Gas Tax

The major talking point brought on by Sen. Clinton in her latest attempt to win a losing Presidential Primary is this idea of a Gas Tax Holiday.

Let me first say this is a bad idea. Not only because President Bush is willing to consider the proposal, a red flag, but also because we are simply going to fund even larger profits for oil companies in the U.S. At this point, Senator Clinton and Senator McCain are simply banking on the poor and ignorant masses of the American Public.

On the surface it sounds nice. The government will suspend its tax on gasoline and according to the Clinton plan, the oil companies will fund the losses to the government through their record profits so the common good is accounted for.

Nice idea. Unfortunately, it is not how the real world works and continuing to extol the non-existent virtues of such a plan is nothing short of lying to the American public and preying on their fears and real problems.

A realistic look at the issue shows that it would save the average American something in the realm of $30-$50 a month. I agree with Senator McCain when he said that is not a lot of money to economists but to real Americans economically strapped in tough times that means a lot. Yes, every bit we can save helps. But the reality is those savings are non-existent.

Let's think about reality for a minute. If Senator Clinton's plan comes to fruition, the President would suspend the gas tax. Dropping the price of gas by about eighteen cents a gallon. Americans respond quickly to cheaper prices. We would no doubt see an increase in consumption. The supply has not gone up, just the demand. So the speculators on Wall Street would have foreseen this and thus drive up the price of crude per barrel from its current $120 per barrel to possible a new record at $130 per barrel. Gas is now across the board over $4 per gallon. So from our current place at say $3.70 per gallon we have added thirty cents to the price of a gallon of gas, twelve cents more than the gas tax.

But, as soon as the President agrees to suspend the gas tax, oil companies will no doubt see this as an opportunity to say the demand will go up and they will raise their prices by, and lets give them the benefit of the doubt, half of the tax, nine cents per gallon. There is no reason to believe the oil companies will say if we are going to have to fund the loss of the gas tax through new windfall profit taxes that they will not pass that on to the consumer. So let's say they have half a heart for the consumer and only pass on half of the tax to the public. Now we have raised the price of gas by thirty-nine cents or twenty-one cents more than the gas tax.

Now we come to September. The gas tax holiday is over and the government puts the eighteen cents back on gas. But judging from the losses they sustained during the holiday because tax loop holes allowed the corporations to only pay in half of the losses, to save the infrastructure the government must now raise the gas tax by something modest, five cents. Now the gas tax is twenty-three cents per gallon and now gas prices are if everything remains the same, $4.32.

For $30 a month for three months we have raised our gas prices by 62 cents, which means we have cost ourselves $70 per month starting in September, so all those savings for three months will be gone in the first month and one-half when the holiday is over.

No thank you. I will agree with President Bush on this, we are too dependent on foreign oil and we need to explore new sources at home. Leave the gas tax on and instead of taking three months off, take those tax dollars and fund new technologies and research on better energy. Save me money over the long haul and don't put false promises in front of me while trying to hide the real issue that will still exist.

Thank you
Joe Hursh