Voting Pocketbook Issues: The Gas Tax
Clinton proposes to pay for the tax cut -- which might save 5-6 percent for every fill-up -- with a surcharge on oil industry profits. Given record profits (long before crude went up to $120/barrel), that doesn't seem unreasonable. And at least she is thinking about the ramifications of a tax cut.
Sen. Obama, on the other hand, rejects any reduction, one assumes, as symbolic (more polite than pandering).
When did the Democrats become the party of fiscal balance?
I am sympathetic to the increased gas prices. Really. I drive, too, (a truck) and ride motorcycles.
Moreover, the Bureau of Labor Statistics reported in 2004 that transportation was the number two expenditure for the average American (18 percent, compared to 32 percent on housing). The Bureau of Transportation Statistics reports that in 2004 it cost on average $7,448 a year ($0.56 per mile) to own and operate a motor vehicle. And most of us have two or more.
This summary explains the McCain and Clinton proposals.
Moreover, these data from the Clinton campaign sound tragic:
[W]hile the average [N.C.] family's energy costs have gone up $2,000 a year since President Bush took office, average North Carolina family incomes have fallen by almost $5,000.
Don't know about you, but I don't believe that average household energy costs anywhere in this country have increased $2K each year for seven years! Show me that data source. (I am quite willing to believe that average family real income may have dropped.)
And I have little sympathy for the choices made by many in my native south: trucks, trucks and more trucks. Not little Rangers but Suburbans and F350 4x4s and Hummers. And no, most of the people aren't carting around tools or horses or farm equipment; they're carting kids and groceries.
The increase in the price of gas is painful but inevitable. To those who say consumers are not responding to increased gas prices, I say, look at this: car and truck sales "dropped 2.5% overall in 2007 to their lowest annual level in over a decade." And they dropped some more in March:
General Motors Corp.'s (GM, Fortune 500) U.S. sales fell 19%, Ford's sales dropped 14% and even industry stalwart Toyota was down 10% compared with last March, according to figures released Tuesday. Chrysler dropped 19%, Nissan fell 4% and Honda reported a 3% drop. Some automakers warned things could continue to worsen in the near term.
Econobrowser reports that the big hurt is in light truck sales, which include "the increasingly less trendy sport-utility vehicles. March sales of domestically manufactured light trucks were down 18.3% relative to March 2007."
The growth, not surprisingly, is in vehicles that get good gas mileage, like hybrids (and possibly scooters and motorcycles).
Why should we pervert the market (increasing prices reduce demand) by artificial price reductions in gasoline -- especially when the state of our infrastructure suggests the gas tax should go up, not down?
From around the web: Gas tax holiday a bad idea no matter who's pushing it and Gas Tax Holiday Won’t Help You…Much, Obama says