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May 03, 2008
Gas Tax
Hillary Clinton and John McCain are pushing a gas tax holiday. This is another reason why I think Barack Obama is the better candidate.
Most economists, including Republicans, know a gas tax holiday is a bad idea.
This policy is not the way to reduce consumption to reduce demand pressure on gas supply. And there are better ways to directly provide financial relief to working families instead of a gas tax holiday.
Here is Obama's campaign video response to Clinton's proposal:
Here's Clinton's choice to pander to voters:
Today's Scrabble word is middy, a loosely fitting blouse.
Posted by dan_nt at May 3, 2008 08:19 AM
Comments
We should have quadrupled the gas tax back in the very first gas crunch in the 70s, and used the funds to rebuild and expand the US passenger rail system. With a functioning rail system, we also would have reduced or eliminated the need to invade oil-rich countries.
I believe that yesterday was the first time any of the candidates discussed expanding rail, and of course, it was Obama:
The irony is with the gas prices what they are, we should be expanding rail service ... We are going to be having a lot of conversations this summer about gas prices. And it is a perfect time to start talk about why we don't' have better rail service. We are the only advanced country in the world that doesn't have high speed rail. We just don't' have it. And it works on the Northeast corridor. They would rather go from New York to Washington by train than they would by plane. It is a lot more reliable and it is a good way for us to start reducing how much gas we are using. It is a good story to tell.
I couldn't agree more.
Posted by: Chuckles at May 3, 2008 08:16 PM
High gas taxes only hurt the poor and middle class, especially the working man, who Obama has no relation too. If I hated veteran heroes like McCain and could only vote democrat, Hillary would win some points with me by giving me a tax break on the already high gas taxes we pay. Some taxes may be reasonable but today's taxes are oppressive on the people.
I'm not against building more rail-infrastructure in areas where it would work but this is not the eastern seaboard either. Some of our major cities are more spread out here with less people to use it. I wouldn't want to spend billions on a system and then see it end up like Chico's busses with only a few passengers.
That said, I have taken the rail systems around the bay area before, I took the BART system a couple time to go see ball games when I didn't want to drive into those areas. So again, it does work in larger populated areas, I think.
Posted by: Dane Langston at May 5, 2008 10:40 AM
Dane,
You're right that public transportation is more cost-effective in areas with greater population densities.
As for the gas tax, I believe there are better ways to provide tax relief to working people than to lower or suspend the gas tax.
If policy-makers are looking to provide tax relief to working people with less unintended consequences, they should explore other options.
A gas tax holiday may provide pocket-book money back to working class drivers in the short-run or temporarily, but it may increase demand for gas.
Increase demand on limited supply may push gas prices up even higher. And some of the gas tax revenue helps pay for much needed infrastructure, like our highway system.
Clinton and McCain are basically pushing a bad economic policy idea to win votes. Providing tax relief to working families is an admirable goal, but a gas tax holiday is not the solution to help working families.
Posted by: dan_nt at May 5, 2008 10:54 AM
Dane -
High gas taxes only hurt the poor and middle class, especially the working man...
How well did low gas taxes pan out for the working people you're so concerned with? Because of underfunding mass transit since the '70s, working people who cannot now afford $4/gallon (or more) for gas now have no alternatives.
So much for free markets and the idiocy of the anti-tax brigade.
I'm not against building more rail-infrastructure in areas where it would work but this is not the eastern seaboard either. Some of our major cities are more spread out here with less people to use it.
With gas at $4/gallon, and no sign of ever getting cheaper for any length of time, how do you imagine people traveling between major cities in the west and midwest? And if you think that airlines are going to pick up the slack, just take a look at the current turmoil in that oil-dependent industry to see how well that will work.
Rail is clearly the only solution. And it's the solution that the Republicans (and moderate Republicans like Clinton) abhor.
Posted by: Chuckles at May 5, 2008 11:57 AM
The federal gas tax is 18.4 cpg.
Gas in Chico is 3.83 to 4.05 per gallon today. 18.4 cpg is about 5% of the cost of a gallon of gas.
It cost 50 bucks to fill up my gas tank the other day. Shaving 2.50 off that isn't going to make much of a difference. Especially if it's just for a short time.
Also, what makes you think gas stations are going to lower their prices by that 18.4 cpg during our gas tax holiday? People are already willing to pay the prices that they are at right now so why wouldn't the gas stations just leave it at that and pocket their 18.4 cpg bonus?
"High gas taxes only hurt the poor and middle class, especially the working man, who Obama has no relation too"
Right. And McCain and Clinton are both working class folks...
I'm working class and agree that this gas tax holiday won't mean jack in the long run. It's pandering of the worst sort.
Posted by: tasker at May 6, 2008 09:40 AM
The mainstream press is now reporting that $7/gallon may be a reality when the per barrel price hits $200 in within the next two years.
When Butte County, with a big helping of disinformation from the E-R, approved the construction of the Hwy. 149 overpasses at $120+ million, many of us wondered exactly who will be using these brand-new roads when gas prices hit $7/gallon.
Running a commuter train between Redding, Chico, Yuba City and Sacramento twice a day would cost about $2 million per year.
If the Butte County Supes and the E-R had any foresight, they would have pushed to have traffic signals and long turn lanes at the Hwy 149 interchanges, which would have allowed them to fund about 60 years of commuter rail service.
Posted by: Chuckles at May 8, 2008 10:09 AM