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Tilting at Windmills

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April 29, 2008
By: Kevin Drum

GAS TAX DEMAGOGUERY....Yesterday was one of the more depressing days I've spent in a long time. The Jeremiah Wright dustup was the main reason, but there were others too. Like this bit of fantastical pandering from Hillary Clinton:

Senator Hillary Rodham Clinton lined up with Senator John McCain, the presumptive Republican nominee for president, in endorsing a plan to suspend the federal excise tax on gasoline, 18.4 cents a gallon, for the summer travel season. But Senator Barack Obama, Mrs. Clinton's Democratic rival, spoke out firmly against the proposal, saying it would save consumers little and do nothing to curtail oil consumption and imports.

While Mr. Obama's view is shared by environmentalists and many independent energy analysts, his position allowed Mrs. Clinton to draw a contrast with her opponent in appealing to the hard-hit middle-class families and older Americans who have proven to be the bedrock of her support. She has accused Mr. Obama of being out of touch with ordinary Americans who are struggling to meet their mortgages and gas up their cars and trucks.

I'd say there's approximately a zero percent chance that Hillary Clinton or John McCain actually believe this is good policy. It would increase oil company profits, it would make hardly a dent in the price of gasoline, it would encourage more summertime driving, and it would deprive states of money for transit projects. Their staff economists know this perfectly well, and so do they.

But they don't care. It's a way to engage in some good, healthy demagoguery, and if there's anything that the past couple of months have reinforced, it's the notion that demagoguery sells. Boy does it sell.

Kevin Drum 12:20 PM Permalink | Trackbacks | Comments (51)

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Comments

Good for Obama.

I expect the media to complete fuck this one up too.

Posted by: Chris M on April 29, 2008 at 12:24 PM | PERMALINK

What makes you think that McCain doesn't think that a gas tax suspension is good policy? It's right there in your list:

It would increase oil company profits...

I mean, you can just stop right there. The policy practically sells itself, the benefits are so self-evident!

Posted by: ResumeMan on April 29, 2008 at 12:25 PM | PERMALINK

I drive a lot, about 30 miles each way to work and back, and this "gas tax holiday" would net me $6.50 a month! Wow! Sign me up!

I prefer Obama, but I don't have a problem with Hillary staying in the race, and I've always said I'd be happy to vote for her if she were the nominee. I'd still vote for her (I mean, what are the options?), but it's crap like this that really gets my blood boiling. Not only is she pandering, she propping up a proposal of the GOP nominee. It's not the first time she's pimped up McCain.

What is she thinking?

Posted by: MeLoseBrain? on April 29, 2008 at 12:30 PM | PERMALINK

Just like you I was in a very bad mood yesterday, for precisely the same reasons as you. I've now come to the conclusion that HRC is a pandering POS, and if nominated I will vote to vote "NONE OF THE ABOVE" come November. Along come polls which claim it's working (pandering). At this point I don't see any hope for the country.

Posted by: bigTom on April 29, 2008 at 12:31 PM | PERMALINK

John and Hillary are "leaders" who make use of popular prejudices and false claims and promises in order to gain power.

Obama's a true leader who believes in telling voters the truth.

The masses are fools to fall for the gastax cut crap.

Posted by: Tom Nicholson on April 29, 2008 at 12:33 PM | PERMALINK

it would make hardly a dent in the price of gasoline, it would encourage more summertime driving,

These two arguments seem mutually exclusive to me. If suspending gas taxes won't make a dent in the price of gas, how would it create an incentive to drive more?

Posted by: Quaker in a Basement on April 29, 2008 at 12:33 PM | PERMALINK

She's thinking that the media won't report on how terrible the policy is, but the fact that Obama is out of touch with the needs of working people. She knows that once the media is invested in a narrative, they are loathed to break loose of it.

Posted by: Keith on April 29, 2008 at 12:33 PM | PERMALINK

If current demagoguery has you depressed you better stay away from guns and razors for the next few months. This is going to be a very ugly campaign. Very.

Posted by: steve duncan on April 29, 2008 at 12:34 PM | PERMALINK

Do the math.

Average car miles driven year ~ 20,000.
Average miles per gallon ~ 15.
Gallons purchased per year ~ 1333.
Fed Tax per gallon ~ 18 cents.

Amount saved by removing tax ~ $240/yr.

Amount of additional profit by the oil companies after raising price of gasoline another 18 cents
~ Hundreds of Billions !!!

Amount of deficit from the national infrastructure by removing the tax
~ Hundreds of Billions !!!

What a great idea. NOT!

Posted by: Jay in Oregon on April 29, 2008 at 12:35 PM | PERMALINK

a gas tax holiday is great policy, especially if you like crumbling roads and unemployed construction workers...mccain has an excuse: he's a republican and admittedly knows nothing about the economy. hillary should know better.

Posted by: mudwall jackson on April 29, 2008 at 12:35 PM | PERMALINK

new dkos diary from me today, on anti-Obama criticism and Fox News

Posted by: Swan on April 29, 2008 at 12:36 PM | PERMALINK

I realize that our schools are bad, but do Clinton and McCain really think that people can't subtract 18 cents from 4 dollars and realize that they'd be paying "only" $3.80 a gallon instead of $4? And that they'll think that 20-cent savings is so amazing that they'll clamor for it?

How stupid do they think Americans are?

Posted by: Mnemosyne on April 29, 2008 at 12:41 PM | PERMALINK

On the theory that we get the government that we deserve, maybe G W Bush hasn't f*cked things up enough for "ordinary Americans" to get a clue about what is important in campaigning and in governance. I would include the media too, but they are to fubar'ed to have any hope.

So maybe we really do need to elect another Peter Principle president whose only claim to the job is that she/he was able to drive up the negatives of any opponents.

Maybe we really do need another totally catastrophic turn of events (a la 1929 on) to wake up the now largely stupefied ordinary American to the need of real progressive change.

Posted by: Keith G on April 29, 2008 at 12:45 PM | PERMALINK

and it would deprive states of money for transit projects.

Er, no. Hillary's plan is to fund the gas-tax holiday by imposing a tax on the oil companies' windfall profits:

http://tinyurl.com/3jtlfp

Posted by: Swift Loris on April 29, 2008 at 12:46 PM | PERMALINK

Yes, this is just about as stupid as HRC's 5-year interest rate freeze idea. If anything, what we should be doing is raising the fuel tax and use that to HIRE some more people to fix the roads and bridges. I've noticed a lot of extra potholes going unrepaired lately. Probably, the next thing they (HRC and McCain) will hatch up are $20 Federal scratch-off lotto tickets that only poor people who don't vote will be stupid enough to buy. Then they will take that money and use it for extra ethanol subsidies.

Posted by: Doc at the Radar Station on April 29, 2008 at 12:49 PM | PERMALINK

I notice that our Fearless Leader® is pressing for drilling in the arctic again, as a "solution" to our energy problems.

Once again, even if this were approved tomorrow, the additional oil would not flow to refineries for years. With the huge tax breaks for the oil companies, they wouldn't even begin to pay any royalties to the federal government for, like, ever...

We need an energy program to be run like the Apollo program -- commit all resources necessary to become much less dependent on oil, especially imported oil, within 10 years (or less).

Oh wait, we don't have the money right now. It's all going toward the GWOT®.

My bad...

Posted by: Ranger Jay on April 29, 2008 at 12:52 PM | PERMALINK

I don't think McCain knows much of anything, other than how much Viagra he has left in his little brown pill bottle. Hillary is just turning into the lowest form of pandering slime since, well, Mitt Romney (McCain's running mate - count on it).

If we had the least bit of common sense as a nation, the gas tax should be quadrupled and the resulting tax revenue diverted to developing alternative (i.e. green) energy sources.

Posted by: The Conservative Deflator on April 29, 2008 at 12:54 PM | PERMALINK

Yesterday was one of the more depressing days I've spent in a long time. The Jeremiah Wright dustup was the main reason

I'd like to see any evidence that the "dustup" is on anyone's radar outside the fucking beltway.

The only thing that's changed is that the chattering classes managed to agree that Wright "is a problem for Obama," if only because they say so.
.

Posted by: Grand Moff Texan on April 29, 2008 at 12:55 PM | PERMALINK

". . . but they don't care. It's a way to engage in some good, healthy demagoguery, . . "

Of course, they don't care - they really only CARE about how deep their personal pockets are, how they can appear to be "in touch" with the middle class and make Obama look like an elitist (the craziest thing possible to imagine) and screw the American citizen. God, I can't take much more of this because when I see how people "literally believe" this crap, I just can't wrap my brain around it. Does anyone out there have an answer for me about how people can ACTUALLY BELIEVE McCain or HRC (how "trustworthy" after being caught red-handed in LIES over Boznia) and not understand that these two candidates are just USING AND ABUSING them to get their all important vote.

Posted by: ObamasLady on April 29, 2008 at 1:02 PM | PERMALINK

Clinton only said she supported it if A, B and C happened which she knew would not happen. It was just good politics. It is Obama that doesn't seem to know how to manipulate the language to appeal to more people.

Posted by: Erin on April 29, 2008 at 1:02 PM | PERMALINK

Funny how people misunderstand hyperbole. When someone is called a f------g w---e, it doesn’t mean they are literally a prostitute, rather that metaphorically there is nothing they won’t say or do.

Posted by: fafner1 on April 29, 2008 at 1:08 PM | PERMALINK

depressing

I find the Rev. Wright's message uplifting and a reason for optimism. Few leaders are able to express the truth like he does. What is depressing though, are the fears of so many Democratic moderates who think what the Rev. Wright says will affect the voting of other moderate Americans. The plain truth is moderates must think many White Americans have an underlying racial prejudice that is activated by the forthright pronouncements of ethnic religious leaders like Rev. Wright and Louis Farrakhan.

Moderates need to accept the response centuries and generations of slavery and racial discrimination have created among the more enlightened victims of it. The fear of racist influence in American politics cannot be overcome by hiding from the liberation philosophy those racists have elicited from their victims.

Posted by: Brojo on April 29, 2008 at 1:14 PM | PERMALINK

I am glad you see that an 18.4 cent gas price reduction is small compared to the total price and proposing such a reduction by government fiat is pure demagoguery.

I would like to point out that most oil companies have a profit on a wholesale gallon of gas that is also about 18-20 cents. The reason they make so much money is that they sell a lot of gallons of gas (plus many other petroleum products). So is it pure demagoguery to blame oil company profits for the price of gas, or to suggest government schemes (e.g. windfall profits tax) to reduce these profits?

Posted by: coyote on April 29, 2008 at 1:18 PM | PERMALINK

I agree with Quaker in a Basement.

This post is a typical knee jerk response without much thought.

When gas is at $4.00 a gallon, do you think an 18 cent gas tax will change anybody's driving habits?

And how is this 18 cent gas tax affecting oil companies profits? When there is a sales tax increase, does anybody cut their prices? No.

A gas tax is a regressive tax. Since gas prices are high enough to provide their own deterrent, we should get rid of it.

But I guess I'm pandering as well.

Posted by: DR on April 29, 2008 at 1:19 PM | PERMALINK

Of course if another bridge drops into the Mississippi River or some other reason for a bridge, ordinary Americans can cheer Senators Clinton & McCain for their concern for the financial welfare of their deceased next of kin.

Posted by: Ray Waldren on April 29, 2008 at 1:29 PM | PERMALINK
A gas tax is a regressive tax. Since gas prices are high enough to provide their own deterrent, we should get rid of it.

Gas prices are demonstrably not high-enough to provide their own deterrent (which is expected, prices only reflect current direct costs, not future or social costs [much less future social costs] unless taxes are leveied to internalize those externalities); they also have regressive effect. It seems to me it makes more sense to increase gas taxes and offset some of the costs to the less well off by both reducing general taxes on them, increasing public expenditure on subsidized alternatives to using gas aimed at providing alternatives for them, and similar mitigation measures that simultaneously address the needs of the less well off while serving the same public purpose as the gas tax, that is, reducing the present and future social costs associated with gasoline use by reducing gasoline use.

Posted by: cmdicely on April 29, 2008 at 1:36 PM | PERMALINK

Kevin,
Why is Clinton pandering and Obama not? Couldn't it be reasonably inferred that he's pandering to environmentalists by his position?

It's an election year for Chrissakes - all the candidates are fighting and positioning for votes, yet you choose to tag Clinton with that pejorative term for seeking votes. The RNC must be proud of your work, since you seem to be spinning right along with the their script.

Disclaimer: I don't know which Democrat I will vote for in November, and I voted for Obama in the primary.

Posted by: dick tuck on April 29, 2008 at 1:41 PM | PERMALINK

Ray Waldren -

If not for the virtue of timing, it could have happened in Kansas City in 2003. The Paseo Bridge, over the Missouri, was closed for emergency repairs after an 11-inch pin corroded by pigeon poop froze in place for decades, and the pivot-point it was supposed to provide wasn't pivoting, and a plate cracked, dropping the bridge platform several inches. It happened at 3:00 a.m. so traffic was light, but if it had been during rush hour, it could have been as tragic as what happened in Minneapolis.

Somewhere in this country a bridge collapses every single week.

Posted by: Blue Girl, Red State on April 29, 2008 at 1:48 PM | PERMALINK

If we want to reduce gas consumption, or at least encourage conservation, while helping reduce greenhouse gases and pollution, howzabout eliminating the SUV exemption from the gas guzzler tax—currently not applicable to vehicles over 6,000 lbs.? And while we're at it, howzabout also getting rid of the $25,000 tax deduction for vehicles over 6,000 lbs.—we're still subsidizing those Lincoln Navigators*.

*The deduction prior to 2003 was $25,000, e.g., a real estate broker could deduct up to $25,000 of the cost of a new Hummer. In 2003, the Republican Congress, ever ready to pander to wealth, raised the deduction cap to $100,000, making the entire cost of a $100k Hummer totally subsidized by taxpayers. (Thanks, suckers!) There was such a stink raised over this that even the Gooper congress had to restore the deduction to $25,000 in 2004, although with depreciation bonuses it's actually much more than that. Last I heard, The Renewable Energy and Energy Conservation Tax Act of 2008, which would eliminate this deduction entirely, passed the House strictly on party lines, and has stalled in the Senate, opposed by guess who.

Posted by: R. Porrofatto on April 29, 2008 at 1:52 PM | PERMALINK

Anyone who wants a good scare should go look at our infrastructure report card.

Posted by: Blue Girl, Red State on April 29, 2008 at 1:55 PM | PERMALINK

I'd say there's approximately a zero percent chance that...John McCain actually believe[s] this is good policy.

Please stop parroting the vile Richard Cohen. Thanks in advance.

Posted by: ed on April 29, 2008 at 2:01 PM | PERMALINK

I agree with Quaker in a Basement.

Can someone tell me how to work up a keyboard macro to make this phrase easier to type? I'm certain people would use it much more if only it didn't cost them so many keystrokes!

Posted by: Quaker in a Basement on April 29, 2008 at 2:04 PM | PERMALINK

Mnemosyne.

I realize that our schools are bad, but do Clinton and McCain really think that people can't subtract 18 cents from 4 dollars and realize that they'd be paying "only" $3.80 a gallon instead of $4? And that they'll think that 20-cent savings is so amazing that they'll clamor for it?

Minnesota Republicans think we are pretty stupid. They are airing a campaign that basically says "You know why you pay so much for gas? Minnesota Democrats raised the gas tax a whopping 48%!"

Typical Republican lie. MN Democrats raised the current MN gas tax from 20 cents to 22 cents a gallon, and over the next five years will increase that to 28.5 cents a gallon.

Yes they raised the MN gas tax 48% over FIVE years, and that amounts to 2 cents this year.

Republicans are hoping people see the price of gas jumped 50 cents since the 2 cent tax increase and will blame it all on the Democrats.

Republicans tried to get this shown on the TV sets at Gas stations but for some reason the gas stations didn't want to remind people how much the price of gas has risen.

Posted by: Tripp on April 29, 2008 at 2:14 PM | PERMALINK

@R. Porrofatto: The fact that someone could deduct the entire cost of some expense from their taxable income does not make it totally subsidized by taxpayers; It makes it subsidized to the extent that thier total tax liability is decreased. Which is, even for the fabulously wealthy real estate agent, is not going to be more than 50% of the actual cost. But either way, a real estate agent who is spending $100k on a motor vehicle is almost certainly paying substantially more in taxes than they are recieving in services from the government, so "subsidized" is hardly the correct word.

None of that is to say that I am particularly impressed with the value of the service said agents provide relative to the fees they incur.

Posted by: Matt on April 29, 2008 at 2:19 PM | PERMALINK
If suspending gas taxes won't make a dent in the price of gas, how would it create an incentive to drive more?

The dent will be small - even if gas suppliers make no price adjustment to capture the difference, it would be 5% at $3.60/gal. It seems to be assumed that the suppliers will try to capture some of that which would obviously reduce the savings to customers.
But you have to remember that we're dealing with people here. Price goes down and people will drive more. Especially during the summer vacation season.
It's kind of like the Sales Tax holiday in MA - once you know you'll save $5.00 per $100, you go out and buy something expensive that you wouldn't have bought otherwise. "We can't really afford it, but we saved $80.00!" Um, no. You spent $1600 more than $0, which means you have a negative savings of $1600.
"No taxes on gas today! Woo-hoo! Let's go to the beach!"
And thus people buy more gas than they would otherwise. Increasing demand which in turn would cause increased prices, and then all of the sudden, prices are higher than they were before the tax was removed.
Then summer ends and the tax comes back, causing a 20 cent jump in a day.

Posted by: kenga on April 29, 2008 at 2:41 PM | PERMALINK

Dropping the tax won't impact on truckers' use of diesel gasoline. Cheaper gas won't mean that more materials will be shipped. If it were passed along to consumers in terms of the prices of the goods on the trucks, it'll give areduction of about 4 percent.

It will have some impact on users of regular gas and all the tertiary users. More trsvel means a better summer for the travel industry.

The biggest impact is the additional profits for Big Oil. In which case, the pressure for holding back on the gas tax should be used to push for a BIG tax increase on excess profits, with the bilions the oil companies are raking in used SPECIFICALLY to fund infrastructure repairs.

After all, if the roads are bad, people won't buy gas to travel on them. A tax on oil company profits to fix the roads is in the oil companies' own self interest, and it should be sold that way.

Posted by: Lew Wolkoff on April 29, 2008 at 3:13 PM | PERMALINK

Speculators will just drive the price up to make up the difference in price after the tax is suspended.

Posted by: Pocket Rocket on April 29, 2008 at 3:41 PM | PERMALINK

"Why is Clinton pandering and Obama not?"

Because her position makes no sense and his does.

"Couldn't it be reasonably inferred that he's pandering to environmentalists by his position?"

No.

Posted by: PaulB on April 29, 2008 at 4:21 PM | PERMALINK

Why aren't the Republicans being taken to task for the rising gas prices??????!!!!!! After all, gas was $1.69 a gallon when Bush took office. When have gas prices gone this high in 8 years ever?

Posted by: Mazurka on April 29, 2008 at 6:10 PM | PERMALINK

Badly worded on my part. I meant that in 2003 the total cost was deductible. However...

But either way, a real estate agent who is spending $100k on a motor vehicle is almost certainly paying substantially more in taxes than they are recieving in services from the government, so "subsidized" is hardly the correct word.

If a purchaser of a $100k luxury vehicle has the advantage of owning it for, say, $50k, only because it is over 6,000 lbs., with $50k of that purchase subtracted from an overall tax liability which would be owed otherwise, I'd say that subsidized is exactly the correct word to apply, and I'm sure that a similar purchaser whose vehicle was under 6,000 lbs. and for whom the purchase price was not deductible would agree, regardless of other taxes paid or the quantity of services received from the government by the beneficiary.

Posted by: R. Porrofatto on April 29, 2008 at 7:01 PM | PERMALINK

So if this is demagoguery and shameless pandering on the part of McCain, what does Obama's support for ethanol say about him? McCain went to Iowa and told them he doesn't support their little environmentally disasterous boondoggle. I don't recall the same response from Obama. The perennial ethanol subsidies have a much greater detrimental impact than a one day tax free blip on the radar.

Unfortunately it doesn't follow the "Barack is King Midas" perspective.

Posted by: Tommer on April 30, 2008 at 7:19 AM | PERMALINK

As badly as the gas tax (and just about all other fed taxes) are misused, at least it has the virtue of being a consumption tax and so legitimately within the framework of the Founders' Constitution.

Of course, none of those campaigning for the presidency want to do anything substantive and sensible about fuel prices; that would mean doing something substantive and sensible about energy policy as a whole.

Posted by: David on May 1, 2008 at 8:25 AM | PERMALINK

in the second paragraph of section 2 of the article you forget to make "complete-completely" in the sentence "the media is going to completely fuck this one up too".

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