Sen. John McCain delivers an economic speech during a campaign event at Carnegie Mellon University, Tuesday, April 15, 2008, in Pittsburgh. (AP Photo/Mary Altaffer)
by Frank James
One of the big ideas out of Sen. John McCain's Carnegie-Mellon University speech today was his idea for a tax holiday from the 18.4 cents federal gas tax for essentially the entire summer driving season.
It's a great populist notion. Who doesn't want to pay lower prices at the pump, especially with gas prices hovering near $4 a gallon in some places?
But there are obvious problems. For instance, what would stop gas retailers from just hiking their prices to capture the savings?
And if the gas-tax holiday led consumers to drive more, the entire benefit of suspending the gas tax could easily be lost to the price pressures that would come from higher demand.
The gas tax also funds the highway trust fund which pays for the building and repair of interstate highways and bridges. Given the aging state of the nation's infrastructure, it wouldn't seem like the best time to reduce the funds available for road projects.
Then there's the pressure that comes from global oil prices, which crossed the $114 a barrel threshold today. Such upward pressures would likely erase any relief afforded by a gas tax holiday.
The Wall Street Journal's Washington Wire blog has a useful posting by Stephen Powers on what generally happens to Washington proposals for gas-tax holidays. In short, they go nowhere, evaporating like gas vapors on a summer day.
The gas tax holiday was just part of the plan McCain outlined in a speech today whose intent was to say to the voters "Message: I care," to quote former President George H.W. Bush.
Here's the McCain campaign's fact sheet on its candidate's proposals.
Today, In Pennsylvania, John McCain Outlined A Comprehensive Pro-Growth Strategy That Includes Several New Initiatives. Included in this plan are several new initiatives to help Americans confront economic challenges while focusing government on actually helping families.
The New Initiatives:
GAS PRICES: John McCain Believes We Should Institute A Summer Gas Tax Holiday. Hard-working American families are suffering from higher gasoline prices. John McCain calls on Congress to suspend the 18.4 cent federal gas tax and 24.4 cent diesel tax from Memorial Day to Labor Day.
STUDENT LOANS: John McCain Is Proposing A Student Loan Continuity Plan. Students face the possibility that the credit crunch will disrupt loans for the fall semester. John McCain calls on the federal government and the 50 governors to anticipate problems and expand the lender-of-last resort capabilities for each state's guarantee agency.
MIDDLE CLASS TAX CUTS: John McCain Will Double The Personal Exemption For Dependents. John McCain believes the tax code should be less of a burden on those, whether they are mothers and fathers or single parents, who are trying to raise a family. He proposes to raise the personal exemption for each dependent from $3,500 to $7,000.
A SIMPLER TAX CODE: John McCain Will Propose An Alternative New And Simpler Tax System -- And Give America A Real Choice. When this reform is enacted, all who wish to stay under the current system could still do so, but everyone else could choose a vastly less complicated system with two tax rates and a generous standard deduction. Americans do not resent paying their rightful share of taxes -- what they do resent is being subjected to thousands of pages of needless and often irrational rules and demands from the IRS.
GOVERNMENT SPENDING: John McCain Proposes A One-Year Spending Pause To Evaluate Programs. He believes that outside of essential military and veterans programs there should be a one-year discretionary spending pause that should be used for a top-to-bottom review of the effectiveness of federal programs.
MEDICARE GROWTH: John McCain Believes That We Should Not Subsidize The Prescription Drugs Of America's Most Affluent Individuals. He will propose reforms to reduce the large subsidies in the Medicare drug program.
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Comments
Isn't it funny how Rank James frames every republican idea negatively with his headlines? Suspending the gas tax is "vaporous." Gotcha, Rank.
What would stop retailers from hiking the price would be the windfall that the ones who don't would capture. But Rank doesn't understand how free markets work. He believes only in taxation. Rank could always do his job as a reporter, too, and investigate stations and companies that gouge, but that would cause him to get off his duff and do some actual work instead of just criticizing the one presidential candidate who wants to do something about these ridiculous gas prices.
Posted by: Jeff | April 15, 2008 3:59 PM
What seem very funny is that McBush has said the problem with the housing crisis was to a great deal speculators, yet never once mentioned that speculators in oil is a great deal of the problem with the cost of gas.
Posted by: bill "Hussein" r. | April 15, 2008 4:01 PM
"The issue of economics is not something I've understood as well as I should." - John McCain
Posted by: Paul | April 15, 2008 4:10 PM
McCain doesn't have a clue when it comes to the economy, he knows even less about the economy than he does about foreign policy.
McCain and Bush are one in the same on the economy. They've told us the economy is strong, we're just in a rough patch and we're not headed into a recession.
http://www.youtube.com/watch?v=WRV8Q9IBDxk&eurl=http://www.dailykos.com/
You want to talk about being an elitist?
McCain and his drug addict trust fund wife are worth more than both Dem Presidential candidates combined.
"The McCains' marriage has mixed business and politics from the beginning, according to an expansive review by the Associated Press of thousands of pages of campaign, personal finance, real estate and property records".
"As heiress to her father's stake in Hensley & Co. of Phoenix, Cindy McCain is an executive whose worth may exceed $100 million. Her beer earnings have afforded the GOP presidential nominee a wealthy lifestyle with a private jet and vacation homes at his disposal, and her connections helped him launch his political career -- even if the millions remain in her name alone".
"Nearly 30 years before John McCain became the Republican presidential nominee, he worked in public relations at his wife's family company".
"Within a few years of marrying Cindy Hensley, the daughter of a multimillionaire Anheuser-Busch distributor, John McCain won his first election. Personal money -- tens of thousands of dollars in loans to his campaign from McCain bank accounts -- helped him survive".
"McCain's fundraising base is now far broader than his family bank accounts and Hensley. Still, Hensley and Anheuser-Busch executives have been important and longtime supporters".
"Hensley executives are among the Arizona senator's top career givers. The Anheuser-Busch PAC has given McCain's campaigns at least $19,500 over the years".
"McCain's campaign still taps Hensley assets: His presidential campaign paid at least $227,000 last year to a limited liability company in which his wife and children are invested, King Aviation, for use of its private jet, according to campaign finance reports".
"McCain himself reports little more wealth than when he started in politics".
"With his book royalties and radio-appearance fees donated to charity, McCain's Senate salary of $169,300 and Navy pension of about $56,000 are his only significant sources of income".
"He has accounts at two banks with his wife worth up to $15,000 each, according to his most recent financial disclosure report".
"In contrast, Cindy McCain is a millionaire many times over -- though the McCains haven't disclosed just how many times".
"The reports show Cindy McCain has at least $9 million in assets on her own and at least $15 million with the McCain children. But those figures are virtually meaningless; her stake in Hensley & Co. almost certainly exceeds them by tens of millions of dollars".
"Beverage industry analysts estimate Hensley's value at more than $250 million and its annual sales at $300 million or more. Hensley is among the nation's biggest beer distributors".
http://www.detnews.com/apps/pbcs.dll/article?AID=/20080410/POLITICS01/804100314
Posted by: John E | April 15, 2008 4:13 PM
70% of Americans disapprove of President Bush's handling of the economy. God forbid that economic theorist John McCain get his hand in the tax payers pockets with his endless WAR and endless flip-flops. The Double Talk Express wants you...to go get killed in Iraq for Dick Cheney and his millionaire cronies.
Don't be fooled.
THE REAL McCAIN!!!
http://bravenewfilms.org/blog/577-escalation
He is an old dope. He cannot even keep Iran and Iraq straight-why? Because he does not understand foreign relations. How would he ever put a cabinet together and lead the free world?
http://bravenewfilms.org/blog/28073-less-jobs-more-wars
http://bravenewfilms.org/blog/575-47-second-flip-flop
John McCain is a joke, a sloppily construed aesthetic of a man that Corporate America has manufactured in hopes that the American public will rally around his facade. Some buy into it (like MJ below) and some don't. The simplest fact of the matter at hand is that personal good is relative (and easily manipulated), but collective good is the equilibrium we seek to realize by electing representatives. A person opting to represent others who brazenly declares that there will be more and more war -regardless of whether or not they are elected themselves- is not seeking the equilibrium of the collective good, but is campaigning to alter your perception of both personal- and collective good.
Posted by: McBu$h Family Value$ | April 15, 2008 4:16 PM
Yeah buddy lower the price of gas. That'll get people to stop driving 3 blocks to the store. The price of petroleum would not be as high as it is today if we used less plastics. Just think of how much petroleum is used to make 1 lb of plastic.
Posted by: susan whitehurst | April 15, 2008 4:24 PM
Hey Frank,
Have you noticed that everytime there's an article that might put McCain or the Republic Party in a bad light, the Wingnuts (Jeff) always start attacking the messenger (Frank James etc)?
The Wingers cry like a bunch of third grader school girls.
Posted by: John E | April 15, 2008 4:34 PM
Gas prices in the US are still much much lower than they are in, say, Europe. I'd argue they're still too low, as evidenced by the fact that people aren't switching to more efficient cars in droves and aren't altering their driving habits. Given all the negative externalities (environmental, geopolitical, etc), suspending gas taxes is the exact opposite of what needs to be done.
http://www.smargue.com/s/67a120d2dad949bfbeae1d014caad8f1/McCain%26%23039%3Bs_call_to_suspend_gas_taxes.html
Posted by: Mikhail U | April 15, 2008 4:56 PM
They don't call him "Pander-Bear" for nothin'!
Posted by: Kyle | April 15, 2008 5:36 PM
Frank, how do you feel about the idea? One would never be able to tell from your reporting. No one would be able to guess which Obama you support. I mean, candidate.
Posted by: Herbie H. | April 15, 2008 5:43 PM
Hey McCain, how bout you ADD $.25 to each gallon of gas to start paying for your stupid war.
The sad part is, is that I used to like the guy back when he was a maverick, nowadays he is looking more and more Bushy.
Jeffy, gasoline vaporizes, see, that is how it was put into the heading, not as a Republican smear.
Posted by: Xcellentform | April 15, 2008 6:09 PM