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McCain's gas tax holiday: Bravo!

by Jerome a Paris Tue Apr 15th, 2008 at 09:27:03 AM EST

Atrocious policies but devious politics from McCain:

McCain Proposes Break in Gas Taxes

PITTSBURGH (AP) — John McCain wants the federal government to free people from paying gasoline taxes this summer and ensure that college students can secure loans this fall, a pair of proposals aimed at stemming pain from the country's troubled economy.


To help people weather the downturn immediately, McCain was calling for Congress to institute a "gas-tax holiday" by suspending the 18.4 cent federal gas tax and 24.4 cent diesel tax from Memorial Day to Labor Day. He also renewed his call for the United States to stop adding to the Strategic Petroleum Reserve and thus lessen to some extent the worldwide demand for oil.

Let me make the following bets:

  • that proposal is going to be very popular, given how people are unhappy with gas prices;
  • it is going to embarrass Democrats, who know it's an atrocious idea, and who are going to either be accused of wanting to tax poor Americans, or to not know what they want;
  • it's going to reinforce McCain's reputation as a maverick with bold ideas (swoon);
  • this is going to be supported by Bush, pushed through Congress in record time, and divide the Democrats - and eventually be applied;
  • the price savings from this proposal will be cancelled by the increase in oil prices it will trigger;
  • rather than saying it's a bad idea, McCain will double up and propose to eliminate the tax all year long (repeat and rince the earlier embarrassment - just before the election).
As I said: devious politics.

:: ::

There is a simple answer: be bold. Call the proposal insane. Say loudly that the prices will increase to catpure the differnece, with the money going to Riyad, Caracas, Moscow and Tehran instead of Washington. Accuse McCain of financing the enemies of America and terrorists worldwide.

And be bolder: offer to incrase the gas tax in exchange for a check to all Americans based on the yearly consumption of a big pickup truck (say - 15,000 miles at 15mpg ie 1,000 gallons. Increase the gas tax by $1 and send a $1000 check to each car owner). That would be smart politics.

Why am I not holding my breath?

:: ::

Meanwhile, oil has hit $113 on news like this:

Fears emerge over Russia’s oil output

Russian oil production has peaked and may never return to current levels, one of the country’s top energy executives has warned, fuelling concerns that the world’s biggest oil producers cannot keep up with rampant Asian demand.


Leonid Fedun, the 52-year-old vice-president of Lukoil, Russia’s largest independent oil company, told the Financial Times he believed last year’s Russian oil production of about 10m barrels a day was the highest he would see “in his lifetime”. Russia is the world’s second biggest oil producer.

Mr Fedun compared Russia with the North Sea and Mexico, where oil production is declining dramatically, saying that in the oil-rich region of western Siberia, the mainstay of Russian output, “the period of intense oil production [growth] is over

Oil hits record on supply concerns

Supply concerns and the weak dollar drove oil prices to record highs on Tuesday.

Nymex West Texas Intermediate for May delivery rose as high as $113.66 a barrel, while the May Brent contract touched $111.85, also a record.


In Mexico, one of the main exporters to the US, the three main export terminals were shut due to bad weather in the Mexican Gulf.

Meanwhile, a top Russian oil executive added to concerns, after saying he believed oil production in the country had peaked at 10m barrels a day. This comes as oil cartel Opec said the world oil markets were well supplied and added that it expected a seasonal slowdown in demand - a signal that it may consider lowering its production quotas.

Bravo to McCain - his irresponsible proposal will only help show what a joke our current energy policies are.


Probably too critical of the Dems...

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Apr 15th, 2008 at 09:35:36 AM EST
In which the "this would be a good thing for ordinary Americans" argument is playing out. Naturally.
by Colman (colman at eurotrib.com) on Tue Apr 15th, 2008 at 10:14:42 AM EST
[ Parent ]
They're all about ditching oil until it comes time to discuss ways of actually, you know, dealing with it.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Tue Apr 15th, 2008 at 10:19:20 AM EST
[ Parent ]
? Fourth on the rec list!

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Tue Apr 15th, 2008 at 10:27:18 AM EST
[ Parent ]

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Tue Apr 15th, 2008 at 10:31:14 AM EST
[ Parent ]
It started like it was going to be completely ignored. Ah, the vagaries of the reclist.

Not that I'm complaining, but that particular thread has been rather disappointing. The anti-gas-tax crowd is atrociously noisy and persistent (with some of them posting literally dozens of comments to mock any supporting argument all over the thread).

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Apr 15th, 2008 at 05:21:40 PM EST
[ Parent ]
When one of my essays gets 275 comments I won't complain about it falling like a stone...

I think you are exactly right about the tax break being eaten up by a rise in oil prices, but consumers are in a bind. A starving man will make a bad deal for food.

It is always, thus - capital can afford to wait, labor must eat every day.

The sad fact is that there is nothing that can be done over the short term that will ease the pain of those unable to pay. In the US this may cause increased unemployment and an economic downturn, elsewhere it will cause starvation and civil unrest.

What is really discouraging is the lack of any medium term planning. For example, a gas guzzler tax could be imposed on vehicles (either new or all registered) which is proportional to inefficiency. This would cause a rapid (5-10 years) shift in buying patterns. But it would also cause even bigger losses in the American auto industry as they were forced to shift from their most profitable models.

So the auto industry gets protected over the short term, but everyone suffers eventually.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Tue Apr 15th, 2008 at 11:54:54 AM EST
[ Parent ]
Well, there is no need for socialism. A higher tax on gas would have done the job as well and does more for the environment, too.

I don't buy into the argument, that the oil price increase would cancel exactly the tax reduction, but if one reduces taxes one has to get the money from elsewhere, so it is not a real relieve, but just a subsidy for wasteful use of resources (I think the gas tax is mainly used for building infrastructure, there is not even a CO2 emission certificate cost on top of it).

The auto industry would be in a much better shape as well, with an high tax on gas. It pays much better off, to buy a new, less consuming car, if one saves more for the lower consumption. Of course there is a limit to this effect, where even richer people won't buy heavy cars any more, but when looking to Germany and assuming that Americans love there cars as much as Germans do, I guess the taxation which is helpful for the auto industry is quite a bit above the current US level.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Tue Apr 15th, 2008 at 12:22:38 PM EST
[ Parent ]
Lots of good support from A Siegel, but most of the Kosacks only see politics as the end game.  What a shame.  

I can swear there ain't no heaven but I pray there ain't no hell. _ Blood Sweat & Tears
by Gringo (stargazing camel at aoldotcom) on Tue Apr 15th, 2008 at 04:06:25 PM EST
[ Parent ]
The worse is that once the gas tax is "temporarily" removed it won't be reinstated, and when it is it will be seen as a new tax.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Tue Apr 15th, 2008 at 10:32:35 AM EST
The worst part is that Democrats tend to go along with this kind of nonsense. Here's another example:

The Washington Monthly

I'm not sure. But that $25 billion tax break? No conflict there. It's right up there with ethanol subsidies in the pantheon of outlandishly rapacious corporate welfare legislation. Daniel Gross explains:

The technical term for this is a tax-loss carryback. But it should perhaps be known as a bubble-head tax break....Homebuilders argue that they need relief because their sector, which provides a great deal of domestic employment, is on the ropes, and they're finding it more difficult to raise capital. Which is as it should be. After bubbles pop, those who screwed up really badly fail and get taken over by creditors or opportunistic investors. Those who have sound underlying franchises but merely got a little carried away can survive if they take painful restructuring moves. This is what is known as market capitalism.

....The proposal to give new tax breaks to homebuilders and banks is yet another example of the pernicious trend of privatizing profit and socializing losses, which is gnawing away at faith in the system. Dilute the shareholders, not the taxpayers.

The lesson here is this: Republicans will never give up. No matter what the problem at hand is, the solution is a corporate tax break of some kind. They will never allow a bill to pass Congress unless there's a tax cut included, no matter how stupid or misguided. Period.

Democrats need to stop giving in to this blackmail. Let 'em filibuster for the grand cause of the extended tax-loss carryback if they want. The rest of this bill isn't worth caving in on this, and we have to start fighting back against this kind of lunacy eventually. Why not now?

25 billion here, 25 billion there...
by nanne (zwaerdenmaecker@gmail.com) on Tue Apr 15th, 2008 at 01:40:47 PM EST
[ Parent ]

You must mean the Americans. Must be a kos diary, huh? Will go over there and recommend.

Not to beat on a general theme I've been feeling increasingly these past few months (well, years really), but the only solution to Americans "getting it" is to have it beaten out of them. Really, we're at another one of these historical points in time where a people have so badly disjuncted that there is no other way.


The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Tue Apr 15th, 2008 at 10:35:59 AM EST
We have more reasonable laws, but nobody is perfect.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers
by Martin (weiser.mensch(at)googlemail.com) on Tue Apr 15th, 2008 at 12:05:42 PM EST
[ Parent ]
But nobody wastes petroleum or pollutes like the Americans do.

They use energy like no one else but maybe the Canadians, the only two major countries over 10 kW/capita in the world, five times the global average.

And they pollute with the best of them too. CO2 emissions per capita nearly triple those of France, and double those of Germany (probably higher CO2 than france from all those coal-fired power plants Merkel has happily decided to avoid building more of with her nuke stance).

I think we need to give credit where credit is due, note taken that we can always do better. but we know that, ever since 1972, when the us was far ahead of europe, we have steadily moved forward while they have steadily moved backwards. and, when faced with economic difficulties, what's america's first political instinct (and not just those of its elites)? use more gas and pollute a little more, and that will solve everything.

third world minds in the seat of first world power...

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Tue Apr 15th, 2008 at 01:25:56 PM EST
[ Parent ]
You might be surprised at how quickly we go from "it is this way and it has always been this way" to resigned acceptance. I fear the politicians far more than the public on this one.

you are the media you consume.

by MillMan (millguy at gmail) on Tue Apr 15th, 2008 at 01:27:36 PM EST
[ Parent ]
That's because you are in one of the few islands of sanity in the US (and by far the biggest one).

Come hang out in historically left-wing MN and listen to people.

It's really sad. I just shut up. Don't even talk politics anymore. Even the Democrats are clueless, they propose funding of more road construction with regressive sales tax hike, get an historic veto override that everyone says "hey they really accomplished something"! what did they accomplish? more sprawl, paid for (as usual) disproportionately by the poor. Real progressive accomplishment there, DFL.

Really, at a certain point, you jusst throw up your hands and have to say what's the point. The rot is bipartisan.

Of course, I am going to vote this year. But with my feet.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Tue Apr 15th, 2008 at 01:33:42 PM EST
[ Parent ]
thought along the same lines when I saw it first thing this morning, except that I don't think you should limit it to car owners, and the dems could offer to balance it out with a special levy on super high earners - say two percent of all income (including capital gains and dividends) above a million or two. No idea how the sums work out, but that's not really the point.
by MarekNYC on Tue Apr 15th, 2008 at 10:42:11 AM EST
Assumes the beloved Dems aren't every bit in the pocket of those wealthy people as the GOP.

After all, follow the money.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Tue Apr 15th, 2008 at 11:50:04 AM EST
[ Parent ]
Office OFFline Web comic : Yet another language we don't support #4
Yet another language we don't support #4


by Metatone (metatone [a|t] gmail (dot) com) on Tue Apr 15th, 2008 at 11:10:39 AM EST
Won't any suspension of the gas tax only increase the profits of the oil companies because people will go out and buy more gas than ever? Probably someone has already said this above. Maybe this is complete nonsense.
by Quentin on Tue Apr 15th, 2008 at 11:57:15 AM EST
With respect to reaction from the Democratic candidates, I suggest they tell the truth and explain at some length, with paid TV time if necessary, what is going on in the world and why we still need the tax.

The next president will have to do this anyway, and if it's a Dem, he/she will have the Republicans grinding out these kinds of demagogic proposals every day.

Let's see what the Dems can do with this. Will they have the courage to respond with the truth? (I doubt it, but a man can hope.)

by Ralph on Tue Apr 15th, 2008 at 12:18:38 PM EST
Whew!  I was beginning to think I was gonna have to sell my Hummer!

We all bleed the same color.
by budr on Tue Apr 15th, 2008 at 01:27:25 PM EST
Drove past my local garage tonight to find that fuel was £1.22.9 per litre

so after handily converting to heathen units that's $9.17 per gallon(US wet)

I think I'd have to sell body parts to afford to fill a hummer.

Any idiot can face a crisis - it's day to day living that wears you out.

by ceebs (ceebs (at) eurotrib (dot) com) on Tue Apr 15th, 2008 at 06:37:44 PM EST
[ Parent ]
We pay about that much too, we just don't pay it all at the pump.  

What are the hidden costs of America's imported oil? The answer is complex. It may ultimately be unknowable. But this hasn't daunted the likes of Milton Copulos.

A tenacious economist with the National Defense Council Foundation--a right-of-center Washington think tank--Copulos spent 18 solid months poring over hundreds of thousands of pages of government documents, toiling to fix a price tag on America's addiction to global crude. He parsed oil-related defense spending in the Middle East. He calculated U.S. jobs and investments lost to steep crude prices. He even factored in the lifelong medical bills of some 18,000 U.S. troops wounded in Iraq as of March. (About $1.5 million each.)

Copulos is a highly respected analyst in Washington. And his exhaustive findings flabbergasted the Senate Foreign Relations Committee this spring.

The actual cost of gasoline refined from imported oil, according to Copulos?

Eight dollars a gallon.

When he isolated the hidden costs of Middle Eastern crude in particular, the price jumped to $11. This included a war premium that swelled the Pentagon's spending to protect all Persian Gulf oil to $137 billion a year. In a truly transparent economy, by Copulos' math, filling up Rodriguez's Jeep would run about $230.

Consumers don't dodge the bill for all these masked expenditures. Instead, they pay for them indirectly, through higher taxes, or by saddling their children and grandchildren with a ballooning national debt--one that's increasingly financed by foreigners. The result: Unaware of the true costs of their oil habit, U.S. motorists see no obvious reason to curb their energy gluttony.

"Gas isn't too expensive," said Copulos. "It's way, way too cheap."

A Tank of Gas, A World of Trouble

That article was published almost two years ago.  I shudder to think what kind of numbers Cupolos would come up with now.  I suspect if Americans knew the true cost, there wouldn't be any Hummers.

We all bleed the same color.

by budr on Tue Apr 15th, 2008 at 06:59:38 PM EST
[ Parent ]
OK. Passing over the staggering economic illiteracy of cutting fuel tax (a good strategy if we were talking about a temporary spike in fuel costs, but surely even McCain doesn't believe that's the case), this sounds highly ominous:

Offer people the option of choosing a simpler tax system with two tax rates and a standard deduction instead of sticking with the current system.

Erm... but unless you plan to phase out the existing system, that's two tax systems stuck together. In which case you always pick the system that taxes you less, so it is in reality actually a single, much more complicated tax system. And not really, y'know, simpler at all in any way.

Are any details available on this proposal? Because fewer tax bands might imply an attempt to push towards flat tax. And a 'standard deduction' sounds outright regressive. Is this a backdoor for yet more tax cuts for the rich? Is that really still where we are, in 2008?

by bobince ([and](at)doxdesk(dot)[com]) on Tue Apr 15th, 2008 at 03:34:31 PM EST
But, this is a proposal coming from the presumptive Republican nominee, ...

... so clearly the move to two bands with a standard deduction will entail a single, modest, band with a very generous safety net for 90% of Americans, with a second, substantially higher, band for the top 10%, so that those who have benefited most substantially from the broad base of public infrastructure provided more for the affluent than the poor can opt for the higher tax rate while will let them feel that they are "giving back to the system that gave so much to them".

Why, oh why the skepticism that a Republican nominee would ever hide give-aways to the rich behind talk of tax simplification?

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Apr 15th, 2008 at 04:29:26 PM EST
[ Parent ]
Burning the Midnight Oil for Progressive Populism

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Tue Apr 15th, 2008 at 04:25:05 PM EST

There's a positive side to this, the tax on diesel will be balanced with gasoline. Having a tax on diesel higher than gasoline is even more absurd than having none.

There's another negative side to this nonsense that is important to understand: when during the summer the common man in the street gets higher prices at the pump inspire of these tax breaks he'll get very suspicious.

Up to 2003 oil products prices were set by executive decision in Portugal. This caused a series of political embarrassments, the government would get a very negative image every time a price rise had to take place (especially after 2000 when the first upward movements in the barrel price).

When Barroso took office, one of the first things he made was to liberalize the oil products market by setting fixed tax rates. Shortly after crude oil prices shot up and the electors were left wondering. There is today a comon feeling among ordinary people that the oil products market liberalization was bad for them.

As final comment I would like to note that such a Liberal move comes from a supposedly Conservative party. It shows how deeply impregnated is the Liberal ideology in the political landscape of today.

You might find me At The Edge Of Time.

by Luis de Sousa (luis[dot]a[dot]de[dot]sousa[at]gmail[dot]com) on Wed Apr 16th, 2008 at 03:11:14 AM EST
I get the impression that you are confusing "liberal" as understood in Europe (meaning neo-liberal economic policies), which is espoused by almost all conservative parties now, with "liberal" as understood in USA, which has become an insult for any Republican (and for quite a lot of Democrats too, alas).

We should only expect conservative parties to go for neo-liberal policies. That's their bread and butter (and the reason why we should do everything we can to keep them away from office).

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Wed Apr 16th, 2008 at 05:45:53 AM EST
[ Parent ]

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