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May 6, 2008 9:52 pm US/Mountain
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Gas Tax Holiday Plan Gets A Reality Check
DENVER (CBS4) ―
Summer's coming and the people who want to be president of the United States have gone crazy from the heat. The substantive debate over the issues of the day has been preempted by a campaign sidebar so inane that I can't even believe we're talking about it. A gas tax holiday?
Republican Sen. John McCain: "Why don't we give American men and women a little break for the summer, just a little break."
In fact, both McCain and Democratic Sen. Hillary Clinton want to give Americans a tax break this summer by temporarily suspending the 18.4 cents a gallon excise tax we pay at the pump every time we fill up.
McCain was the first to come out with it this election cycle, but Clinton added her own twist: she wants to pay for it by taxing the windfall profits of oil companies.
Give Americans a break and stick it to big oil. It's the kind of politics that plays well when gas prices are approaching $4 per gallon.
Clinton: "If you look at the record profits of oil companies, they can sure afford to pay the gas tax for you."
Here's the spin: Most economists say the gas tax holiday is a really bad idea. It would only save the average American about $28 dollars over the entire summer. Most of the benefit would be reaped by the oil companies, because demand for gas would rise and so would the prices.
But it's not the whole story. Suspending the gas tax would siphon billions of dollars out of the federal Highway Trust Fund, and could put thousands of jobs in jeopardy. Right now the only presidential contender willing to point that out is Democrat Sen. Barack Obama.
"This gas tax which was proposed by John McCain and quickly adopted by Sen. Clinton is a classic Washington gimmick," he said.
The claim is true, and to his credit, he'll likely take a political hit for saying it. Bottom line, a summer break from the federal gas tax may be good politics, but its bad public policy.
Source Material
-- nytimes.com: Democrats Battle Over Gas Tax and Iran as Primaries Loom
-- blog.wired.com: McCain's Gas Tax Holiday: Smart Politics, Stupid Policy.
-- npr.org: Analyzing the McCain Gas-Tax Holiday Plan
-- foxnews.com: Obama Takes Heat for Opposing Gas Tax Holiday
-- cbsnews.com: Obama Dismisses Gas Tax Holiday
-- iht.com: 'Gas-tax holiday' a test for flagging Obama campaign
-- politico.com: Policy as character
-- startribune.com Editorial: Put the brakes on U.S. gas tax holiday ... Suspending it for the summer doesn't make economic sense
-- latimes.com: Critics denounce gas tax 'holiday' backed by Clinton and McCain
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