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Monday, June 9, 2008

McCain To Resurrect Absurd Gas Tax Holiday

McCain is at it again. He is planning to resurrect the absurd "gas tax holiday" that he proposed back in March, which was so completely and unequivocally excoriated by every notable economist and commentator who could be reached for comment those many weeks ago.

As a refresher, here are my earlier posts on how ineffectual, wrong-headed and intellectually dishonest the whole proposition is. Barack Obama has routinely spoken out and called this idea out for the shameless pandering that it is.

Here's the word out on McCain today:

John McCain is planning to resurrect his call for a national gas tax holiday, which became a staple of his stump speech in late April and early May. A McCain aide told CNN's Dana Bash on Monday that the Arizona senator planned to plug the gas tax holiday in public statements throughout the day.

Along with Barack Obama, many economists largely dismissed the notion of a gas tax holiday as a political ruse that would do little to lower prices, but McCain has repeatedly said he does not believe the proposal would be a panacea for America’s energy woes.

Instead, McCain argued, low-income families could save some extra cash to pay for their children’s school supplies this fall, or perhaps treat themselves to a nice dinner.

Here's the Carpetbagger Report's take:

McCain believes “low-income families could save some extra cash to pay for their children’s school supplies this fall, or perhaps treat themselves to a nice dinner.”

This is just too ridiculous for words. McCain wants to eliminate the 18.4-cent a gallon federal gas tax over the summer. This would cost the Highway Trust Fund between $9 billion and $11 billion. McCain hasn’t said whether he’d just increase the deficit to make up the difference, or just let the transportation money disappear, costing thousands of jobs.

And what would consumers get in return? Nothing. Putting aside the volatility in oil prices, and the fact that the cost of a glass of gas will probably go up over the summer regardless of federal taxes, Americans won’t actually be in a position to save any money if the gas tax is temporarily repealed. McCain may not be the sharpest crayon in the box, but he almost certainly realizes this.

Most economists have estimated that a gas tax holiday would save Americans nothing at the pump, because retailers would simply raise their prices to compensate. Even if we took McCain at his word that it would save some money, it would only save the average consumer $25-30!

Great, by that logic, how about a $25 gift card to Office Depot (you know, for the school supplies) or McDonald's (for the "nice dinner" that $25 can buy a family of four)?

At least that way we could waste the same amount of money giving out worthless freebies to people without depleting the state infrastructure renewal funds that are funded by the federal gas tax.