horrible price of oil that was then going over $20/brl (at the time I was involved in the hydrocarbon business). He replied, raise the tax. I thought he was nutzoid.
i wuz livin in west germany whenever we wuz a'runnin. his idees looked grate frum thar on a counta the price of gas wuz 4 times higher. corse all i could do wuz read whutever he wuz a'sayin. whenever i gut home n herd im, i had purty much the same bleef, only i do bleeve that ifn we are a'gone tax, we should doot to discurage thangs that aint heppin us (lack relyin on oil too much).
Good post, sagacious: When people say Hillary Clinton will do anything, I they're definitely including pandering to the public. Hats off to Barack Obama for not doing this. One more reason to give him my vote. Blessings.
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