The great part about the Gas Tax Holiday is that it would provide short term relief for many Americans. $69 might not be a lot for everyone but it still has purchasing power (even though it probably couldn't even buy a full tank of gas for an SUV anymore). Short term relief is what's need to stimulate our economy right now.
It may provide some very insignificant short term relief, but because of the increase in demand in the long term gas prices will rise even further (further still if oil companies jack up prices to replace the tax). There is a reason 200 economists got together to speak out against this, one calling it "just bad policy."
It would be even better if they would take that tax and eliminate it completely...but this is a good start!
If it's such a bad idea, why are two of the three major candidates for President pushing it?
Think about it. Politicians!!!!!!!!!!! Wanting Votes!!!!!!!!!!!!!!!! Get my drift?
If the gas tax holiday is bad, then either politicians are wrong and voters don't really want it and won't vote for them because of it or voters are wrong and want the holiday even though it is bad for them. It's easy to say the politicians are wrong, miscalculations happen and the truth will out in the polling numbers. But to say that masses of voters are wrong about their own interests ought to be harder, to go against them is by definition to say you know better then they do what is good for them. That's not to say that large numbers of people are never wrong, it does happen (real estate bubble, internet bubble, 2004 presidential election). I think it just doesn't happen that often and claims of such shouldn't be thrown around lightly.
In my experience the majority of people are often wrong about many things. It takes a certain amount of effort to educate yourself about the world around you -- more effort than most people are willing to exert. And that's not even getting into all the biases and mental traps people tend to fall into.
For one thing, this gas tax holiday doesn't seem all that popular. Hillary endorsed it an ended up with a worse run in Indiana than expected. Secondly, majorities tend to be incorrect as a rule. If you asked every single American what the capital of India is most will give you an incorrect answer. This goes with nearly everything, and in cases where the majority is correct, they are usually beat by minorities that are even more correct (or correct in more detail). In other words, let's say a majority knows the capital of India, a minority not only knows the capital, it also knows when the city was founded, its history, its major religion, etc..etc.. Truth is truth, and the number of people who endorse a particular idea, who those people are, what religion they practice, how old they are, and anything that isn't related to the actual evidence and reasons supporting a particular fact is simply irrational to consider when deciding whether something is true or false (or bad or good).
"For one thing, this gas tax holiday doesn't seem all that popular. Hillary endorsed it an ended up with a worse run in Indiana than expected." That's an argument that McCain and Clinton miscalculated the public's response to the holiday plan. As I indicated previously, that's not a hard argument to make and polling data can prove or disprove it. I don't know of any such polls but would like to see them. Anyone? Clinton's recent decline in relative popularity is not evidence by itself. It could be due to any number of factors, and I'd point out that there has been no appreciable decline McCain's popularity despite his support for a similar policy. With respect to whether majorities tend to be correct or not, I feel that question is significant and different enough from the gas tax as to warrant it's own debate.
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I agree, this is applying a band aid to a gunshot wound. Sure, it seems like it's a good idea and it may even help out for a little bit, but ultimately it is not getting at the root of the problem.
If enacted the "gas tax holiday" would repeal the 18.4-cent federal gasoline tax during the busy summer driving season. Let's do the numbers: The Gas Tax Holiday lasts 3 months A family drives average 2000 miles/month In a gas-guzzler that gets 16 miles/gallon The family saves $69 That is not a lot of money. Not when a barrel of oil already costs $120 and could skip higher at any time. This absurd idea is a band-aid of the ugliest kind. It seems to embody vote pandering at the most basic level:
"The family saves $69" Actually, if I'm reading that article right, they save less than that. If the tax is dropped that won't mean the gas producers have to charge less. They could charge the same amount and simply make more profit. In fact, that may be what they have to do, since as the article states, "Gas is always in very short supply during the summer, which is why prices go up. In order to reduce the price, you would have to increase supply, but that is difficult over the short term, because the refineries cannot add capacity."
Very true. $69 is the best-case-scenario. Obama has also suggested that the oil companies would eat up most of that money.
Check out this great piece of supporting evidence from Bloomberg.
By temporarily lifting the gas tax, demand would increase. Increased demand with a limited supply will raise prices. The price would likely bounce right back to where it would be with the gas tax, resulting in even higher profits for the oil companies. So people wouldn't see the savings they are hoping for and the government would lose out on the much needed tax revenue.
A gas tax holiday is really no different than the stimulus checks. It's cutting governmental revenue in favor of a short term itty-bitty reprieve that will have much more damaging consequences down the line.
What some people (namely, most of the world's population) don't realize is that the price of gasoline has almost nothing to do with what wars or political tensions exist within the countries involved--there are always sneaky, economical ways around these problems. Rising prices have to do with refineries and the fact that they USE these tensions as seemingly viable excuses to ask for higher prices. THIS is the root of the problem. Besides, the government is obviously going to add additional "fees" to regular taxes to make up for money lost during these three months. NOTHING is free these days.
Simple economics can tell you why the gas tax holiday is a bad idea. When prices fall, quantity demanded will increase. With higher demand, consumers will bid the price of gas up faster than they would with the gas tax under effect. Then the gas tax comes back, and prices are higher than they would have been if the tax holiday didn't happen. Plus it's entirely possible for the oil companies to not pass on the savings to consumers, since the tax is on producers. Plus the government is already in trillions of dollars of debt, so lowering taxes is the sort of thing we ought to do with great consideration.
How about breaking our dependency on foreign oil and sincere consideration of alternative energy sources. A "gas tax holiday" would be just another set of blinders for the American people to throw on and play make-believe with. Everything is going to be 'OK. Everything is going to be 'OK. Everything is going to be 'OK.
That's no way to cure this serious problem. It's an irresponsible Idea, and this just goes to show that Obama has his shit straight. Don't play the "I'll reward you with cheap fuel if I'm elected". Tell'em straight up, 'You are all in trouble and continuing the problem will not solve a thing, if not worsen the whole ordeal'. People have to change their lifestyles, that's the only way to end this issue. People don't want to, they have to, now grow some f'ing balls and DO IT.
Word up, Bradford! It's an irresponsible Idea, and this just goes to show that Obama has his shit straight. Hallelujah!
I agree and think a boycott would be the best way to get America's message across to OPEC. DON'T DRIVE ON SUNDAY MAY 18th!!
OPEC doesn't care if we don't drive. The commodities market will still be open and people will still be buying their oil. If everyone pledged to not buy gas instead of not driving, then the price of oil would dip slightly, and US companies might not make quite as much money as they would otherwise. OPEC wouldn't see too much of a difference though.
Good point. One day of banning gas purchases won't have a bit of an effect on the global demand for oil. Fact is, the day after the ban everyone will need to fill up and the natural supply and demand forces will balance. The true issue is that demand is far outstripping supply, which will continue to put upward pressure on prices for the forseeable future until we can find alternative sources of energy that are economical, environmentally sound, and actually work.
Get a bike. I bought one a few weeks ago and now I am thinking about selling my car. ;^) Boycotting fuel and the use of automobiles for a day is a petty message. You have to strike culture at it's heart, so people want to join you, rather than leave them feeling obligated to do so.
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