Kevin Drum has made me feel guilty about not covering the “gas-tax holiday” flap in greater detail. There’s an actual substantive policy issue here that sheds lights on the differences between the presidential candidates, so let’s give it a full airing.
Americans, you may have noticed, are freaking out about gasoline prices, which are rising due to various structural issues that are unlikely to go away anytime soon. That’s a difficult issue for a politician to avoid in an election year, so John McCain proposed suspending the federal excise tax on gasoline, 18.4 cents per gallon, during the summer driving season, as a sop to drivers.
This is an unbelievably bad idea. It’s so bad, in fact, that intrepid journalists have been unable to find a single expert, from any part of the political spectrum, willing to speak up in its favor.
The best take-down of the proposal comes from Tom Friedman, who notes that the policy amounts to borrowing money from China (in the form of an increased deficit) and shipping it to Saudi Arabia (by boosting oil purchases). A much longer take-down comes from Jonathan Alter at Newsweek. To summarize:
* A gas-tax holiday would fail to provide relief to consumers. Not only are the sums at stake piddling, but the windfall would likely go to oil companies, not drivers.
* A gas-tax holiday is environmentally irresponsible. Providing inducements to drive is exactly what we don’t want to be doing right now. (Although, to be fair, the basic uselessness of the tax break is such that it won’t really affect gas consumption one way or the other. Not sure this is a selling point, though.)
* As gas-tax holiday is fiscally irresponsible. The federal excise tax on gasoline is used to fund improvements in our crumbling highway infrastructure.
* A gas-tax holiday is shortsighted. Gas prices are going to keep going up, and up, and up. Insofar as high fuel costs are a problem, solutions need to be long-term and structural.
The plan was such a howler that Hillary Clinton decided to do the obvious thing: announce that she too supports a gas-tax holiday, thus making Obama the sole presidential candidate to opt out of this shameless pander. In fact, he’s now running an ad on the issue.
Of course, Obama isn’t spotless. He is running for president, after all, and his ad features mini-panders, such as a promise to investigate “price gouging” by oil companies. But this is minor stuff compared to the gas-tax holiday. Good for Obama.
Contextual note 1: years ago, in a crass ploy to appeal to voters alarmed by gas prices that had reached $1.50 a gallon, a presidential contender proposed releasing oil from the strategic petroleum reserve. I speak, of course, of Al Gore during the 2000 election. Politicians do this stuff during elections because it gets votes. McCain and Clinton will probably both reap a benefit from the issue, and Obama, sadly, will not.
Contextual note 2: Tim Kaine, the Democratic governor of Virginia, just proposed a gas tax increase to cover a budget shortfall. So some politicians do get it. Of course, Tim Kaine isn’t up for re-election, and he never will be: term limits mean this will be his last stint as governor. Still, good for Tim Kaine.