Clinton's gas tax folly

Submitted by Blue Neponset on Sat, 04/26/2008 - 8:32pm. Tags:

Politics

Hillary Clinton has joined John McCain in calling for a "gas tax holiday" this summer. Their plans are basically to suspend the 18.4 cent per gallon tax on gasoline this summer in the hopes that it will reduce the price of gas and therefore help the average consumer.

When I first heard McCain make this proposal I shook my head and smiled. McCain has previously admitted that he doesn't understand economics very well and I thought his ridiculous gas tax proposal was more evidence that his self-assessment was correct. I gleefully read article after article about how ridiculous this plan was.

Then a week or so later I learned that Hillary Clinton thinks McCain's gas tax shell game is a good idea. I shook my head again but there was no smile on my face this time. I couldn't believe Clinton would make the same stupid proposal that John McCain did a week earlier.

Anyone who has taken an economics class knows that reducing the price of a commodity like gasoline will increase its demand. From the links above:

Many economists and environmentalists also question the wisdom - and efficacy - of suspending or cutting gas taxes. They argue it simply leads to more gasoline consumption - which increases demand (and therefore prices) while exacerbating C02 emissions.

"You don't want to stimulate consumption," Lawrence Goldstein, an economist at the Energy Policy Research Foundation, told the New York Times. "The signal you want to send is the opposite one. Politicians should say that conservation is where people's mindset ought to be."

Instead of rolling back the tax, Goldstein says, the government ought to help low-income Americans pay for gasoline. That would be cheaper and benefit those who need it most.

So, both Clinton and McCain either don't understand basic economic theory or, more likely, believe the rest of us don't understand it. Their gas tax proposals are classic cases of pandering. They don't actually help the problem but they seem like they should.

Also, this gas tax bugaloo is nothing new. Bob Dole rolled out a similar proposal during the 1994 congressional races. President Clinton's press secretary's response to the Dole proposal was, "[i]n an election year, it is hard to separate speeches from serious proposals." That statement is still true today apparently.
--

"Please don't correct me, it sickens me. " - Mr. Furious

But she's a queen, and such are queens

that your laughter is sucked in their brains. -D. Bowie

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Fascinating (#91824)

by Model 62 on Mon, 04/28/2008 - 9:18am

McCain's gas tax holiday plan is like some of those Bush Admin panderpolicies --- the ones true blue conservatives like to point out as 1) pandering; 2) dumb economics; 3) not actually conservative policy.

McCain doesn't get full marks for following Bush's lead here (since cutting taxes -- any tax, any time, for any reason -- is always a conservative policy choice), but two out of three is still merits a platonic embrace.

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Krugman attacks McCain on gas tax holiday (#91798)

by Bill White on Mon, 04/28/2008 - 12:27am

Monday's NY Times:

The impression that Mr. McCain’s tax talk is all about pandering is reinforced by his proposal for a summer gas tax holiday — a measure that would, in fact, do little to help consumers, although it would boost oil industry profits.

Krugman is correct, of course. But whither Hillary?

Fence post turtles -- They don't get up there by themselves, some moron had to put 'em there.

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I actually like the gas tax (#91731)

by John on Sun, 04/27/2008 - 11:24am

It's user-based and it funds (supposedly) highway work.

Still I think it should be reduced or eliminated and levied at the state level...provided the Interstate system can be maintained that way. Otherwise, the tax should be just enough to cover the interstate maintenance.

I don't see a quick fix in gas prices. The damage is done. Supply has been outstripped and previous policies that have given less oil to refine and fewer refineries to refine it are only exacerbating the problem.

Then there's instability in the Middle East driving speculation...not to mention the fact that Iraqi oil production is still not up to pre-2003 levels.....what happened that year again?? ;)

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If you read Clinton's words closely (#91710)

by stillnotking on Sun, 04/27/2008 - 9:13am

she said something like "we can abolish the gas tax, provided we can make the money up from the highway trust fund".

Since there's no chance of that happening, she isn't really endorsing McCain's plan at all. Hillary is a past master at speaking on two levels at once. In any other context this would be called "lying", but in politics?

The other day I heard that ignorance and apathy are sweeping the country. I didn't know that, but I don't really care.

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Yglesias made a similar point (#91714)

by Blue Neponset on Sun, 04/27/2008 - 9:17am

LINK

In other words, Clinton doesn't agree with McCain's idea. She'll do it only "if we could make up the lost revenues from the Highway Trust Fund." But we can't make up the lost revenues from the Highway Trust Fund, so she won't do it. And that's the right answer, but she's successfully confused most of the audience into thinking she does favor the holiday. Anyone who pays enough attention to realize she doesn't favor the holiday is probably high-information enough to realize that the holiday is a bad idea.

Hillary can lie with the best of them. It is too bad some people think this is a good thing.

But she's a queen, and such are queens
that your laughter is sucked in their brains. -D. Bowie

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The statement is true as it stands. (#91812)

by Punditus Maximus on Mon, 04/28/2008 - 6:03am

It's not Senator Clinton's fault our news media is excruciatingly stupid.

It's impossible to debate if people simply hold beliefs that have no grounding in reality.

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It is deliberately misleading. (#91820)

by M Aurelius on Mon, 04/28/2008 - 7:46am

But in a bad way.

So let's save a word and a couple of syllables and call a spade a spade, shall we?

Of course not!

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If our news media were even vaguely competent, (#91834)

by Punditus Maximus on Mon, 04/28/2008 - 1:21pm

it wouldn't be misleading.

Don't get me wrong -- I agree with you. It's just that the little garden path is so very transparent that I have tremendous difficulty with actually caring.

It's impossible to debate if people simply hold beliefs that have no grounding in reality.

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And therefore... (#91786)

by M Aurelius on Sun, 04/27/2008 - 9:58pm

...high-information enough to understand that she is a liar.

Of course not!

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