Sam Stein at The Huffington Post goes in search of one, just one professional economist who thinks the McCain-Clinton-RNC gas tax holiday is a good idea:
I started with what I thought would be my best shot, the libertarians. Jerry Taylor, a fellow for the Cato Institute, unfortunately, called the proposal a “holiday from reality.”
“What would happen more likely than not, gas taxes would be cut, but pump prices wouldn’t go down, service stations would just continue charging what they are charging,” he said. “I’m a Libertarian and I don’t mind that. But you might not be a Libertarian and you might believe the federal treasury needs that money… Now if this were a permanent reduction of the tax, I would be all for it.”
Alright, one “no.” Perhaps the free-marketers would be of a different ilk. I was wrong.
“I think it is close to political pandering,” said Max Schulz, a senior fellow at the Manhattan Institute. “It is bad policy and political gimmickry. If you want to deliver relief to folks you have to do more than just this little holiday from the gas tax. You have to address what is driving the price of crude oil, even problems with the weak dollar. You aren’t going to win any points doing that, however. But you will get points if you get up and say let’s suspend the gas tax for a few months… I never have seen the wisdom of playing gimmicks games of the tax code.”
Who, I asked, would favor the proposal? “Political advisers to candidates,” was Schulz’s response. “It is entirely due to the focus of the presidential election coinciding with the summer.”
From Schulz, I moved on to the conservative crowd. But Ken Green, an energy expert for the American Enterprise Institute, ended up being similarly dismissive.
“There would be economic sense in eliminating the gas tax completely and replacing it with tolls. That would make sense,” he said, “but if you remove the tax now, the things being funded with the money will still need funds. Or it will be funded with taxpayer’s dollars from other things. So it will be less at the pump and more in your tax bill.”
Stein had similar bad luck on the left side of the spectrum:
Bob Sussman, an energy analyst with the Center for American Progress, and, for full disclosure, a supporter of Barack Obama, saw little benefit or popularity to either Clinton or McCain’s proposal.
“Rather than indiscriminately suspending the gas tax, if we have a revenue source here to help people in need, we out to target the money to people who really need it. And if you suspend the gas tax you are giving a small break to every body instead of a significant break to the people pinched by the high prices,” he said. “They might appreciate a small economic break. But I haven’t heard anyone clamoring for this.”
(…)
Finally, I got a quote from Robert Shapiro, formerly the undersecretary of commerce in the Clinton administration and the author of “Futurecast.” An independent voice with ties to the former first lady, however, did not give the expected results.
“Stated as clearly as I can,” he wrote, “it’s utterly misguided both environmentally and economically. Environmentally, it does actual harm, since it reduces the price of producing greenhouse gases. And economically it’s trivial or worse — by reducing the price of driving it encourages more of it, thereby increasing demand for gasoline, which inevitably pushes the price back up - the consumer gains nothing, and the oil companies and OPEC collect the extra bucks instead of the government.”
In other words, this is political pandering based around the idea that the average voter doesn’t really understand macroeconomics. Tell people you’re cutting a tax, and they’ll think they will been fit from it. When reality hits, the election is over and you’re safely in office.
There’s really no difference between this proposal and the phony economic stimulus package that passed a few months back. Both of them are designed to address problems that can only be solved in the long term with short-term, meaningless proposals that will not accomplish what their proponents claim they will, and may well do more harm then good.
It’s the same game Washington has been playing for far too long. And, frankly, I’m sick of it.
Related Posts:
The Gas Tax Holiday Scam
Obama Is Right: The Gas-Tax Holiday Idea Is A Phony, Pandering Scam
Hillary Clinton Panders At The Gas Pump
How Much Would You Actually Save If The Federal Gas Tax Was Suspended For The Summer ?
Obama Responds To Hillary’s Gas Tax Ad
More On The Gas Tax Holiday Scam
Hillary Clinton Continues To Demagogue The Gas Tax Holiday
The Gas Tax Holiday: Political Pandering And Economic Stupidity In One Convenient Package
Bloomberg On The Gas Tax Holiday: The Dumbest Idea I’ve Heard In A Long Time
May 2nd, 2008 at 6:08 pm
Anything that allows the consumer to pay lower prices is always a good thing. It is more important for the American people to have money to spend than it is for the government to have money to spend.
This gas tax holiday certainly isn’t a permanent solution, but it is better than paying the inflationary prices we will see starting on Memorial Day. Every little bit will help.
May 5th, 2008 at 9:11 pm
It’s just about the dumbest idea I have ever heard. Not to mention the fact that what Clinton and McCain are saying is pure fiction - it will never pass by summer and they know they are bullshitting us.