Democrats’ Grand Gas Tax Plan
By Justin Gardner | Related entries in Economy, Good Decisions, Money
If this is true, it’s a great idea. Right in time for the summer driving season and…yes…the fall elections.
From Raw Story:
Democrats are set to introduce a measure that would create a “federal gas tax holiday” by eliminating the federal tax on gas and diesel for sixty days, RAW STORY has learned.The measure, proposed by Sen. Bob Menendez (D-NJ), would reduce the cost of gas by $0.184 per gallon and the cost of diesel by $0.244 per gallon. The move, aides say, will provide $100 million dollars per day in relief.
Democrats say the money will be made up by cutting six billion dollars in tax breaks to oil firms. Currently, the money from the federal gas tax goes to the Highway Trust fund.
Again, this is smart thinking by the Dems because it gives quick relief to Jane and John Q Public, while addressing the record profits the oil companies have been posting recently. Take from the super rich and give it back to those who need it. And somehow, this time, I think a majority of the public is going to be receptive to those priorities. Somehow, I don’t think calls of “class warfare” aren’t going to be forthcoming.
I’m just saying…
Meanwhile, Bush moves to ease environmental rules so the oil companies can produce more gas. He also says the government won’t buy any oil for the next six months. Net effect on the price of gas?
While the amount of oil that would be freed up by suspending deposits to the strategic reserve is small, analysts said it would help by sending a signal to oil companies that the administration is serious about the issue.Nevertheless, administration officials conceded that their power to hold down or reduce gasoline prices was limited.
Scott McClellan, the president’s spokesman, told reporters that the actions announced today “will help some in the short run.” However, he had pointed out on Monday, “This is not something we got into overnight and it is not something we are going to get out of overnight.
If the question is “How much will the administration’s moves effect the price of gas?”, this talk by McClellan seems like code for “Not much.”
This entry was posted on Tuesday, April 25th, 2006 and is filed under Economy, Good Decisions, Money. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
April 25th, 2006 at 9:00 pm
So you decrease the tax on gasoline, but increase it’s production cost by the same amount? Assuming that the gas companies push the cost down to the consumers (and I can’t for the life of me see why they wouldn’t), wouldn’t that be a wash in terms of the price of gas? And furthermore, is it really a good idea to break the link between the cost of roads and the gas tax?
Political grandstanding.
April 25th, 2006 at 9:04 pm
You’re mixing a lot of things up here. But we’re not breaking the link between the cost of roads and the cost of gas. If anything, we’re highlighting it by taking those tax breaks from the oil companies to make up for the taxes we are cutting.
April 25th, 2006 at 9:05 pm
My three-minute rant on this, if you’re interested.
April 25th, 2006 at 9:46 pm
I read it, and I agree. Still, if the oil companies are making record profits, then I think the Dems’ plan makes the most sense. After all, Americans are only getting temporary relief, but it’s at the oil companies expense. I’m okay with that.
April 25th, 2006 at 11:01 pm
I think cutting any tax is questionable given the deficit. And we should have had higher gas taxes not lower. This is the best way to push alternatives. Like sophisticated car pool systems (with identity checking for security) which link people in real time by computer or phone.
I do agree we cut subsidies. And in a real market companies can’t simply magically pass the differences increases along. They must compete. Right now profit margins are huge for oil, only some “competitors” get the social welfare and we could use the money. It’s true to a large extent that oil is not a true market (which is why rightists love it because they believe in feudalism with protected niches) but if things worked according to capitalist practice a cut in this corporate welfare would mean that the companies who benefit would have to cut other costs (such as corporate compensation) to compete with those who currently produce without them or accept lower profit margins.
Contrary to the wishes of bushiteers such as the one above corporations are not allowed to simply set prices. I know this is the way that Cheney does it in Iraq but it’s not a free market. All the subsidies do is give the less efficient producers a chance to earn higher profits or to extract oil at higher costs than iit’s worth. There are other mechanisms. for doing this. In times of low oil prices (when these measures were created) there were arguments for mantaining inefficient wells just to keep domestic supply and to make sure some exloration and productive capacity was active, but this has changed. It is not economically justifiable right now.
If companies are following market priciples they will be using their own considerable money to find and develop every resource they can. They are not but we can’t jump stasrt this. If government money must ber spent it is best used in subsidize and help start alternatives that are not fully competitive (we’ve helped many industries this way) or to subsidze insulation or geothermal heating/cooling systems for solidly built bildings housing the lower incomes or a wide variety of other things.
Oil does not need subsidies at this time. If in fact the companies can pass on the loss of these subsidies then we do have oligiploial market which violates many laws which is not something to be applauded despite the wishes of the Bushiteers who seek to destroy capitalism and replace it with a propertied nobility, the socalled “ownership society.”
April 26th, 2006 at 8:12 am
Who wants to bet that these sixty days will not be in the summer, but rather in, say… September through November.
April 26th, 2006 at 8:22 am
Tom — you are exactly right. It is a shell game, but they could time the tax so that the increased production costs aren’t immediately realized. Such a “holiday” might also create a demand push for gas, which in turn will just put prices back up, possibly beyond the current level.
Political grandstanding, absolutely. Why don’t they simply cut the gas tax and forget about the roads. We are a “roads” addicted society. We are “highway” addicted society. Stop feeding the monkey!! Eisenhower was an a-hole.
GAS POLICY: FIRST DO NO HARM — (congress read: do nothing)
April 26th, 2006 at 8:23 am
I have to wholeheartedly disagree with a gas tax “reprieve”. Not only will it leave a huge gap in the Highway Trust Fund that will have to be made up with even more general tax revenue than already is, but that 18.4 cents per gallon also includes a 2.8 cent per gallon mass transit tax. Now is not the time to be cutting that tax at all, as many mass transit systems are looking to expand in the facr of the highest ridership they’ve seen in decades.
C’mon, like we’re seriously going to see money redirected into the Highway Trust Fund. It’s underfunded as it is and we don’t need to do anything to disrupt that funding, if for no other reason than it will further mask the subsidy that the government gives to the car. Why can’t we just cut out the subsidies to the oil companies without affecting the tax levels? I don’t think they need it right now.
Besides, I don’t think that the proper way to deal with high gas prices is to artifiically lower them. “Hey! Gas is expensive because demand exceeds supply! Let’s cut taxes so that demand will increase! Who gives a crap about conservation, alternative energy, funding a proper rail system, or overall lifestyle adjustments?” Then, in five years when gas is $5 a gallon and we long for those quaint days of $2.95, we can once again discuss temperary tax reprieves. Good times those will be.
After all, many states already went through this about five years ago when gas inched up to $2 a gallon. The sky was falling, gas was so expensive, so many states stopped collecting taxes for a few months. Gas tax reprieve have no long-term effect on the price of gas, but they do have an effect on the state of repair of roads.
Big oil isn’t gouging us. It’s that we’re dumb enough (myself included) to keep buying their product no matter the cost without demanding true alternatives.
April 26th, 2006 at 11:31 am
“Big oil isn’t gouging us. It’s that we’re dumb enough (myself included) to keep buying their product no matter the cost without demanding true alternatives.”
Well, actually big oil is gouging us. I don’t think we’re dumb to keep buying their product because we have to. I demand a true alternative, but I can’t boycott gas until that happens because I have to go to work everyday, and there is no feasible public transportation system for me to use – well, I guess I could take the bus, but where I live, the bus is full of dangerous people that I would rather not tangle with, so therefore, it’s not feasible.
With that said, I agree that we should not have any sort of tax break. It’s just not a good idea, for all the reasons mentioned above. However, I wholeheartedly agree with the part where we cut tax breaks for oil companies. In fact, as I have said before, we need to seriously investigate and overhaul the entire industry, including a rule whereby any lost profits come out of top oil executives’ salaries instead of being passed on to the consumers.
April 26th, 2006 at 12:59 pm
When removing the federal gas taxes was last discussed, an economist friend of mine said it won’t work because prices tend to rise to whatever level the market will bear. So, for a day or two after the raxcut, consumers will save 18 cents a gallon but by the end of the week, the price would be right back up. Result: profits increase for the gas companies and the nation loses tax revenue.
I don’t know if that would happen, but it wouldn’t surprise me.
April 26th, 2006 at 1:14 pm
Meredith — while the bus stops/stations might be VERY dangerous due to the vulnerable nature of anyone sitting waiting for something in the city — The actual ride on the bus and the people on the bus are quit nice. Sure, they are poor and sometimes they smell piss/alcohol and sometimes they can’t keep their naked children under control — but lets not be elitist.
Maybe you would like a seperate busing system for yuppies — I would: clean, quiet, stimulating conversation, doesn’t smell like piss, but various fragrances sponsored by Bed, Bath & Beyond, lattes served at each stop, copies of the New Yorker to read behind every seat and, of course, head-sets for those of us who want to listen to NPR while we internally glow knowing that we are helping the environment. :)
You know, buses have to pay for gas too. Does anyone know if the cost per ticket on a metro bus has gone up since this little oil spike?
April 26th, 2006 at 1:44 pm
Dos,
I hope you aren’t making fun of me. I was recently bashed in the head with a hammer at my apartment (it’s a long story – well, maybe not that long, but the details are unimportant). Therefore, I am feeling a little skittish at the moment about being in confined spaces with anyone who is either: a) on drugs; b) drunk as hell; or c) crazy as a shit house rat. I would really like to help all of those people, and in fact, my biggest goal in life is to find a legal job where I can do just that, while still being able to at least pay my bills, but for the time being (at least until my PTSD subsides) I don’t want to sit next to them on the bus, unless my boss would be OK with me being pumped full of Valium all day long.
April 26th, 2006 at 3:07 pm
Meredith –
I’m sorry. I was just having fun, not trying to be mean. Your ordeal sounds horrible and I hope they catch the perpetrator(s).
My PTSD (the result of a nighmarish lap-dance I received at Saznack, Topeka, KS circa 1992) is helped by a healthy regiment of Kolonipan. But late at night, the image of that Beast looming over the hotdog buffet with a cigarette dangling between her gums, jolts me out of bed in a cold sweet.
Oh shit, I’m crying….I’ve gotta go…pray for the dp.
April 26th, 2006 at 9:59 pm
I think it about time we stop blaming just our government and the oil companies for the hole we’ve gotten ourselves in. We (the public) are not only the primary cause of the problem but we are also the best hope for a solution. We don’t have to buy those big gas guzzlers. We can force local governments to provide more mass transit. We can drive less. Sitting on our rear ends and complaining loudly while doing nothing is a sure path to failure.
This is like back to the future. We went through this same thing in the seventies. Gas prices soared. Detroit was caught with their pants down, without any fuel efficient cars. That let Toyota, Honda and Datsun into the US car market for good. The exact same thing is happening again. How stupid. We didn’t learn anything. We placed most the responsibility on the government and almost none on ourselves. That worked pretty good, huh. Thirty years wasted.
As soon as we blame something else, like the governerment/oil companies, for our problems, then we render ourselves powerless to change our situation. I say baloney to that. Suck it up, take responsibility and rely more on yourself and less on the government.
April 27th, 2006 at 7:24 am
Do you really think it’s worth the effort for anyone to talk about Democratic party strategy for November, when the Republicans are protected by audit-free electronic voting? They are going to rig the outcome in their favor.
The Democrats have no chance of retaking the house or the senate while there is no ability to verify election outcomes. If you want to talk about Rovian misdirection, this is the biggest one of all – while the Democrats get gleeful about polls, he sits back and gets ready to pick the next Supreme Court justices.
And when people do grumble about this in November, it will be way too late.
They do not need to rig every district. Just enough to make the small difference they need.
(Or do you think the Republican party can be trusted with the elections process?)
May 23rd, 2006 at 3:42 pm
No political party, or political solution, will solve this matter. Gas prices are going to continue to rise. We could slow this down with legislation, but it’s like trying to put a band-aid on an arterial wound…. we’ll bleed to death eventually. Demand is constantly going up for oil. And supply is constantly going down. Do the math.
These are all signs of a larger sickness that is affecting the world at large. Basically, everything is going to hell. And the ride isn’t going to be smooth and in a handbasket. It’s going to be rough, rocky, and we’re all going to be screaming on the way down.
Say hello to the inklings of the apocalypse. Overpopulation of human species + overuse of available resources by said species = extinction of said species.
December 7th, 2006 at 6:55 pm
DealWatch for Beauty Products
…it can be hard to find good deals on the internet. These will make amazing gifts for women this holiday season. The following are great deals and discounts on beauty products such as body polish, lotions, fragrances, candles…