The Logic and the Costs Behind Clinton's Gas Tax Proposal
I have heard from Clinton campaign insiders that Hillary Clinton's gas tax rollback proposal is resonating with voters -- particularly the economically besieged in Indiana and North Carolina. She's offering a classic give away to lure voters -- and this is part of the retail politicking that the Clinton campaign is using to dismantle Obama's sizzle.
But my former boss Senator Jeff Bingaman (D-NM), who chairs the Senate Energy Committee, endorsed Barack Obama last week -- and I think that Hillary's gas tax proposal was part of what put him over the edge. My hunch, knowing Bingaman and his views about nuclear language recklessness, is that Hillary Clinton's comments about "obliterating Iran" also cost her his superdelegate vote.
An effort is now underway among serious policy intellectuals from both sides of the political aisle to protest the Clinton gas tax rollback notion.
Brookings Institution's legendary economic policy guru Henry J. "Hank" Aaron is leading the effort -- and has issued an open statement signed by some of the nation's leading public policy voices. It's a completely non-partisan effort.
The statement reads:
An Open Statement Opposing Proposals for a Gas Tax HolidayIn recent weeks, there have been proposals in Congress and by some presidential candidates to suspend the gas tax for the summer. As economists who study issues of energy policy, taxation, public finance, and budgeting, we write to indicate our opposition to this policy. Put simply, suspending the federal tax on gasoline this summer is a bad idea and we oppose it.
There are several reasons for this opposition. First, research shows that waiving the gas tax would generate major profits for oil companies rather than significantly lowering prices for consumers.
Second, it would encourage people to keep buying costly imported oil and do nothing to encourage conservation.
Third, a tax holiday would provide very little relief to families feeling squeezed.
Fourth, the gas tax suspension would threaten to increase the already record deficit in the coming year and reduce the amount of money going into the highway trust fund that maintains our infrastructure.
Signers of this letter are both Democrats and Republicans. This is not a partisan issue. It is a matter of good public policy.
But I have to post a line from Aaron that gets at what he really thinks of Hillary Clinton's proposal:
My own view is that in the long and sad annals of truly bad ideas, it is unusual for one to receive bipartisan support at such high levels right in the middle of a campaign as this one has.
-- Steve Clemons
Comments (77)
Steve, why no mention of the windfall profits tax Clinton wants to institute to pay for the "holiday?"
It seems to me that during every war in our history, there has been a tax on excess profits, (which the oil companies are indeed enjoying).
The purpose of that tax is to avoid war profiteering, and to avoid the perception of poor bodies being sent to die for rich chickenhawks.
I think it's merely a transference of wealth from the oil companies back to the people they've bilked.
In fact, I think an excess profit tax of most of the corporations enjoying unprecedented growth due to the war is in order.
I don't like that "economists" are pissing down my back and telling me it's raining.
May 4, 2008 11:50 AM | Reply | Permalink
People shouldn't ignore the windfall tax she's proposing.
Unfortunately, it would work against itself. Look at it this way:
Cut the gas tax, hoping to lower the price of gas by 18 cents a gallon.
Tax the oil companies extra.
The oil companies, wanting to preserve their outsized profits and pay the windfall tax in a pain free way will respond by -- jacking up the price of the oil they sell to refiners in order to make up the difference. Or, if they're super majors with their own refiners and service stations they can just not cut prices in the first place.
The windfall profit tax could actually raise the price of gasoline.
May 4, 2008 7:05 PM | Reply | Permalink
Imposing a windfall profit tax on the oil companies would not necessarily be passed along to the consumer. But even if it did, those are two separate issues. One is not tied to the other. The main point for the average Joe is to be able to go to work in his vehicle and for the independent trucker for him/her to be able to compete with the fleets. Even if the windfall profit tax does not get passed, the tax holiday for the consumer is a good idea.
Ah but it will take away from the infrastructure fund.
Well get it somewhere else. Get it from the latte drinking set sitting on their fat assess pining for Obama
May 4, 2008 9:34 PM | Reply | Permalink
"Get it from the latte drinking set sitting on their fat assess pining for Obama"
Fuck you, asshole. It's fat, lazy old lardass Hillary supporters like yourself that are the problem with this country. You're uneducated, you spend your lives drinking cheap alcohol, smoking and stuffing your faces with greasy food, and then want someone like me, who's 46 and in excellent shape, as well as smart enough to get a college degree and work in a career with a future, to pick up the tab for your diabetes and heart problems.
May 5, 2008 2:28 PM | Reply | Permalink
Because:
A. It will never get through Congress.
B. If it does, the oil-beholden President will Veto it, and
C. There are not enough votes to override any Veto.
It's posturing pure and simple. Besides, HRC had already earmarked funds to any such proposal to an alternative energy program. She's spending the same dollars twice in this case.
What's she's doing is worse than bad policy; it's cynical to the extreme.
May 5, 2008 6:14 AM | Reply | Permalink
That sounds like right-wing fear mongering.
It could raise prices? Well, I think it's time to make the oil companies give back some of their war profiteering dollars. If it doesn't go to consumers, fine. It can be applied to the war debt.
Or better yet, Veteran care.
May 5, 2008 8:08 AM | Reply | Permalink
A huge problem with Clinton's windfall profits tax suggestion is that there's not a chance in hell that Bush would sign such a thing into law. At "most," the Clinton-McCain gas tax holiday would make it through, but the windfall profit tax would not.
May 4, 2008 12:06 PM | Reply | Permalink
I think it might, if enough pressure was brought to bear.
History is on OUR side.
May 4, 2008 12:13 PM | Reply | Permalink
Hillary previously promised to use the same windfall taxes to develop clean renewable energy sources and technology. Now she is spending that same revenue stream on the highway fund.
Hillary has now officially embrace Fuzzy Math, which allows her to spend each Windfall tax dollar twice.
May 4, 2008 3:31 PM | Reply | Permalink
What is resonating is her breadth of experience and pristine judgement.
Take a look at Obama's Republican plan for social security reform. Paul Krugman is seriously concerned.
Progressive economists prefer Clinton's economic recovery plan, and her health plan. Obama's are considered weak and right wing.
She only meant the gas tax relief as a temporary quick relief, and has carefully mapped out her long-term plan.
It is unfortunate that the haters can't look under the hood, but instead choose to fuss over and fixate on something only meant to be temporary.
May 4, 2008 12:23 PM | Reply | Permalink
The better for Democrats in the fall
May 4, 2008 10:01 PM | Reply | Permalink
Quote: "I think it might, if enough pressure was brought to bear."
Oh come on. The most likely outcome (assuming that some form of the Clinton-McCain bill made it to Bush's desk, which is a big "if") is that the windfall profits tax would die in committee and all we'd get is the gas tax holiday.
Obama's proposal of increased economic stimulus would go straight to the heart of the problem without being a two-parter that could get separated along the way.
BTW, Obama supports a windfall profit tax too. But, not being a panderer, he's not pretending it could be got through while Bush is still in office. And he's certainly not pretending it could be used to offset a pointless, ineffective gas tax holiday.
May 4, 2008 12:20 PM | Reply | Permalink
Well, it seems to me Clinton is willing to take on the oil and gas industry, along with it's myriad apologists.
That's a good thing.
As for their respective economic recovery plans, Hillary's is a bit more to the left, and I prefer that.
Neither of them go far enough. Edwards plan was the best.
Personally, the plan I like best is a New Deal type program where every state gets a billion dedicated to improving infrastructure.
That would put people, especially blue collar construction people hard hit by housing, back to work immediately.
That one didn't make it out of committee when the Republicans were controlling the house.
They aren't anymore.
Bush is a lame duck. Stop being ascared of him.
May 4, 2008 12:37 PM | Reply | Permalink
The gas tax holiday is also directly counter to efforts by Democrats in states like Minnesota to adequately fund our instrasture by increasing the gas tax.
This issue is much broader than the gas tax. She's once again endorsing Republican ideas while playing the people for fools on the windfall profits tax.
She is EXACTLY like my Republican governor, Tim Pawlently. She panders to the uninformed and lets the right steal their lunch when they aren't looking. She's taking jobs away from construction workers and putting the money in Dick Cheney's pocket.
On issue after issue when Democrats should be taking the opportunity to have an intelligent discussion with the American people on taking a sharply different direction on domestic and foreign policy, she takes the easy way out. This is the problem that has plagued us from the national party for years. We won the election in 2006 only to have them cave on every issue in Congress.
May 4, 2008 12:27 PM | Reply | Permalink
IMHO, if Obama is smart, he will make this really insulting "Gas Tax Holiday" his break from Clinton/Republican politics. Sorry for the long post to follow but ethically and rhetorically, it stands to be a watershed moment.
This Gas Tax Holiday nonsense is a Republican con job. A holiday? John McCain and the Bush administration are trying to make it sound like we ought to have a big party to celebrate the fact that they're going to drop the price of gas from $3.75 a gallon to $3.65 a gallon, and work things around to put the same or even more money in the pockets of big oil while taking it out of our money for roads and bridges. Anybody remember what gas cost when they got into office?
Boy, do we need a different kind of politics.
And Senator Clinton is right in there with them--proposing a minor variation on the same thing.
It's the Iraq war vote all over again--a lie to the American people and Senator Clinton supporting the War while splitting hairs over what it meant. It was a vote against the interests of Democrats and ordinary Americans then, and this "Gas Tax Holiday" is a vote against our interests today.
The Republicans and Senator Clinton think we are all actually dumb enough to fall for this--that we'll knock back a couple of shots, slaughter some hawgs and get ready for a hoe-down to celebrate our GAS TAX HOLIDAY!
Well Indiana and North Carolina, I have a different idea. Let's tell the Republicans and Senator Clinton what we think of their politics. Instead of a gas tax holiday, let's turn this into a BOSTON TEA PARTY. Except instead of dumping tea in the harbor, let's dump Senator Clinton and the Republicans! Instead of a dinky gas tax holiday, let's give them a permanent holiday!
Or something like that. The point is that you don't have to be a latte-sipping elitist to see that the "Gas Tax Holiday" is like a mugger giving you back a quarter for the bus and suggesting that you choose the same alley tomorrow.
May 4, 2008 12:29 PM | Reply | Permalink
Well said.
May 4, 2008 10:26 PM | Reply | Permalink
Oil companies do one thing extremely well. They generate profits, and those profits go up almost every year. If a tax is imposed on their "excess profits", they will simply increase the price of their products to compensate. But, the extra effort that would entail would mean they would raise the prices even more to compensate. Or, if the taxes were reduced, that would require more bookkeeping efforts, so they would raise their prices more to compensate for that. So, if we just boycott their products, that will cause the prices to be increased to compensate.
If I'm not mistaken, there is a pattern hidden in there.
May 4, 2008 12:31 PM | Reply | Permalink
The windfall profit tax should be imposed on Goldman, Sachs and all the other major commodity trading firms who have pushed the price of oil at least $30 per barrel higher than it should be if normal, supply-demand, price elasticity laws were in effect. But they're not, because of high speculation, a brinksmanship foreign policy rhetoric that constantly raises doubts on the stability of supply, and excessively low margin requirements on commodity trading.
Yesterday, while driving, I listened to CNN on my XM satellite radio. They had live coverage of a Clinton rally in North Carolina where Hillary was speaking about the suspension of the gas tax. She was energized and the crowd was energized. Then, CNN switched to an Obama rally in Indiana where he was speaking about why he thought it was a foolish idea, etc. He was stumbling and fumphing and he was just not getting through. The audience was sagging noticeably. In fact, nobody really cared why it was a bad plan blah blah blah.
Pure politics. You betcha and Hillary knows what she's doing and he doesn't.
Bye now.
May 4, 2008 12:37 PM | Reply | Permalink
Yep, pure politics.
And the US, an uneducated bunch, falls for it every time. Listen to the rhetoric on this thread alone. "Mean old oil companies" -- yeah, if only we get rid of them, the world will be perfect!
Nothing about reduced consumption. Nothing about unsustainable lifestyle. Nothing about dwindling reserves.
Just keep feeding the people crap -- which they happily gobble -- until they get obese, sick and die.
May 4, 2008 1:02 PM | Reply | Permalink
Mmmm that's some good cake they're letting us eat.
May 4, 2008 10:28 PM | Reply | Permalink
I takes a hundred bucks to fill up my truck. So I'd save a few dollars with the cut. But not enough for me to take away even one job from from a man or woman working the roads, one of the few jobs left out my way.
May 4, 2008 1:28 PM | Reply | Permalink
By my calcs, I'd say that a "holiday" would save us about five dollars a week for our normal driving and about seventeen off of our vacation, which I mention in another comment. Neither is really enough to make a big difference to me personally, if a "holiday" were to pass and if the "savings" were passed along, but the battle against the perception just strikes me as an unnecessary fight.
May 4, 2008 4:27 PM | Reply | Permalink
In my earlier post, I neglected to mention another reason for the higher cost of oil. It has been reported by reliable sources -which I haven't checked out but certainly Steve Clemons would be in a position to know - that the government has been actively adding to the Strategic Petroleum Reserve at current prices and additionally is seeking to expand the capacity of the SPR and add even more oil in preparation for expanded war in the mid-east. So, with word of that market development in the marketplace as well as another active bidder, oil is sustained at current levels.
May 4, 2008 1:33 PM | Reply | Permalink
No doubt.
It's a form of wealth redistribution.
I'm all for getting some of it back to those it was taken from. They need it. Bush and his cronies, don't.
May 4, 2008 2:13 PM | Reply | Permalink
George Bush ran ads against John Kerry focusing on a time, Kerry said we should consider raising the gas tax and in "counting" eleven votes to increase the gas tax, nine were about the same 4.3¢ increase and one was a vote against a six month holiday.
The gas tax has been a political football for ages and though everybody always come out and says it's a bad idea, the perceptions are hard to control. In fact, though I oppose the holiday, I personally have had fleeting thoughts about how much one would save me as I plan out my summer vacation.
We really don't have a lot of choice, when it comes to how my family is going to get from central NM to visit Yellowstone this summer. Not only would it be difficult and expensive for us to fly to someplace near the National Park, it'd be very hard for us to actually visit the park without a reliable means of personal transportation.
It may be wrongheaded public policy to implement a gas tax holiday and I don't really see one as likely, but even this lifelong Democrat has had to consider the potential savings and because Obama is going to be vulnerable on other tax issues in the fall, I really don't see the wisdom in staying dead-fast on an issue which has been a loser for Dems in the past and which most likely would never take effect, anyway.
May 4, 2008 1:46 PM | Reply | Permalink
Sorry, but you are gullible. I travel interstate to visit my elderly mother about once a month. The gas prices are manipulated daily. They are manipulated geographically. The companies know where they can get away with charging an extra 5 or 10 cents a gallon and they do it all the time. They game whether the price should be lower on Tuesday than Sunday. They are going to charge you every last cent they can get away with gas tax or not. The only thing Hillary changes is that they now get all the money and none goes to bridge or road repair. The only long term political impact is that Hillary undermines any argument Democrats made for taxing for the common good. It's all about you and your vacation. If the bridge under some other family collapses, too bad.
May 4, 2008 3:18 PM | Reply | Permalink
When I was in college more than a quarter-century ago, I managed a convenient store for a while and one of the third shift's duties was to look out the window to note the competitor's prices and to call it into the gas company, so that they could set a new price. I'm sure in the age of Walmart, there's probably some additional science behind current gas prices, but these types of artificial factors have always been involved and if anything, I'd say that a gas tax vacation might result in a less-steep climb during the summer months. Though, I've long said that the prices will probably peak around the first of July and then start falling-off in time for the election, anyway.
I also don't think that a gas tax holiday will have any other pocketbook effect (except maybe a tempering of the normal increases) and I don't actually think it'd pass Congress because none has ever done so in the past. Still, though I don't support the concept of the holiday, I have thought about it as I've been planning our budget and I can't be alone. Of course, Obama can't back down now, but I don't know why he would've staked out a position which has cost Democrats in the past, which would also require an educational effort to overcome, especially since he's going to be hit on other tax issues in the fall and the thing would most likely never become law in the first place. To me, it's just another thing that the Republicans are going to add to their litany, as they try to define him for November.
May 4, 2008 4:09 PM | Reply | Permalink
I just see Obama's entire attack on the gas tax proposal as his attempt to change the subject from Jeremiah Wright. He didn't have a bigger issue, so he had to chose the first one that came along.
May 4, 2008 1:47 PM | Reply | Permalink
Otto is a Racist Scumbag, Aryan Nation Troll(ANT)
He claimed that he listened to Randi Rhodes on Air America this Friday. That should tell you all you need to know about that lying sewer rat.
May 4, 2008 3:34 PM | Reply | Permalink
And liam is showing himself to be the type of forum commenter who convinces grownups that the forum has changed so much that it's not of much interest to them anymore, and the type of commenter that discourages lurkers from bothering to register because they might get stalked by members like liam.
May 4, 2008 4:33 PM | Reply | Permalink
Quote: "I just see Obama's entire attack on the gas tax proposal as his attempt to change the subject from Jeremiah Wright. He didn't have a bigger issue, so he had to chose the first one that came along."
Oh? It wasn't because Hillary was doing a major pander and attempting to slam Obama for not pandering??!!
Hmmm!!
May 4, 2008 2:14 PM | Reply | Permalink
Hillary previously promised to use the same windfall taxes to develop clean renewable energy sources and technology. Now she is spending that same revenue stream on the highway fund.
Hillary has now officially embrace Fuzzy Math, which allows her to spend each Windfall tax dollar twice.
May 4, 2008 3:35 PM | Reply | Permalink
The highway fund just needs repletion for a couple of months during the tax holiday. The windfall profits tax would continue.
May 4, 2008 3:43 PM | Reply | Permalink
Which is not going to happen. She can not get a bill passe d through both houses of congress, and she sure can not get Bush to sign it. It is pure Hillary pandering Bullshit.
By the way, how come no one pays any attention to the fact that Hillary's proposal would save each struggling billionaire the same amount, as it would each struggling blue collar person.
Hillary feels all billionaires pain.
May 4, 2008 3:49 PM | Reply | Permalink
I agree that the tax break isn't targeted and that's one of the reasons it's ineffective. But, if you think there is no way to get a break for everyone on gas prices through Congress, how would another tax break only for low income ever stand a chance? the only way the economic stimulus credit got passed was because it also went to upper middle class and businesses. It does look like, for political reasons, this doesn't have legs. But hell, most things that finally do get enacted were deemed DOA at first. Clinton didn't initiate the idea but she had to choose a side on it and chose to give it a shot. Maybe she can at least get the windfall tax through Congress (when she's president).
May 4, 2008 4:31 PM | Reply | Permalink
The Republicans will vote against that bill at their own peril come November when they are up for re-election.
Iliam you sound to me like a typical Obama supporter who is so afraid to confront the Republicans (because "they will not go along" geesh!!) that you wind up paralyzed. Obama is not as extreme but he is always eager to "compromise" with the Republicans, to aim at bipartisanship, to see virtue in Ronald Reagan...
That's why the American people see the Democrats as weak. Stand up and confront the opposition. Bring it up for a vote. We control both houses. Let them veto the legislation and suffer the wrath of the electorate at election time. It seems that of the three Hillary is the one with the most balls.
May 4, 2008 11:51 PM | Reply | Permalink
The gas tax holiday is a Republican John McCain idea. John McCain first proposed it. Hillary is a "me, too, me, too" on this one. So if you like the idea so much, vote for McCain or Clinton, doesn't really matter much, they are perfectly aligned on this one, much like AUMF in Iraq. And yes, some may call thinking with your balls good national policy. (I believe W is the national poster boy for this.)
But I'm for the one who has the courage of his principles - whether on the gas tax or on invading Iraq - each issue was and is very popular in its time, but both so very wrong our country; One man had the courage to see and do what was and is right for our future. Barack Obama.
May 5, 2008 3:24 AM | Reply | Permalink
That letter doesn’t really apply to Clinton’s proposal because, as Workerbee points out, it doesn’t recognize the windfall profits tax that’s part of her plan. Yes, the tax holiday alone is ineffective and too little, too late, and it is rightly called pandering. I think Clinton made a quick and misguided political decision on the tax holiday after McCain proposed it. I think it’s a similar misstep to Obama’s health care plan that was rushed out for political reasons and tied him into a bad proposal. But Clinton proposed a return to windfall taxes to pay for this and promote alternative energy programs.
It is all pandering and politics of course. For instance, it strikes me as very political of Congress-members and officials to be fighting this so strenuously when they won’t fight this intensely for so many other issues. That Bush may veto a windfall tax bill is even more reason to pass it. CNN could show a split screen of Bush vetoing it in late summer and the new Democratic President signing it in January.
Exxon was just bitching because they only cleared $11 billion this last quarter. Meanwhile some people are going to be in dire straights because of the gas prices and related inflation on everything else. I would hope that Congress would seriously address that and pass a comprehensive green energy program that also provides relief for the working poor who are really hit by high prices.
May 4, 2008 3:39 PM | Reply | Permalink
"That Bush may veto a windfall tax bill is even more reason to pass it. "
I seem to recall making that argument over defense bills designed to unfund and end the Iraq war. I do not recall Hillary signing on to my premise. I believe the refrain at that time was that passing any bill Bush would veto would make us look bad. Some even used that argument on SCHIP.
Hillary couldn't stand up strong to end the war in Iraq or provide health care for children so I find this holiday a complete farce.
If she had been serious about even ONE major issue over the last few years, she'd probably have my vote but I can think of no issue she hasn't triangulated, framed, weaseled, parced and spun to no practical effect whatever other than to make her the candidate most likely to advance the Republican agenda.
May 4, 2008 4:33 PM | Reply | Permalink
You’re right BlueBell, but no one would stand up to end the war. I think that fight was lost before it began when Reid and others confirmed before the midterms the false idea that defunding would deprive troops of protection. Anyway, Congress tried to pass a windfall profits tax just a couple of years ago. It died in the Senate. I think Durbin sponsored it but can't find who voted for it or if it ever got to that point.
May 4, 2008 5:27 PM | Reply | Permalink
I know no one stood up to end the war. That would have required leadership. I'd think even the "low information" voters might be getting tired of being played for fools. But I guess Hillary has "fool some of the people all of the time" as her core demographic.
May 4, 2008 7:17 PM | Reply | Permalink
Hey I don't mind being "pandered" to. Rather the politicians "pander" to me than to oil companies and latte drinking elitist snobs who don't care if they pay 6 dollars a gallon gas.
It is is meant to help the little guy it is pandering if it is meant to appease the elite it is "brilliant economics".
I say Hillary has the moral high ground on this. If it saves me a penny a gallon, I don't care.
You guys don't understand blue collar America and that's why you suck up to Obama no matter what. But you will lose the election. Obama will NOT be president. Live with it
May 4, 2008 7:05 PM | Reply | Permalink
Know why Obama opposes the gas tax holiday? Because he voted for this in Illinois as a state senator because he believed that it would reduce the impact on consumers. The facts? Retailers and refiners raised their prices back to the same or higher price as with the gas tax, their profits shot up, and us consumers saw no relief. A gas tax holiday is a windfall for the champagne drinking, private jet riding, super-rich, and does NOTHING for slobs like me whose families make less than $50K per year. So unlike folks like you who believe the hype, Obama actually saw first hand that a gas tax holiday only feeds the rich, increases consumption, and raises prices. He learned from his mistake. Oh to have leaders again who learn.
And unlike you, I have never had a latte in my life, don't drink the stuff. I live in an under $50K union household, in a small old house, and we haven't be on a vacation in 9+ years. We bought a blow up pool for the yard from Target a few years ago, and that's as close to anywhere that we can afford to go anymore. You can stop speaking for the "working man" because you don't have a clue who we are or what our lives are really like. What we're bitter about is more of the endless same shit that comes out of Washington politicians that changes absolutely NOTHING for the better in our lives. Our costs continue to rise for food, gas, healthcare, insurance, our roads are full of potholes, out here, some of black top roads are too expensive to maintain and we are back to dirt & mud and ruts - great for the fire department or an ambulance if you are unlucky enough to need one.
I am willing to swallow a bitter pill if it means better health, I'm a grownup. So while it's tough on us to pay the gas tax, we know that if the money goes to our roads instead of in the pockets of the oil companies, we'll do our fair share and pay the tax.
May 5, 2008 3:47 AM | Reply | Permalink
Bingo.
Frankly, the fact that 'economists' and paid-for-pundits are lining up against it makes me think it's very likely a good idea.
I don't get this "rush" to reject and denounce. Maybe it's because we're messing with that paltry 11 billion profit?
May 4, 2008 3:54 PM | Reply | Permalink
Allow me to explain: A windfall profits tax and a gas tax holiday both affect only the oil companies. They are the ones who pay the gas tax, which they pass along in higher gas prices, and they would pay the windfall profits tax. Oil companies employ bookkeepers skilled at maximizing profits. Even a newly hired, C student with a minor in bookkeeping, would be able to maintain the same profits, if not increase them, in the face of these two measures. At best the net result would be a temporary few cents reduction in gas prices - but only after the bills were in effect, which is about when that same reduction would take place anyway.
All of us can reduce our gas expenditures by the simplest of methods - trade our gas guzzlers for gas misers. Until we do that we will pay whatever the oil companies wish to charge.
May 4, 2008 4:35 PM | Reply | Permalink
Hoppy,
Big oil would be lining up behind this if they could get the good press of "giving something back" while at the same time not really giving anything up through some creative bookkeeping. Carter enacted a windfall profits tax that was of great benefit. And see this wouldn't even be a new tax; just an extension of one that has been suspended for a while :)
May 4, 2008 4:46 PM | Reply | Permalink
Write the law so they can't do that.
Hell, claim oil is a public utility and cap their damn profits.
My point is it looks like one candidate is willing to go to bat against these fat cats and one isn't.
That's likely what a lot of people see.
May 4, 2008 5:09 PM | Reply | Permalink
Agreed, hoppy. The "blame the oil companies" is a misdirection by the pandering politicians that will only get them elected anyway. The larger issue is that the oil reserves under our control is shrinking fast.
May 4, 2008 6:39 PM | Reply | Permalink
You don't have to have one only if you have the other. If the windfall tax does not pass through congress you can still get a brak to the working man by the gas tax holiday
May 4, 2008 9:17 PM | Reply | Permalink
I C student minoring in bookkeeping would say: jack up the price of gas by 3 dollars. The demand curve is inflexible enough that we will maximize profit even at that level. So there are other considerations involved here that you are not taking into account. Oil companies are not mindless profit maximizers with no other concern but the next quarter.
Doing long-term harm to the economy is not in their best interest either. Like killing the goose that lays the golden egg. So this "prediction" that the oil companies are CERTAIN to pass along any tax on them to the consumer is far from certain.
The reason why economist and the latte set want to keep gas prices high is because they believe we are not frugal enough in our gas consumption and if you drive the price high enough eventually people will stop driving so much. Fair enough.
But at this moment, the average consumer is having a hard time getting to work or driving their truck. People are having to decide whether to fill up the tank or buy the groceries (which are also going up). But this is irrelevant to you guys because you have no interest in the little guy. That's the Obama crowd. They say the little guy is "bitter". In essence he should just "f**k off" and live with it. Hillary is showing an understanding of the crisis people face and rightly tells the economist to "F**k" off.
That's the difference and that's why Hillary is going to win
May 4, 2008 9:58 PM | Reply | Permalink
And 22 cents per gallon is going to make that difference?
This is similar to Bush's $300/tax rebate promise in 2000. Overall, it won't make a dent in anyone's personal financial situation, but it's a naked pander.
As for Hillary's hot air about elites, who is taking that seriously? Wellesley College, Yale Law School and many years in the Arkansas Governor's Mansion, the White House and tony Chappaqua... I don't think she's spent much time hobnobbing with regular Joes like us until last year. She has no credibility on that score, so the best she can do is personally attack her opponent, which poisons the well, and doesn't much help our collective cause.
You occasionally make some good points Andrew, unfortunately, you tend to close every post with invective aimed at Obama supporters. If you're not in fact an intolerant asshole, you should probably be aware it does make you sound like one.
May 5, 2008 6:34 AM | Reply | Permalink
A C student minoring in bookkeeping would say: jack up the price of gas by 3 dollars. The demand curve is inflexible enough that we will maximize profit even at that level. So there are other considerations involved here that you are not taking into account. Oil companies are not mindless profit maximizers with no other concern but the next quarter.
Doing long-term harm to the economy is not in their best interest either. Like killing the goose that lays the golden egg. So this "prediction" that the oil companies are CERTAIN to pass along any tax on them to the consumer is far from certain.
The reason why economist and the latte set want to keep gas prices high is because they believe we are not frugal enough in our gas consumption and if you drive the price high enough eventually people will stop driving so much. Fair enough.
But at this moment, the average consumer is having a hard time getting to work or driving their truck. People are having to decide whether to fill up the tank or buy the groceries (which are also going up). But this is irrelevant to you guys because you have no interest in the little guy. That's the Obama crowd. They say the little guy is "bitter". In essence he should just "f**k off" and live with it. Hillary is showing an understanding of the crisis people face and rightly tells the economist to "F**k" off.
That's the difference and that's why Hillary is going to win
May 4, 2008 10:05 PM | Reply | Permalink
Uh, the more they increase profits, the more they'll pay in tax. I haven't actually read Hillary's proposal, but I assume it's a fixed percentage of profit, so the less profit, the less tax. Taxes would be an expenditure, therefore they wouldn't be profit and if the thing is designed right, there's no way for them to zero everything out.
May 5, 2008 12:43 AM | Reply | Permalink
"Frankly, the fact that 'economists' and paid-for-pundits are lining up against it makes me think it's very likely a good idea."
And the imperative Iraq war was going to be quick and cheap...
May 4, 2008 4:39 PM | Reply | Permalink
That too.
May 4, 2008 8:35 PM | Reply | Permalink
Rich people, god bless us. We only care about economists when it's our money!
May 4, 2008 5:41 PM | Reply | Permalink
Oh, please.
I'm a Hillary supporter. I know perfectly well that the gas tax holiday is a pure election season gimmick. As I told my wife, Hillary sure isn't afraid to put on the fishnet stockings, if that is what it takes. Good for her!
For chrissakes, next do we make it improper for pols to kiss babies?
What really let the cat out of the bag was Gloria friggin' Borger talking about voters were being asked to choose between the pander and Serious Policy. But no choice is involved, because they have nothing to do with each other. Voters know they won't see that money, but they love seeing economists and editorial writers squeal.
May 4, 2008 5:43 PM | Reply | Permalink
Quote: "Oh, please.
I'm a Hillary supporter. I know perfectly well that the gas tax holiday is a pure election season gimmick. As I told my wife, Hillary sure isn't afraid to put on the fishnet stockings, if that is what it takes. Good for her!"
Then you won't mind if, after the pig puts on fishnets and lipstick, Obama supporters announce: "Hey! It's a pig!"
Politics too, right? And we can leave it to the electorate to decide which they prefer: a pig wearing fishnets and lipstick, or the truth.
Who knows? Maybe voters are in the mood for a pig! And with three balls, no less!
May 4, 2008 5:49 PM | Reply | Permalink
No one has written about the true cost of lowering the price of gas: it will increase consumption.
It wasn't until the 70s that people truly felt the squeeze and started cutting back -- because it finally hit them in their pocketbooks and wallets.
Of course, the public didn't like the message that Jimmy Carter was proposing and eagerly dismantled the only energy program the US has ever had.
When Cheney talked about "the American way of life is non-negotiable", he wasn't just talking to -- and he didn't just get applause from -- the wealthy.
How many in the middle class need their SUVs? Pickup trucks? Minivans?
When I see a Hummer on the road, I assume it's a wealthy person. As for the rest of the overgrown vehicles, it could be anyone.
Let the price float. We still are paying lower prices than anywhere else in the world.
May 4, 2008 5:53 PM | Reply | Permalink
Actually, we aren't paying lower prices than anywhere else in the world. For example, the Middle East oil producing countries pay much less, Mexican people pay less, Venezuelan people pay less. In general, those countries that produce the oil pay lower prices for gas.
I think it is far more significant that we still pay just about the same price as always in inflated dollars. Back in the late 60's I paid 30 cents a gallon, but you could buy any number of cars for under $3000. Today the cars are about ten times as costly and so is the gas. But, there was no shortage in the 60's and today there is, so logically we should be paying even more now.
May 4, 2008 7:26 PM | Reply | Permalink
. . . we still pay just about the same price . . . .
The inflation calculators I use -- Minneapolis FRB among them -- show a 1968 gallon of gasoline @ $0.379 would be $2.269 in 2007 and I doubt anyone would be upset were that today's price.
May 4, 2008 11:32 PM | Reply | Permalink
The price doesn't even need to be lowered to increase consumption, the word holiday alone will do the job.
May 4, 2008 7:51 PM | Reply | Permalink
What a crappy way to try to say something. “Dismantling a sizzle” WTF is that?
Tax holiday will mean cheaper gas at the pump. No, the gas companies will not gobble up the tax cut by increasing their price anymore that they are not going to increase their price without the tax holiday. Gas prices are determined by the price of a barrel of oil, not by how much tax is on the gas at the pump you morons.
So go drink your latte at Starbucks and cry your bitter tears because Obama will NOT be your president. The tide is turning.
May 4, 2008 7:25 PM | Reply | Permalink
How would you like to own your very own bridge? I happen to be the exclusive seller of a really fine one, one that I'm sure you will want to own.
May 4, 2008 7:29 PM | Reply | Permalink
The gas tax hoppy is a tax the government charges the consumer of the gas not the oil company. Get it? If there is a tax holiday the oil companies do not lose a penny in profit. Get it? So for them to jack up the price by 18 cents a gallon cause the government is not taking that 19 cents from the consumer in tax is a crazy idea. But you are such a genius that you can't figure that simple piece reasoning out. That's what you get from drinking too much of that latte and hanging around with airheads
May 4, 2008 8:53 PM | Reply | Permalink
drinking too much of that latte
Umm, have you taken a good look at Hoppy's pic? I'm pretty sure he's an *espresso guy himself...more bang for the buck, as it were.
(*I live around the corner from the Trieste, and the latte drinkers are mostly girls--definitely cuter than Hoppy-no offense, Hop...)
May 4, 2008 11:59 PM | Reply | Permalink
I'm amazed by your perceptiveness JollyRoger! I happen to have just purchased from ebay a $20 genuine Italian stove top espresso maker. And, I use it 3 times a day. What gave me away? Was it my suave Italian look?
May 5, 2008 10:43 PM | Reply | Permalink
What gave me away
Being as I have made something of a hobby of the study of adrenergics in general and central nervous system stimulants in particular, I was able to discern in your likely approach to the subject a certain seriousness of purpose that did not admit of the possibility of dilution of the mother elixir with adulterants, foams, spices, or the like.
May 6, 2008 6:58 PM | Reply | Permalink
Gas prices are determined by the price of a barrel of oil, not by how much tax is on the gas at the pump you morons.
Is that a fact?
I guess in Europe, they buy $150.00/bbl. oil.
What a bunch of suckers!
Parenthetically, herewith a modest proposal:
A $2.00/gallon gas tax, proceeds payable to the 400 wealthiest americans.
Tough luck for the middle class, but sure to get a presidential signature, and good for the planet.
May 4, 2008 7:41 PM | Reply | Permalink
Hey jollyroger
We are not talking about the fixed component that is due to tax we are talking about the variable price that you see on the ticker at the NYSE every day.
Sure government can tax gas at the pump and in Europe they do it big time. But are you telling me thyat if the Europeans had a tax holiday the oil/gas companies would imediately gobble up the difference in higher prices? Very doubtful.
May 4, 2008 8:48 PM | Reply | Permalink
If that's the case why are independent truckers unable to compete with fleets and have to park their trucks and hope for better times. Why are food prices going up like crazy? Hoppy, you have no clue as to what is happening to the working man and your "I paid 30 cents in the sixties and that’s like 4 dollars today" bullshit is not amusing at all.
May 4, 2008 8:42 PM | Reply | Permalink
Imposing a windfall profit tax on the oil companies would not necessarily be passed along to the consumer. But even if it did, those are two separate issues. One is not tied to the other. The main point for the average Joe is to be able to go to work in his vehicle and for the independent trucker for him/her to be able to compete with the fleets. Even if the windfall profit tax does not get passed, the tax holiday for the consumer is a good idea.
Ah but it will take away from the infrastructure fund.
Well get it somewhere else. Get it from the latte drinking set sitting on their fat assess pining for Obama.
May 4, 2008 9:15 PM | Reply | Permalink
for the independent trucker for him/her to be able to compete with the fleets.
Why?
If the fleet can carry freight profitably with $4.50 diesel, why do you want the government to intervene to keep the price below market?
Consider that the *"real" cost of fuel, including the cost of all the forms of government intervention directed at maintaining below market gas brings us a three trillion dollar bill for George's Excellent Iraqi Adventure.
Is your tax money, and your kids' lives, worth burning up so the lifestyle of the independent trucker on the open road can flourish?
*More like $11.00/gallon.
May 5, 2008 12:09 AM | Reply | Permalink
If anyone was serious about helping the consumer, they would propose a gas cap, and put price limits on how much can be charged for a gallon of gas.
And we're as likely to see that, as we are to see an excess profits tax on the oil companies and signed by Big Oil Bush.
May 4, 2008 10:53 PM | Reply | Permalink
amen
May 4, 2008 11:19 PM | Reply | Permalink
From "Head of State"
http://headofstate.blogspot.com/2008/05/clinton-calls-for-bad-weather-holiday.html
Monday, May 05, 2008
Clinton Calls for "Bad Weather Holiday"
"When asked this morning by ABC News' George Stephanopoulos if she could name a single economist who backs her call for a gas tax holiday this summer, HRC said "I'm not going to put my lot in with economists.”
The gas tax holiday is...so economically stupid (it would increase demand for gas and cause prices to rise, eliminating any benefit to consumers while costing the Treasury more than $9 billion, and generate more pollution) and silly (even if she won, HRC won’t be president this summer) as to be worrisome. That HRC now says she doesn’t care that what economists think is even more troubling."
-Robert Reich, May 4, 2008
I know we've got those "intellectual", high-falutin', elitist meteorologists, those "forecasters" with their complicated charts and their mumbo-jumbo, their high fronts and their low fronts, their Doppler radars. But I've come to say that we're going to put an end to all of that.
When my daddy and I went out in the morning in (Scranton, Indianapolis, Durham, Hagåtña, Charlotte Amalie, San Juan), and he said "It's going to be a sunny day today", well, that was good enough for me.
And that's why, if you vote for me on (May 6, May 13, June 3), I will put into effect a "Bad Weather Holiday" running from the years 2009-2012--and potentially extendable.
That's right. We shouldn't have to eat our (hot dogs, barbecue, tamales, Chicken Estufao, Stewed oxtail) under rainy skies. We've had enough of going off to work in the (streets, sands, seas) of this most beautiful (state, territory) only to face a cold, cloudy day. We know what it's like to rest our weary bones after a hard day of labor in the nearest (local watering hole, locale taberna, berlina) only to step out into a stiff, tiring wind.
The Weather issue is very real to me, as I've been meeting people across this nation who (walk, drive, sail, ride ox before stewing tail) to work, and would save precious sums if they did not have to spend their hard earned money on "umbrellas" and "rain coats" and other high priced, high class items of the upper crust.
But I say: Let the 'Umbrella Lobby' take the brunt--not our hard working citizens. Oh, sure. I know elite opinion and so called "academic experts" say that my plan would cause 12 straight years of hail, swarms of ravenous locusts, and a vortex of hurricanes ranging from the Mideast to the West Coast.
But I don't put stock in experts. And neither should you. And that's why you should vote for me on (May 6, May 13, June 3).
Cite:
Head of State
http://headofstate.blogspot.com/2008/05/clinton-calls-for-bad-weather-holiday.html
May 5, 2008 8:22 AM | Reply | Permalink
Are you (with us)(behind us) (like us)
or
(against us) (with them) (other)
May 6, 2008 7:36 PM | Reply | Permalink