Daily Reveille LSU
Two of the candidates running for president are hoping they can purchase support from the American public through a shortsighted policy to suspend gas taxes.
For students, where gasoline prices can put a dent in beer money, saving at the pump is particularly attractive.
In today’s fast food media, however, where issues are tossed around in bite-sized chunks on cable news, it is rare that any discussion of substance is allowed to take place. Candidates running for president recognize this phenomenon, which is why some have jumped on the hot-button issue of high gas prices.
Sen. John McCain proposed dropping the 18.4 cent federal gasoline tax on unleaded and the 24.4 cent tax on diesel from Memorial Day through Labor Day.
“The effect will be an immediate economic stimulus – taking a few dollars off the price of a tank of gas every time a family, a farmer or trucker stops to fill up,” McCain said at a rally in Arlington, Va.
McCain also wants to stop the government’s contribution to the Strategic Petroleum Reserve, which he argues will further lower prices.
Sen. Barack Obama touts the most liberal savings estimate of such a policy, citing a congressional report that consumers will save an average of $30, or half a tank of gasoline, as a result of the tax “holiday.”
But unlike both his Democratic counterpart Sen. Hillary Clinton and his conservative opponent McCain, Obama has refused to sign on to McCain’s proposal – a move which puts him in danger of being, well, elitist. Clinton, who stepped in line with the proposal on Monday, spared no time in jumping on Obama’s clear hatred of the working class.
“My opponent, Senator Obama, opposes giving consumers a break from the gas tax,” Clinton said in a rally on Monday. “I understand the American people need some relief.”
However, most economists agree she does not. Repealing the tax is a bad idea and does nothing to address the long-term energy crisis this country faces.
“Score one for Obama,” wrote Greg Mankiw, former economic adviser to President Bush. “In light of the side effects associated with driving … gasoline taxes should be higher than they are, not lower.”
Economists cite several reasons why temporarily suspending the gas tax is bad policy.
First, the maintenance of the nation’s roads and bridges are directly funded by the gasoline tax through the National Highway Trust. Cutting funds here would clearly be imprudent given the nation’s deteriorating infrastructure.
McCain has proposed that the gap be covered with a check from the government which would be added to the over $5 trillion national deficit, according to Wired Magazine.
New York Times columnist Paul Krugman says Clinton’s plan to make up the shortfall with an excess profits tax on big oil is moving money “in one pocket, out the other. So it’s pointless, not evil.”
Second, it is not at all clear that the price of gas would even decrease by a significant amount because of the inherent nature of the gasoline market.
“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. Most economists agree.
The difference in revenue will no longer be going to help commuters in Baton Rouge avoid interstate traffic, but to foreign cartels and oil companies that just posted record profits.
Nor does the proposal do anything to address the long-term energy crisis this nation faces. Students should recognize the importance of making the switch to alternative fuels and the conservation of oil as central to our future security.
Obama has proven something to the entire electorate: His talk about changing politics has some bite. Instead of keeping the political climate status quo and not differentiating himself from the other candidates in order to play it safe, he is willing to set himself up for an easy political attack that depends on people accepting things at face value.
“We’re arguing over a gimmick that will save you half a tank of gas,” Obama said. “It’s not an idea to get you through the summer. It’s an idea to get them through an election.”
It is a gimmick. Unlike his rivals, he is willing to force America to stop looking in the short term and focus on the mounting energy crisis this nation faces. Instead of being party to bribing the American public with a quick check, he is willing to trust them with serious discussions about long-term policy.
Obama is treading into unknown territory – where truths are not self-evident and may require thinking outside of short-term benefit. This new venture might even require asking experts, rather than the crowd gassing up at the truck stop, their opinion on international supply economics and tax incidence.
Obama is ready to defy the 15-second sound bite and trust that Americans can see can spot political tricks from substantive policy.