The Price of Gas
Promoted by Brendan
John McCain has introduced legislation to the Senate to temporarily eliminate the federal gas tax. Hillary Clinton was quick to jump out in support of this “Gas Tax Holiday.” I thought her opinion was that Republicans don’t have any good ideas? Well, if she sees this as an example of a Republican good idea, then her judgment is even worse than I expected. But I suspect both McCain and Clinton know that this is not a good idea. It’s an idea that sounds good to the average American, though, so it scores them political points. At least Barrack Obama recognizes it as a bad idea. He should know, since it was tried on a state level in Illinois in 2000, while he was a Senator there. (He voted for it at the time, but when legislation was introduced to eliminate the tax permanently, Obama voted "no.")
So why is it a bad idea? Well, the obvious reason to me, an environmentalist, is that lowering the price of gasoline will encourage increased usage, at a time when it is critical that we be encouraging conservation and decreased usage. It seems to me that McCain and Clinton are more interested in reassuring the passengers as they accelerate the bus towards a cliff. Obama seems to get that it might be a better idea to concentrate on slowing down, and hopefully even turning away from the cliff. I’d like to ask McCain and Clinton the following question: “If you believe as you claim, that human-produced CO2 is at least partially responsible for global climate change, why on earth would you support legislation that encourages increased use of fossil fuels?”
That’s reason enough for me to discard the idea of the gas tax holiday. But the thing is, it is also a bad idea according to many economists .
"It's basic economics," said Leonard Burman, director of the Tax Policy Center, a non-partisan thinktank. "Gas is always in very short supply during the summer, which is why prices go up. In order to reduce the price, you would have to increase supply, but that is difficult over the short term, because the refineries cannot add capacity."
James Hamilton, professor of Economics at the University of California-San Diego, said that most of the benefits from a temporary tax moratorium would likely go to producers rather than consumers. He said that states that suspend gas taxes are able to respond to rising demand more efficiently than the country as a whole, because gasoline supplies can be easily moved from one state to another.
"Prices would certainly rise to the market-clearing level," said Hamilton. "I would expect the price [of gas] to go back to very close to where it was before [the tax cut], in which case consumers would not see any benefit."
Obama gets it: "We're arguing over a gimmick that would save you half a tank of gas over the course of the entire summer so that everyone in Washington can pat themselves on the back and say they did something… Well, let me tell you, this isn't an idea designed to get you through the summer, it's designed to get them through an election."
Fortunately, it seems pretty unlikely that this legislation will pass. Hooray for a Democratic-controlled Congress!
- Drive less. Duh. Okay, so you live thirty miles from work and have to drive there. Look into carpooling. What about non-work related driving? Is there any place you normally drive where you could walk or ride a bike? Take a bus? Look into it. Move closer to work, if that is an option.
- Make sure your car is as efficient as possible – old air filters, poorly inflated tires, old oil – all these will decrease mileage. Get a tune up.
- Next time you buy a car, take mileage into account. If “Zero to sixty in 5.2 seconds” is a better sales pitch than “35 miles per gallon,” then you deserve the pain you are feeling at the gas pump.
- Read the two links above. There really are some good ideas there.
Gas prices are not too high. We’re just using too much gas.