Amidst all the hullabaloo over Barack Obama’s whack job pastor and Hillary Clinton’s bitter-ender strategy, the public is missing an actual policy matter — one that is a good illustration of how the three candidates might behave as president.
Clinton and John McCain are touting a temporary suspension of the federal gas tax, which runs 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel fuel. Sounds great, right? A little relief from rising prices at the pump would be wonderful, especially for those of us who drive a gas hog pickup truck.
Except that it’s not so great — and both McCain and Clinton know it. No honest economist will tell you they think this is a good idea. The savings for the typical driver are around $30 per gallon, yet it would cost millions in aggregate. These are funds that are used for highway infrastructure, which needs an infusion of cash, not a reduction.
And it is estimated that the tax holiday would cost up to 300,000 highway construction jobs. For Hillary Clinton to tout jobs on one hand while proposing a tax holiday that will eliminate them is... embarrassing.
Actually, the whole thing is embarrassing. Both Clinton and McCain know this is nothing but pandering, trying to show that they feel our pain at the pump.
It’s bad policy. Politicians offer feel-good band-aid solutions that actually make things worse. Leaders eschew cheap political points and cleave to good policy decisions. Score one for Obama.
Jim Cornelius, Editor
Thursday, May 8, 2008
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I think one thing that many people are leaving out of the discussion is that there is no guarantee that the price would go down at all for the consumer if the tax was dropped. Simple supply and demand - there is limited supply, and high demand. The price will rise to what the market will bear and at this point in time that price is close to $4.00/gallon. The oil companies are showing billions in profits every quarter. The "gas tax holiday" would simply increase their profits in the 3rd quarter while the consumer paid just as much at the pump and the federal government went further in debt.
ReplyDeleteJason Wells