McCain's Gas Policy

[jdobbin]

http://thecaucus.blogs.nytimes.com/2008/04...s-gas-tax-plan/

On the face of it, John McCain’s proposal to offer a gasoline tax “holiday” during the summer driving season might sound like a good way to cut gas prices at the busiest time of the year.

But economists and energy analysts say it would have little impact on mitigating the rise in gasoline prices. In fact, it could lead to the opposite result.

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.

The timing of the proposal matters. Senator McCain called on Congress to suspend the gas tax from Memorial Day until Labor Day. That’s typically the period of highest gasoline use in the country as Americans drive to their holiday destinations.

“You don’t want to stimulate consumption,” said Lawrence Goldstein, an economist at the Energy Policy Research Foundation. “The signal you want to send is the opposite one. Politicians should say that conservation is where people’s mindset ought to be.”

Seems to me that it will barely make a difference when it is believed that gas prices will shoot up even more than that than the 18 cents the Feds take off the price.

McCain policy is to cut the tax only to raise it again?

[bush_cheney2004]

...McCain policy is to cut the tax only to raise it again?

It is a political gesture more than anything else, especially for beleagured truckers. McCain's plan would be much better in Canada, where the consumer really gets hosed by motor vehicle fuel taxes.

[WCN]

This is very bad policy in my mind in that people will just get short term gain rather than adjusting their consumption. But I'm surprised McCain would even consider such a policy, hopefully this isn't an indication of his economic policy because so far he has shown no leadership or even solutions to America's financial problems.

[jdobbin]

This is very bad policy in my mind in that people will just get short term gain rather than adjusting their consumption. But I'm surprised McCain would even consider such a policy, hopefully this isn't an indication of his economic policy because so far he has shown no leadership or even solutions to America's financial problems.

It is a stupid policy that doesn't help anyone in the long run. And it won't make much a difference in prices when oil continues to rise fast.

[WCN]

It is a stupid policy that doesn't help anyone in the long run. And it won't make much a difference in prices when oil continues to rise fast.

Hopefully American's look through this short sighted policy and take a good hard look at their consumption. The next president though does have a large problem on this front because their will be people probably demanding the government regulate or subsidize the price of gas.

Edited April 17, 2008 by WCN

[oreodontist]

Hopefully American's look through this short sighted policy and take a good hard look at their consumption. The next president though does have a large problem on this front because their will be people probably demanding the government regulate or subsidize the price of gas.

so true.

The problem with the tax rebate coming out and this call for reduced gas taxes (probably won't happen) is they do nothing to address the fundamental variables dragging down the U.S. economy. With no more room for reduced interest rates, the chamber of the pistol is empty.

The USa can't be reducing tax while waging a war...the war is financed with borrowed money but, even more critically, financed with borrowed 'foreign' dollars. Stimulating the economy is a viscious cycle which leads to even more consumption of foreign goods.

[Topaz]

so true.

The problem with the tax rebate coming out and this call for reduced gas taxes (probably won't happen) is they do nothing to address the fundamental variables dragging down the U.S. economy. With no more room for reduced interest rates, the chamber of the pistol is empty.

The USa can't be reducing tax while waging a war...the war is financed with borrowed money but, even more critically, financed with borrowed 'foreign' dollars. Stimulating the economy is a viscious cycle which leads to even more consumption of foreign goods.

Something more interesting is the fact that the lawmakers in DC also benefit from the high gas prices and the war through their investments so why would they want to end a war and lower gas prices when they are getting rich from it ??????

[truthwins]

McCain (McRaZy) was right, he's retarded when it comes to economics.