Tuesday, April 15, 2008

McCainenomics?

John McCain thinks we should take the summer off from taxes...well one tax specifically, gas-taxes.

Ok, that's not fair, the heart of McCain's economic plans are based on sweeping tax reform. I take specific umbrage with the idea of cutting gas taxes. Energy needs to get more expensive if the market is going to move to alternative fuels. Basic economics of supply and demand dictate that as the need for fuel grows and the price goes up the market will start looking for alternative sources of energy. It won't be a "green movement" just a simple reaction to market conditions. the government doing anything to reduce that cost only retards our nation getting away from burning fossil fuels.

1 comment:

Sean Turner said...

I have to disagree and say that McCain's summer off from gas tax is simply a political move. The gas tax is highly regressive in nature and removing it for the summer may actually increase gas prices. This results from firms increasing their price by the amount of the tax reduction and simply cashing in on a larger producer surplus. They may not increase prices by the full amount of the tax reduction but prices will not go down by the full amount. Oil companies will also have the excuse that prices went up due to increased demand from vacationers. McCain's solution is equivalent to a putting a band-aid on a compound fracture. It is simply ridiculous and an attempt at getting the votes from middle and lower class citizens. World demand for oil has increased tremendously leading to record high oil prices. There will never be an effective and efficient move towards alternative fuel sources till the auto and oil industries change their direction. They need to put a serious effort into alternative fuel development. Fuels made from crops are a joke and could never supply enough fuels efficiently to meet national demand. It is my best guess that alternative fuels will be developed to meet demand about 5 years before fossil fuels officially run out. Till that day comes; a politician's tax cut to alleviate high fuel prices may actually make them worse. If the government wants to see real moves they could offer the following, yet radical, offer: the first firm to develop a 100% clean burning and renewable alternative fuel that can meet the demands of the US will never have to pay income taxes ever again. This is way too radical an offer for today's standards, but there needs to be a genuine incentive to make a change before any change ever occurs.