It Is Dangerous to Take Gifts From Politicians

Senator John McCain has proposed a gas-tax-holiday, a ‘gift’ if you will. Every year, just before the summer driving season, someone in congress proposes just such a break to ease our economic woes. Has it ever happened? No. Will it happen this time? Let’s hope not.

The amount of federal tax collected on a gallon of gasoline is 18.4 cents, roughly 5% of the current average price of $3.38/gallon. This would save the average commuter between $3 and $4 per tank. If the average commuter fills their tank once a week, then by the end of this three month no-tax period, he/she could conceivably save $36 to $48 which is truly a paltry sum.

During that time, the federal government would lose $9 billion and more than 300,000 jobs. The federal Highway Trust Fund, which is supported by this tax, is already facing a $3.4 billion shortfall to finance much needed infrastructure repairs nationwide. The federal transportation department says every $1 billion in highway spending creates 34,779 jobs. Sure, it would help companies like FedEx and UPS who are struggling to stay profitable due to high gas prices, but saving some jobs only to lose others is not a very responsible economic policy.

McCain plans to cover this loss with money from the general fund which would add to the deficit. Also, a very stupid and short-sighted idea. It saddens me that this is the best that a presidential candidate can come up with. And of course, since this proposal is outright political pandering for votes, Senator Hillary Clinton jumped right on it. America is in for more serious trouble.

There are several major drawbacks to this ridiculous proposal. First, by making gasoline cheaper during the busiest driving time of the year consumers will only use more of it. This not only quickens our pace towards the bottom of the trough but it would have immediate detrimental financial and environmental effects by increasing the price of a gallon of gas, increasing the amount of CO2 emissions (which contradicts Senator McCain’s stated goal of reducing CO2 emissions) and increasing the profit to oil producers.

Does this still sound like a ‘gift’?

“You don’t want to stimulate consumption,” said Lawrence Goldstein, an economist at the Energy Policy Research Foundation, interviewed by the New York Times. “The signal you want to send is the opposite one. Politicians should say that conservation is where people’s mindset ought to be.”

Mr. Goldstein said that instead of freezing the federal tax, the government should help lower-income populations pay for gasoline. It would be cheaper and benefit those households that need it most.

This guys shows much more leadership quality than any candidate we are currently forced to deal with.

The United States has the lowest gasoline taxes among industrialized countries. It also has the highest gasoline consumption level in the world, nearly 25% of all gasoline consumption is by Americans. Energy experts say the two are related. Raising the tax on a gallon of gas would slow down its consumption and finally force us to think about our driving habits and force us to be more energy conscious.

Haven’t we learned yet about what they say about accepting gifts from politicians? We always pay more for it in the long run.