Don't Be Fooled by the 2 Worst Candidates
So Sen. Hillary Clinton, a Democratic presidential candidate, and Sen. John McCain, the GOP-nominee in waiting, both want to cut the federal tax on gasoline as a way to help Americans this summer.
The idea doesn't sound that horrible, but when you put politics aside and listen to the economists and the people who aren't trying to be elected, you'll find a much more sensible position by Sen. Barack Obama, Clinton's adversary.
From a Reuters story on April 30:
"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."I've said this before in columns, conversations and blogs. Higher fuel prices, initially, lead to decreasing usage which cuts demand, which lowers prices. Americans already pay some of the lowest prices for gas in the developed world, and everyone wants SUVs and Hummers, so it was the consumer's decisions in the first place to put more of their money toward cars and gas.
The 18.4 cent federal gas tax goes into the Highway Trust Fund that builds and maintains roads. Cutting that takes away money sorely needed for bridge repairs. Remember the bridge collapse in Minneapolis, Minn., and the studies that came out after saying hundreds of billions of dollars is needed to improve the safety of the U.S. transportation network? Suddenly everyone has forgotten.
As Obama said:
"It would last for three months and it would save you on average half a tank of gas, $25 to $30." To take that further, we're continuing to jeopardize the lives of Americans by not dealing with the crumbling bridges, roads, etc. etc. And a personal note: No new roads, let's maintain the crumbling roads we've got.
Also from the story:
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.Of course McCain is for this as a Republican. Take more money from the consumers and give it to the oil companies who are already reporting BILLIONS of DOLLARS in profit each quarter.
Perhaps the oil companies could do something for America and absorb some of the losses. What's $4 billion or $5 billion when oil companies combined are making tens of billions of dollars in profits?
"We will pay for it by imposing a windfall profits tax on the big oil companies," [Clinton] said on Tuesday.Yeah, because boosting the taxes on the oil companies has gone anywhere in the past 5 years. So what if we go with her plan, she gets the presidency and Congress fails to raise taxes on the oil companies, like they have repeatedly already? More windfall for them, less for consumer and more dangers on the nation's crumbling highways.
Obama. The sensible choice.