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18 Comments For This Post

1. anonymous Says:
   May 5th, 2008 at 12:19 pm

   Frankly, the price of gas is so high now that taking off the few cents of tax would not make me drive more, to address that argument. I quit driving out of my way back when it hit $1.50/gallon. I live in the city so West County Mall, South County mall, restaurants in the county, all the places I used to go–not any more. The closing of Hwy 40 hasn’t affected me at all because I no longer drive that far!

   It’s not the best idea, but I do like the idea of shifting more costs to the oil companies, which is a ideologically very different from the McCain approach–don’t tax at all but keep spending money! To say Hillary and McCain are offering the same proposal is really not fair.

2. Clark Says:
   May 5th, 2008 at 1:03 pm

   It’s essentially the same idea. Hillary has endorsed suspending the gas tax. She’d pay for the lost revenue to the Highway Trust Fund by asking for a windfall profits tax from oil companies. But there’s no way that a windfall profits tax on oil companies would make it past Bush’s desk, even if the Republicans didn’t mount a filibuster in the Senate.

   So she’s essentially just endorsing McCain’s idea, which is a boondoggle. And the price of gas will almost certainly go up either way, because the oil companies will charge more to make up the difference. In fact, they are more likely to do so with a windfall profits tax.

3. Douglas Duckworth Says:
   May 5th, 2008 at 1:23 pm

   If oil companies pay the tax they’ll pass along that cost to consumers.

   If I’m wrong and prices do drop then consumers will stockpile in anticipation that the prices will eventually increase. This stockpiling increases demand thus prices. Or they’ll drive more as the cost of commuting has decreased slightly. This again increases demand thus prices.

   This is Economics 101. Clinton is an idiot.

   Robert Reich isn’t an elitist. He worked for her husband and currently teaches at UC-Berkeley, one of the best public universities in the nation. And where does she get off attacking elitism? She’s always been an elitist and I didn’t ever see her on the streets of Chicago as Obama was.

   Gas prices will continue to rise due to China’s industrialization and their rapid acceptance of the automobile. This is a reality which simply cutting an 18 cent tax cannot address.

4. Curtis Says:
   May 5th, 2008 at 2:56 pm

   Right on Doug. This made sense to me from day 1 when it was first proposed by McCain. I’m a coservate, Republican/Independant and I knew right off McCain’s idea was terrible. Hillary’s is no better, though the debate on if it’s different is still out.

   Honestly, if you owned a for-profit business and people would buy just as much of your product if you raised the price 25% you would raise your price. The short-run demand puts us buying nearly the same amount of gas we are now at nearly any price. Our only answer is to change our habits in the long run. It’s starting to happen as fewer SUV’s are being purchased (and those that are purchased are getting smaller), more compacts, sub-compacts and hybrids are getting purchased, and our gas consumption is slightly lower (0.2%) over last year.

   There is only going to be so much gas to buy in the market and the gas companies will raise the price to the highest they can charge and still sell all of what they make.

   Guess Hillary doesn’t care what economists say, she must be smarter than them. Go Obama!

5. Papillon Says:
   May 5th, 2008 at 3:05 pm

   Obama, if he were smart about it, would say, a lot, we tried this in Illinois and it didn’t work. He said it on Meet the Press, but he should be pounding it like a drum. ‘Senator Clinton says I don’t have enough experience. Well, I’ve experienced a gas tax holiday and the consumers don’t benefit!’ Maybe he has been, as I am not following the race super closely.

6. flyover Says:
   May 5th, 2008 at 6:36 pm

   The gas price issue is the biggest issue with voters right now. Obama needs to say something more definite than “we need to move to alternative fuels,” duh. People want to be inspired. JFK said, we would land a man on the moon by the end of the sixties. Here’s the magic formula and whoever embraces it will run away with this election. Allow drilling on Federal land and oceans. Allow the oil exploration companies to recoup their risk of finding the oil (where it isn’t already known) and then sell it to American refineries at a reduced price. The profits from the crude would go into a lock box (sorry Al) and used to fund a Manhatten project on alternative sources of fuel. Just because there isn’t a viable alternative to oil now doesn’t mean we have to give away our standard of living while we wait for the next big thing. We can have both and the country is just waiting for someone to say it.

7. Clark Says:
   May 5th, 2008 at 9:34 pm

   There’s environmental damage in both oil drilling and in the burning of fossil fuels. Better to raise the gas tax, coupled with a rebate for low income workers. That way, it’s neutral for those who aren’t able to quickly afford hybrids, or housing near public transportation, let alone higher gas prices, and it pushes everyone away from gasoline as a fuel. The excess can go toward funding research on alternative fuels.

8. flyover Says:
   May 6th, 2008 at 8:13 am

   subscribing to that nonesense will drive this country into a ditch. You are also putting a hardship on those who can least afford to pay for hybrids, etc. America isn’t New York where there are alternatives to cars. The infrastructure is here. Even if you see this as a way to make people move out of the suburbs, a stupid idea anyway, it would take decades to happen. You would be creating a vitual subclass of people who would not have the ability to travel for jobs, etc. New technology has defeated all those Al Gore arguments about drilling causing damage. Double hulled tankers and new drilling technology are safe and undeniable. New cars, even non-hybrid cars are getting better milage. I just bought a new V8. It replaced my old V8 and gets approximately 10% better milage. I am averaging over 20mpg. It is possible to get improved milage while we develop a new fuel. As Clark rightly points out, higher prices will cause people to use less. The trick is: how do we conserve while not killing the golden goose that is our economy? Look at the multiplier effect of almost $4 gas. Restaurants are empty and going out of business left and right because people don’t want to drive and don’t have extra cash. That means low wage employees are being fired. That means they will go on the public dole. That means taxes will go up. that means productivity will go down. And on and on. The new car I bought came in a hybrid model. I did the math. Gas would have to be $20 a gallon for the entire time I own the car (assuming I owned it for about four years) for me to come out on the deal. Guess what? I bought the regular model. Clark suggests rebates for lower income workers. Doesn’t work. That’s the thing I can’t stand about politicians. They want to attack every problem by manipulating the tax system. Tax rebates come once a year, assuming you don’t owe other taxes. Normal people just are not capable of pro rating that credit over the course of the year. Baby needs new shoes, the water heater breaks, something happens and that money gets spent and its back to paying $4 a gallon. We need someone to stand up and say: “We’re going to put our best minds on it and here’s how we can pay for it and not kill our country in the process.” The guy (or girl) who says that will win.

9. Clark Says:
   May 6th, 2008 at 9:26 am

   The only way to lower demand is to raise the price. The price is going up anyway, so it’s better to artificially raise the price and divert that money into better transportation and housing programs, as well as research programs for alternative fuels. It will take a while for the full effects to be felt, but then again, drilling for new oil will also take time, since we’ve already tapped most of the easily accessible oilfields. And that just keeps on the same path as before.

   And the idea that our economy will shrivel and die under higher gas taxes coupled with an emphasis on reneweable energy investments, well, that’s just silly. Germany has $8/gallon gas, almost all of which is added by tax. Yet they are producing jobs by investing in wind and solar, and they have far less wind and sun than America does.

   It’s not just self-professed liberals like me who favor a higher gas tax. See Greg Mankiw: http://gregmankiw.blogspot.com/2006/10/pigou-club-manifesto.html

10. flyover Says:
    May 6th, 2008 at 9:44 am

    Raise the price and divert that money into better transportation???? That money is going to Mid-East. They are not going to spend any of their money building anything here, except hate for our way of life. You sit here and allow the Chinese to drill right off our own Florida coast, but you don’t allow our own companies to drill. It has been suggested that even the threat of allowing drilling in Anwar would cause oil to fall. The German (and other European) economies infrastructures have been built on the premis of higher gas prices. Ours was not. So, the only way to make it happen is to lower our standard of living over the decades of transition. That is not how most Americans want to live. There is no leadership on this issue from either party. Monkeying with the tax code doesn’t fix anything. Leadership toward a stated goal and finding new (i.e., oil drilling) sources of revenue to cover the cost is the only way to make it happen. OPEC is very shrewd. Gas prices will come down soon in order to allay all the demand for new fuels. They did it in the seventies, they did it during the eighties and they did it during the nineties and our sucker politicians keep falling for it.

11. Clark Says:
    May 6th, 2008 at 10:05 am

    Where to begin? The price of oil is going up right now, and that money is going to the Middle East, to Venezuela, and to Russia. But if you raise the price of oil artificially, with a tax, that money goes instead into federal coffers to be spent on public transportation, green housing, and investments in renewable energy. Raising the price will curb the demand.

    The threat of drilling in the Alaskan National Wildlife Refuge might lower the price of oil briefly and not by much, but it will go back up. The field will take a while to develop, 10 years or more, and there’s not enough oil there to offset the increase in US demand, much less world demand.

    And OPEC is pumping as much oil as they can. If anything, they are trying to fool everyone about how much oil they still have (especially places like Saudi Arabia.)

12. flyover Says:
    May 6th, 2008 at 1:36 pm

    So, you are suggsting increasing the TAXES on top of $4 gas? You have never really had a job in the real world, have you, Clark? If your objective is massive unemployment and economic depression for the sake of unproven “Al Goreism” your plan would be valid.

    Oil prices are up, somewhat due to increased demand, however, and the financial markets are something I understand extremely well, they are spiking so high due to speculation. Speculators work on future expectations. Yes, it would take a while to open new oil fields, but those speculators will start factoring that into their risk decisions. The risk is amplified because the oil is in the hands of unstable people (Mid East, Chavez). If more oil was in the hands of stable countries, the risk would diminish and futures would trade down. All we need here a is a short squeeze. These gamblers who speculate that the insanity of the Mideast and our stupid energy non-policy will continue, will see their huge gains turn into dust when the lemmings on Wall Street follow each other off the cliff when everyone thinks the rules have changed. Don’t your get it? Its a self fullfilling prophesy. Today Goldman Sachs says oil could hit $200. How does Goldman make its money? Trading. They don’t make anything. They don’t sell anything. Its like the old guy on Trading Places told Eddie Murphy: the good news is whether the price of gold goes up or down, Duke and Duke still makes a commission. There isn’t the financial elasticity in our economy to raise taxes on a requirement of daily life. The food chain will break and our lives will all change for the worse. Hear me, I am all for finding another fuel. I am not in favor of bankrupting the country, especially since we really don’t even know what that fuel is yet. Ethanol is a bust and is causing starvation. There isn’t an effective electric battery that can survive without a boost from gas or diesel. Its like getting ready to leave for Chicago and saying, I know there’s a better way than this car, so even though I don’t know what it is, I’m junking the car. The rule of life is that everything takes longer and costs more than you think. We cannot let these stupid policies bankrupt us while we figure it out.

13. Clark Says:
    May 6th, 2008 at 2:23 pm

    Considering that we are headed for higher gas prices anyway (and we are - it’s not just speculation), we might as well add a tax. If prices are going to stabilize at $4 or $5 a gallon, we might as well have $1 of that go towards weening ourselves off gas. We’re going to have to do it anyway when oil becomes prohibitively expensive.

    And yeah, I work in the real world. Have you?

14. flyover Says:
    May 6th, 2008 at 5:35 pm

    I was talking about speculation on the futures market, not idle speculation. Anyone dumb enough to suggest a dollar gas tax would be run out of town on the third rail.

15. Clark Says:
    May 6th, 2008 at 8:21 pm

    Like Greg Mankiw, one of Bush’s top economic advisers for his first term? Did you bother to read the link?

    And I was also talking about futures speculation. You think that there’s a speculation bubble that’s worth $100 a barrel? The price of oil is going to rise because supply cannot keep up with demand. OPEC is producing as much as they can. The old oilfields are being exhausted faster than new discoveries can replace them.

16. flyover Says:
    May 7th, 2008 at 7:08 am

    The sky is blue. Grass is green.

17. Clark Says:
    May 7th, 2008 at 8:56 am

    Finally you know what you’re talking about!

18. Idiots Says:
    May 7th, 2008 at 6:44 pm

    Gas is still too cheap since MODOT builds more unneeded highways. More roads means more dependency…who bribes these clowns?

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