Saturday, May 3, 2008

I've got Gas

Policythought is not the first blog to jump all over the gas-tax holiday fiasco. Senator McCain came up with this terrible idea, then Hillary Clinton supported it. I must say it has tremendous bumper-sticker appeal. Unfortunately, it won't provide any relief from high gas prices this summer. 

I am no economist (I use that phrase nearly every post), but I understand supply and demand. Gasoline prices are rising because world-wide demand for oil-based energy is rising. Prices rise because there is but a limited supply of oil/gas in the world, so as more people want/need it the commodity becomes more expensive. Eliminating the tax is a simplistic way of removing about 14 cents of cost from each gallon bought at the pump. But take that one step further and what happens is as gas gets cheaper demand goes up. As demand goes up the oil companies raise the prices for the commodity again, effectively wiping out any cost savings of the gas-tax holiday. By the way, if you don't believe me check this out. 

I am extremely disappointed in Senators McCain and Clinton for supporting such a measure, when what is required is raising taxes on oil-based energy products to drive consumers to green alternatives. Bumper-sticker policies like this one are election year gimmicks, and I thought these two senators were better than that. 

1 comment:

Rebecca said...

While I also see the short-sightedness of the gas-tax relief concept, the idea of raising taxes to drive people to green alternatives is not necessarily a fair proposition (yet).

I'm all for public transportation (I take the DC Metro to work every day), but what about the folks who live in rural communities? Aside from carpooling, technology is not really on their side--hybrids are expensive! For example, a Honda Civic starts at $15,010 while a Civic Hybrid starts at $22,600. And, until science/engineering can catch up, it seems like gasoline is sticking around for awhile (

What can our lawmakers do in the meantime? How can they help John/Jane Q. Public who's got to feed the family and get to work Monday through Friday? I wish I could post some great alternatives, but I'm not the only one standing here scratching my head.

Hillary and John's hearts are in the right place, but they're clearing leaping before looking, which will most likely lead to their getting run-over--political roadkill, if you will.