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View Full Version : McCain proposes break in gas taxes


atlaw4u
04-15-2008, 05:13 PM
The proposals would reduce gas prices and "help to spread relief across the American economy". (http://news.yahoo.com/s/ap/20080415/ap_on_el_pr/mccain_economy_9)

http://www.cleanmpg.com/photos/data/506/mccain.jpgLiz Sidoti - AP - April 15, 2008

John McCain called Tuesday for the federal government to free people from paying gasoline taxes this summer and ensure that college students can secure loans this fall, proposals aimed at stemming the public's pain now from the troubled economy.

In the longer-term, the certain Republican presidential nominee said he would double the tax exemption for dependent children and offer people the option of choosing a simpler tax system.

"We know from experience that no serious reform of the current tax code will come out of Congress, so now it is time to turn the decision over to the people," McCain said in a sweeping economic speech at Carnegie Mellon University a week before Pennsylvania's primaries.

To help people weather the downturn immediately, McCain urged Congress to institute a "gas-tax holiday" by suspending the 18.4 cent federal gas tax and 24.4 cent diesel tax from Memorial Day to Labor Day. He also renewed his call for the United States to stop adding to the Strategic Petroleum Reserve and thus lessen to some extent the worldwide demand for oil.
Combined, he said, the two proposals would reduce gas prices, which would have a trickle-down effect, and "help to spread relief across the American economy."

Addressing the feared fallout of the ongoing credit crunch, McCain also said the Education Department should work with the country's governors to make sure that each state's guarantee agency — nonprofits that traditionally back student loans issued by banks — has both the means and the manpower to be the lender-of-last-resort for student loans.

Lawmakers, students and financial experts are worried that the credit crisis might make it more difficult for students and their families to find loans. Nearly two dozen lenders have dropped out of the federally backed student loan program.

Students, McCain said, "should not be denied an education because the recklessness of others has made credit too hard to obtain."

Among other proposals, McCain said he would:

_Require more affluent people — couples making more than $160,000 — enrolled in Medicare to pay a higher premium for their prescription drugs than less-wealthy people.

_Raise the tax exemption for each dependent child from $3,500 to $7,000.

_Offer people the option of choosing a simpler tax system with two tax rates and a standard deduction instead of sticking with the current system.

_Suspend for one year all increases in discretionary spending for agencies other than those that cover the military and veterans while launching an expansive review of the effectiveness of federal programs...http://news.yahoo.com/s/ap/20080415/ap_on_el_pr/mccain_economy_9

mparrish
04-15-2008, 05:20 PM
Does anyone think this is a good idea? My first guess would be "no", but there is a wide diversity of opinion here.

My answer is, um, "no".

And feel free to provide all of the McCain bashing you want that always seems to accompany posts about Hillary, since they are both politicians willing to do and say anything to get elected. ;)

Earthling
04-15-2008, 05:50 PM
Dumbest idea I ever heard of.

As we start a new road/bridge construction season, the last thing we need is another pandering politician who wants to cut off funding for road work. What an idjit.

Harry

Aether glider
04-15-2008, 06:23 PM
Any tax decrease sounds good to me. Seems like all people care about anymore is a smooth commute to work and the govt giving them something for free.

Radio_tec
04-15-2008, 06:43 PM
Any tax decrease sounds good to me. Seems like all people care about anymore is a smooth commute to work and the govt giving them something for free.

Seems like we've got a lot of work ahead of us to maintain our transportation infrastructure and a gas tax is that famed pay as you go tax. The more gas you burn the more you use the roads the more wear and tear the roads will experience.

Another point to consider is people are starting to reduce their consumption. We've been using gasoline as if it were a limitless resource. We are now bumping up against the physical limitations of what's left of cheap and abundant light sweet crude oil. This means in order to stretch out what remains we'll have to use it conservatively while we adjust to a future of alternatives from oil.

I thought that's what conservative politicians do. Conserve government power, conserve, natural resources and conserve fundamental American values. If government regulation doesn't restrict demand than higher prices will have to restrict it instead.

Didn't that great American Supreme Court Justice Oliver Wendell Holmes say that taxes are the price we pay for civilization?

Elixer
04-15-2008, 06:53 PM
I never realized the gas tax was so low. 20cents a gallon is not much. If you drive 15,000 miles a year at 30mpg, that's 500 gallons of gas *$.20 = $100. So you're going to save the guy who drives 30mpg $100 and the guy who does 15mpg $200. NO! Gas taxes need to go up, not down. The only real way to wean America off of fuel is to increase gas prices. You can either do it with taxes and keep the money, or let demand outstrip supply and watch our money get poured into the Middle East. The only place where it might make sense is diesel fuel for truckers, but again, 24 cents is not much.

donee
04-15-2008, 07:07 PM
Hi All,

This is a dumb idea, because demand will rise, and the price will just come up based on what the supply side can provide. Instead of the US getting road taxes, the money will just go into private (and much of it overseas) hands.

Now if gas taxes are increased, people get jobs rebuilding bridges, and demand goes down too. Which keeps things moving along further out until alternatives can be found, and more of the money ends up in the US.

chief302
04-15-2008, 08:04 PM
The proposals would reduce gas prices and "help to spread relief across the American economy". (http://news.yahoo.com/s/ap/20080415/ap_on_el_pr/mccain_economy_9)

_Raise the tax exemption for each dependent child from $3,500 to $7,000.



I *can* get behind this, however.

fitmpg
04-15-2008, 08:22 PM
Foolish idea for a number of of reasons- Several addressed above. And McCain is indeed pandering for votes in the Fall.

roadrunner
04-15-2008, 08:47 PM
I prefer that taxes go up on fuel, not down. That should encourage less use of fuel, not more.
He just wants to get elected IMO.

Aether glider
04-15-2008, 08:54 PM
I prefer that taxes go up on fuel, not down. That should encourage less use of fuel, not more.
He just wants to get elected IMO.

So you want to run potentially run people out of business with more taxes? Until something better comes along, gas is what we've got. Anyway when suppliers have to pay more the cost just comes back to you in the long run. Taxing gas more isn't the answer. How bout a percentage go to R&D on FE rather than more taxes.

lamebums
04-15-2008, 09:09 PM
I fully support cutting taxes. Any and all gas taxes are hideously regressive, which puts even more strain on the middle and lower classes, since they still need to drive, and it pinches their pockets even more.

I know people are going to say the gas tax pays for roads--get the money from the rest of the budget. Cut spending elsewhere.

We spent 36 billion of federal funds last year maintaining our highways.

Compare in just the past year:
We spent 168 billion on Medicaid.
We spent 385 billion on Medicare.
We spend ~100 billion on the Iraq war each year on top of the regular defense spending.

We can cut spending. :)

ILAveo
04-15-2008, 09:53 PM
Academic economists who take notions of efficient tax policy seriously (google "Pigouvian Taxes") consistently estimate that US gasoline taxes are too low (ballpark of $1 low in the last article I read). It's not news that politicians care more about being elected than proposing effective policies. So much for straight talk, I guess.

lamebums
04-15-2008, 10:32 PM
Academic economists who take notions of efficient tax policy seriously (google "Pigouvian Taxes") consistently estimate that US gasoline taxes are too low (ballpark of $1 low in the last article I read). It's not news that politicians care more about being elected than proposing effective policies. So much for straight talk, I guess.

They might take it seriously, but they certainly don't care about the economic consequences. I don't get how people can seriously believe higher gas prices are going to help the situation. It will not lower demand any serious amount because people still need to drive to get places--it's simply in the way we've designed our entire society, and a tax isn't going to change that.

It's just going to pinch the wallets of the working classes even more.

The plutocrats in government get richer and the hardworking Americans get poorer. Then the plutocrats give handouts, and bamboozle the working class into believing they're getting gifts from the government, and that the government is somehow a friendly entity.

Unfortunately that's like giving a guy a beer keg, offering to fill it up for him...but not saying there's a hole in the keg.

Chuck
04-15-2008, 10:33 PM
Recently, the Texas Legislature seriously considered this very thing....with a good internal search here or with Google, someone will find me saying a break on gas taxes is a very, very bad idea. The general idea of a temporary tax break during a recession I will go along with, but the pump is a bad place to do it. As painful as gas prices are, at last I see a visible change to trimmer vehicles. At Live Green Plano, I experienced interest in fuel economy that I'd consider a wild dream a couple of years ago.

I'm a disenchanted GOP - voted for Reagan in the 76 primaries and Republican in every general election since then. I've seen McCain as wisely distancing himself from the excesses of the Bush administration, but this stand unfortunately brings legitimacy to Obama's charge a while back that he would be Dubya's 3rd term...I considered that an over-the-top remark but not his worst gaffe. Cheney must be smiling about this gas tax break proposal.

Pain at the Pump is the 2x4 that is getting Americans to get serious about energy, which long-term will improve their personal finances and the nation's economy - it's tough medicine. This kind of tax break is a morphine of sorts that will allow things to be more pleasant while our economy gets worse.

Told a few people I'm either vote McCain or not make a choice on President - can't quite vote Democrat. This proposal concerns me.

JusBringIt
04-15-2008, 10:39 PM
no no...god NO! bad bad...BAD IDEA! next thing you know our gas usage skyrockets, the price also skyrockets, then the taxes get added back on and its all going to the producers..bad..very bad...

mparrish
04-15-2008, 10:48 PM
All of those here who want to move away from gas to alternative fuels but refuse to penalize gas in order to do it remind me of Ned Flanders' parents on The Simpsons. They were "lousy Beatniks" despised by Ned for their refusal to do anything remotely resembling parenting. Their most quoted line was:

"You gotta help us man. We've tried nothing, and we're all out of ideas."

bomber991
04-15-2008, 10:55 PM
Does anyone think this is a good idea? My first guess would be "no", but there is a wide diversity of opinion here.

My answer is, um, "no".

And feel free to provide all of the McCain bashing you want that always seems to accompany posts about Hillary, since they are both politicians willing to do and say anything to get elected. ;)

This is how Republicans keep getting re-elected. They promise to make everything cheaper for us.

I remember reading about this "Fairtax" thing a while ago. Had something to do with completely getting rid of the income tax, and instead having something like a 30% federal sales tax on everything. The catch was that you get a $200 or $400 check in the mail every month to make up for it if you're lower income or not.

But wow, imagine a 38.25% sales tax in Texas.

Anyways, 18.4 cents off of gas ain't that much now. We're talking $3.408 instead of $3.592 for a gallon of premium here in the Austin area according to AAA Fuel prices. I mean wow, that's how much it was a month ago.

laurieaw
04-15-2008, 10:58 PM
i could use my favorite line.........

how do you tell if a politician is lying?






his/her lips are moving

bullwinkle428
04-15-2008, 11:20 PM
Great idea!! Let's encourage the use of MORE gas! Peak Oil isn't quite happening fast enough for me... :rolleyes:

300TTto545
04-16-2008, 05:45 AM
Terrrible idea. But remember - it is for a few months. Temporarily reducing consumption taxes during a recession is probably a good thing.

Gas tax should be well over a dollar. Probably should be $5 but I realize I am in the minority on that. All the 3 candidates (should be call them the little 3?) have proposed horrible ideas in one manner or another. Obama hands out money to everyone and will somehow cut taxes for the middle class. I suspect the other 2 would have proposed the same thing if they thought about it first.

No candidate has been serious about raising the cost of energy - but election season is probably the wrong time to do it. This year may be the wrong time to do it anyway.

Sorry - but the best taxes are regressive. We should tax consumption to encourage savings and conservation. That would help with our ridiculous level of overconsumption in this country. Help with the dollar, help the environment. Europe taxes everything but at least they go after consumption.

Texashchman
04-16-2008, 05:52 AM
Two words....BAD IDEA kevin

HCHCIN
04-16-2008, 07:53 AM
I've said it before, every politician should be required to take Economics 101.

Chuck
04-16-2008, 08:03 AM
I've said it before, every politician should be required to take Economics 101.They take BS 101 and 201 instead.

lamebums
04-16-2008, 08:18 AM
I've said it before, every politician should be required to take Economics 101.

As an economics major I can tell you that taxing the **** out of gas to the tune of $5 a gallon will lead to collapse. Truckers will riot and refuse to drive (or simply can't afford to drive). Suburbia will be abandoned in favor of crimeridden ghettos (or they will move out to farms where at least food can be grown locally). Murder and larceny will skyrocket as well as a general breakdown of order. Ever seen Oil Storm? That way.

Except in your example it's caused by the government instead of the Saudis.

Besides, can you afford $10/gallon gas? I can't. And I'll take up arms against anyone in government who seriously proposes it.

Chuck
04-16-2008, 08:38 AM
lamebums,

Many of our problems are adults acting like spoiled brats...trying to recall which Founding Father said "self-govenment without self-discipline won't work" ... Paul Harvey was fond of quoting it.

I've said in the past to raise the pump tax, but only if you proportionally reduce the income tax and exempt the truckers....Greenspan recently made a similar suggestion.

I favor a more limited government, but the adult kids are screwing it up, and there are plenty of examples in this administration.

HCHCIN
04-16-2008, 10:15 AM
Lamebums--

I don't want to get into a peeing contest, but higher gas taxes won't lead to collapse. Truckers may complain and the price of goods will increase, but only until we find substitutes for over the road transportation, which is something we need to move towards anyway. One needs only to look at the price spikes in oil in the 1970s as proof that we as a country can change our ways. We just happen to have short memories.

The demand for gasoline is pretty inelastic. But the real secret? So is supply. Cut the gas tax, the demand curve shifts out, and you will see demand for driving increase. But there isn't enough fuel in the pipeline right now to accommodate all of that demand. So prices will be bid back up to equilibrium anyway. And then what happens in the fall when we expect gas prices to decline again, but wait -- now we have to reinstate the gas tax. It's a zero-sum game. What's lost is four months of tax revenues to maintain roads.

The same thing happens when we widen highways. On a three-lane congested highway there's a certain segment of the market for driving that is priced out -- congestion is too high of a cost to commute, so some find alternatives (work from home, alternate hours, etc.). As soon as the road is widened to four lanes (33% increase in supply), the cost of commuting falls and MORE people commute. As a result, the new supply is immediately consumed. It's called induced demand. Anytime you shift the supply curve out you induce more consumption until the price is bid back up to equilibrium.

This induced demand is the problem with suspending the gas tax. It may pain you to hear it as a broke college student, but if anything, gas has historically been too cheap. We've subsidized it as the cost of encouraging commerce when oil was plentiful, and as a result we are now hopelessly tied to oil. Instead, we should have followed Europe's example and used higher taxes as a tool to encourage less driving, lower congestion and the sale of more efficient automobiles.

It's an emotional issue, and I'd encourage you to look at it rationally. In response to your other comments, urban sprawl is directly tied to subsidized gas prices, too. But sprawl comes with its own problems, not the least of which is the requirement for more roads and utility infrastructure. We should encourage higher density development -- it reduces demand for energy, among other things. Gas at even twice the current price won't lead to riots and murder and larceny any more than it did in the 1970s or than it does in Europe. People won't be happy, sure. Kill their neighbors? Unlikely.

swoon
04-16-2008, 12:33 PM
Great idea McCain. We really need to encourage more gasoline consumption and increase the US debt load because we wouldn't want to lower our standard of living to something like that of those practically third-world Europeans paying several dollars in gas taxes.

toastblows
04-16-2008, 01:18 PM
Its pretty easy...a company can get corporate tax breaks on revenue for fuel offsetting pains. Joe consumer shouldnt get jack. You dont have to repeal the tax at the pump.

Id rather pay the 18.4 cents fed and 25 cents (or whatever MN is). Its a lot cheaper to me than paying $100 million+ the victums of the I35 bridge collapse in our state.....which last time i checked....would come out of state funds and insurance....which is a tax on me anyway. Oh, and the bridge was what $300 million with clean up. Probably cheaper if you dont have to spend 4 months in the river digging out the remains of the old structure.....keep repealing those taxes though republicans

mparrish
04-16-2008, 01:26 PM
And I'll take up arms against anyone in government who seriously proposes it.

But I'm gonna take your guns BEFORE I raise your gas taxes.

Haha. I kid, I kid. I'm a kidder.

GreenBlues
04-16-2008, 01:51 PM
Since we have gotten a little political in a couple of posts lately:

I think all you neocons here need not worry about Obama or Hillary; there are soo many rednecks out there that will never ever vote for a woman or a black regardless how messed up the country is or what policies they have on their platform that McCain wins by default. (I mean no disrespect for the sacrifice Mr. McCain made during Nam. Another war that did not need to happen.)

For the folks that think they know who is the richest on the block, it is not Obama: http://www.cnn.com/2008/POLITICS/04/16/elitism/index.html

“McCain, whose father and grandfather were Navy admirals, married into wealth. His second wife, Cindy, has a stake in her father's multimillion-dollar beer distributor company. The Associated Press estimated her worth at more than $100 million.” (I never did think admirals were in the poor house.)

Also, I am not looking forward to another 100 years of war for a country that was created back in the 1920s by drawing some lines in the sand and saying basically here is your king. The various factions had no reason to form a viable country then and they do not now. Iraq is just another Yugoslavia. It is an artificial country that has no reason to exist in the present form. Do you really think our economy can handle much more deficit spending? (And since we are all against taxes, exactly how is it that YOU expect to pay those trillions that we now owe mostly foreign governments?) Maybe if we devalue the dollar enough it will no longer be an issue. Our founding fathers made it hard for this country to go to declare war but unfortunately the presidents of the recent past have taken more power to engage in war than our system of checks and balances intended. To spill the blood of our sons and daughters is something that should not be taken lightly and should only occur after great thought and planning. See: http://www.youtube.com/watch?v=o-zoPgv_nYg . And surely going to war to assure we can still drive our FSP SUVs and 4x4s or because of a personal vendetta is not sufficient reason.

Bin Laden, remember him? I would not be surprised that when we do find him it will not be in the mountains of Pakistan but rather in the basement of some palace in Saudi Arabia.

One of my greatest issues with the country is the fact that the lobbyists are the ones really running the country. It is the height of naivety to think we have any say. (It is interesting how the term lobbyist came to be: President Grover Cleveland was forbidden by his wife to smoke in the White House (Was she ahead of her time?) so he went to a nearby hotel lobby to smoke and the rest is history.) The constitution does not legitimize a fourth branch of government headquartered on K Street. When money is passed under the table in Russia we call it graft and corruption. Here we just call it lobbying. Mr. McCain claims to be squeaky clean but I suggest you go here: http://en.wikipedia.org/wiki/Keating_Five.

“McCain received $112,000 by 1987 from Keating and Keating's relatives and employees to McCain's Senate campaign, more than any of the other Senators. [1] In October 1989 The Arizona Republic reported that in addition to campaign contributions, McCain's wife and her father had invested $359,100 in a Keating shopping center in April 1986, a year before McCain met with the regulators. The paper also reported that the McCain’s, sometimes accompanied by their daughter and baby-sitter, had made at least nine trips at Keating's expense, sometimes aboard the American Continental jet. Three of the trips were made during vacations to Keating's opulent Bahamas retreat at Cat Cay.” Where do I sign up?

Lastly I would encourage everyone to actually go out and vote. What I find is that the most vocal people generally do not vote, do not read any newspapers or watch any news on TV or the internet (except of course the sports), never read a book on anything close to politics, history or current events. Make an effort to actually seek out non biased information on the candidates. A few suggestions:

http://www.votesmart.org/
http://www.politichoice.com/

Earthling
04-16-2008, 02:09 PM
The demand for gasoline is pretty inelastic. But the real secret? So is supply. Cut the gas tax, the demand curve shifts out, and you will see demand for driving increase. But there isn't enough fuel in the pipeline right now to accommodate all of that demand. So prices will be bid back up to equilibrium anyway. And then what happens in the fall when we expect gas prices to decline again, but wait -- now we have to reinstate the gas tax. It's a zero-sum game. What's lost is four months of tax revenues to maintain roads.

The same thing happens when we widen highways. On a three-lane congested highway there's a certain segment of the market for driving that is priced out -- congestion is too high of a cost to commute, so some find alternatives (work from home, alternate hours, etc.). As soon as the road is widened to four lanes (33% increase in supply), the cost of commuting falls and MORE people commute. As a result, the new supply is immediately consumed. It's called induced demand. Anytime you shift the supply curve out you induce more consumption until the price is bid back up to equilibrium.

This induced demand is the problem with suspending the gas tax. It may pain you to hear it as a broke college student, but if anything, gas has historically been too cheap. We've subsidized it as the cost of encouraging commerce when oil was plentiful, and as a result we are now hopelessly tied to oil. Instead, we should have followed Europe's example and used higher taxes as a tool to encourage less driving, lower congestion and the sale of more efficient automobiles.

It's an emotional issue, and I'd encourage you to look at it rationally. In response to your other comments, urban sprawl is directly tied to subsidized gas prices, too. But sprawl comes with its own problems, not the least of which is the requirement for more roads and utility infrastructure. We should encourage higher density development -- it reduces demand for energy, among other things. Gas at even twice the current price won't lead to riots and murder and larceny any more than it did in the 1970s or than it does in Europe. People won't be happy, sure. Kill their neighbors? Unlikely.

Excellent analysis!

Mention high gasoline prices to gas-hog drivers, and they will universally curse Big Oil. It's more reliable than applying a rubber hammer to a knee to check reflexes.

Harry

Earthling
04-16-2008, 02:12 PM
As far as politicians go, why does every last one of them wind up wealthy after a few short years in power?

It's not about neocons versus limousine liberals: all politicians in the US are corrupt, and our energy policy, or lack thereof, proves it.

Harry

toastblows
04-16-2008, 02:14 PM
I know, can we elect someone with a networth less than $100k and a brain. Currently in charge: no brain, $25 million net worth.....gotta love the american dream :flag:

Chuck
04-16-2008, 02:18 PM
As far as politicians go, why does every last one of them wind up wealthy after a few short years in power?For one thing, we buy the books and see the lectures.

warthog1984
04-16-2008, 02:20 PM
GreenBlues-

Good and informed post. Just remember that because somebody's Republican, it doesn't mean they're a neoconservative. One of my friends is a diehard "bleeding heart" liberal while I'm fairly conservative. Our views on policy & the world are near identical. Our faith in humanity differs :Banane48: Lets call the whole thing off:Banane48::D.

I'm a McCain fan. His honesty and bluntness appeals to me. Am I in favor of his policies? No. Did he screw up in the 80's? Yes, but he apparently vowed never to be involved in stuff like that again.

To second your last point- VOTE. Learn all you can about the candidates, study, and analyze what they say, and Vote. I don't care if you despise all the candidates so much that you go in and punch a blank ballot, but stand up and be counted. Only 20-30% of Americans vote in each election cycle. The other 70% have no right to B!^%&.

xcel
04-16-2008, 02:27 PM
Hi Wayne:

___Thank you for the synopsis as it was a good one! My vote will be for either Obama or Clinton for so many reasons …

___About our country and lowering the gas taxes … Auston, you are still quite young when it comes to this kind of thing but what most need to get there hands around is the following …

http://www.brillig.com/debt_clock/debtiv.gif
U.S. NATIONAL DEBT CLOCK

___Cut what? SS which is already being thrown at the general fund to the tune of $Billions per day. You know, that pesky little 15 +% that goes to the gov. for everybody’s first $100K but anything over $100K do not pay into that general fund that funds everything. Medicaid? Seniors screaming in the streets. Military? That budget has doubled in the last 7 years. Funny how my income didn’t? Ahh, road and bridge maintenance. Oh wait, the $0.18 per was supposed to pay for that to begin with :rolleyes: How about public education? Maybe all higher education funding? There are a ton of things that can be cut but the debt problem is not going away with the current Republican Administrations current course and this is the stupidest idea I have ever heard of due to our addiction! Until this country admits its addicted and moves to get off the habit, we are quite literally screwed until hell freezes over. McCain’s proposal just pushed the US into a death spiral and there is no hope of pulling out with the kind of non-sense he is currently pushing.

___At least Clinton had surpluses the last 3 years and our country was viewed with respect and was on a far more solid financial footing then we have been the previous 7 years :rolleyes:

___Good Luck

___Wayne

Retired Fed
04-16-2008, 03:22 PM
Some interesting ideas for sure. . My first reaction was that it (the Tax reduction) would be a good thing -- perhaps indirectly lowering food costs and the cost of other "shipping dependent" products. . But now I'm going to have to rethink my position. . Thanks for the input. . . Fed

lamebums
04-16-2008, 05:52 PM
Lamebums--

I don't want to get into a peeing contest, but higher gas taxes won't lead to collapse. Truckers may complain and the price of goods will increase, but only until we find substitutes for over the road transportation, which is something we need to move towards anyway. One needs only to look at the price spikes in oil in the 1970s as proof that we as a country can change our ways. We just happen to have short memories.

The demand for gasoline is pretty inelastic. But the real secret? So is supply. Cut the gas tax, the demand curve shifts out, and you will see demand for driving increase. But there isn't enough fuel in the pipeline right now to accommodate all of that demand. So prices will be bid back up to equilibrium anyway. And then what happens in the fall when we expect gas prices to decline again, but wait -- now we have to reinstate the gas tax. It's a zero-sum game. What's lost is four months of tax revenues to maintain roads.

The same thing happens when we widen highways. On a three-lane congested highway there's a certain segment of the market for driving that is priced out -- congestion is too high of a cost to commute, so some find alternatives (work from home, alternate hours, etc.). As soon as the road is widened to four lanes (33% increase in supply), the cost of commuting falls and MORE people commute. As a result, the new supply is immediately consumed. It's called induced demand. Anytime you shift the supply curve out you induce more consumption until the price is bid back up to equilibrium.

This induced demand is the problem with suspending the gas tax. It may pain you to hear it as a broke college student, but if anything, gas has historically been too cheap. We've subsidized it as the cost of encouraging commerce when oil was plentiful, and as a result we are now hopelessly tied to oil. Instead, we should have followed Europe's example and used higher taxes as a tool to encourage less driving, lower congestion and the sale of more efficient automobiles.

It's an emotional issue, and I'd encourage you to look at it rationally. In response to your other comments, urban sprawl is directly tied to subsidized gas prices, too. But sprawl comes with its own problems, not the least of which is the requirement for more roads and utility infrastructure. We should encourage higher density development -- it reduces demand for energy, among other things. Gas at even twice the current price won't lead to riots and murder and larceny any more than it did in the 1970s or than it does in Europe. People won't be happy, sure. Kill their neighbors? Unlikely.

Yeah, let's not get into a pissing contest--I'll just keep this short and drop it, before we get mad at each other.

I just refuse to believe that gas prices are too cheap. I know in Europe they tax the hell out of gas there, but then again, they tax everything in Europe. That's why Europe's economy has been stagnant, their production per capita is only two-thirds ours, their unemployment is in the double digits, and many governments are faced with staggering debts. I don't get people in this country who say we should be more like western Europe. Great. I'll pay $15 a gallon, stick a VAT on everything, pay 80% of my check to a welfare state to support bums who refuse to work...or better yet, I'll just leech off the system.

Also, I don't get where you're coming from with the roads. You say if you increase capacity, it will increase congestion? I don't get how that one will work. There's only so many people living in a given area--therefore there can only be so many cars. No matter how big or gas guzzling they are, they can't be in four places at once to gum up every last road. Build a road big enough to handle tomorrow's problems, not halfassed solutions, and the traffic congestion will be fixed. (And don't even get me started about traffic congestion in non-American cities...it's ridiculous.)


Cut what? SS which is already being thrown at the general fund to the tune of $Billions per day. You know, that pesky little 15 +% that goes to the gov. for everybody’s first $100K but anything over $100K do not pay into that general fund that funds everything. Medicaid? Seniors screaming in the streets. Military? That budget has doubled in the last 7 years. Funny how my income didn’t? Ahh, road and bridge maintenance. Oh wait, the $0.18 per was supposed to pay for that to begin with How about public education? Maybe all higher education funding? There are a ton of things that can be cut but the debt problem is not going away with the current Republican Administrations current course and this is the stupidest idea I have ever heard of due to our addiction! Until this country admits its addicted and moves to get off the habit, we are quite literally screwed until hell freezes over. McCain’s proposal just pushed the US into a death spiral and there is no hope of pulling out with the kind of non-sense he is currently pushing.

I don't see why it's so hard to repeal the new Medicare expansion, roll back Medicaid and the war on Iraq, that will save half a trillion a year alone. Oh, that's right, it is with all the interest groups running about... :(

Right now the Fed is trying to inflate our way out of the debt which may be semi-effective but it will destroy us in the process. :(

desdemona
04-16-2008, 10:55 PM
If we do this I don't know how we will stay in Iraq another 100 years. I know cheap shot. :D

--des

lamebums
04-17-2008, 12:13 AM
If we do this I don't know how we will stay in Iraq another 100 years. I know cheap shot. :D

--des

Deficit spending is the government's friend. And then when they rack up the debt, they'll just inflate the money so suddenly the debt isn't worth as much. :)

HCHCIN
04-17-2008, 08:39 AM
Also, I don't get where you're coming from with the roads. You say if you increase capacity, it will increase congestion? I don't get how that one will work. There's only so many people living in a given area--therefore there can only be so many cars. No matter how big or gas guzzling they are, they can't be in four places at once to gum up every last road. Build a road big enough to handle tomorrow's problems, not halfassed solutions, and the traffic congestion will be fixed. (And don't even get me started about traffic congestion in non-American cities...it's ridiculous.):(

Easy. Under the three-lane conditions, congestion represents a cost for commuting that priced some people out of the market, either because the time spent commuting was too valuable or gas wasted in traffic jams was too expensive. These people found substitutes, either by working from home, commuting at off-times, carpooling, or in many cities, taking public transportation.

When new capacity (a fourth lane, i.e. new supply) is introduced, it eases congestion at first, which manifests as a lower cost of commuting, at least initially. People who reluctantly (e.g., at the margin) chose alternatives before now find they can afford to drive again, and thus demand is induced. But as soon as those marginal commuters take to the highways, the road is full again. So you're left with the same level of congestion, except you've encouraged more people to be on the road in the process.

Again, what it comes down to is that driving has historically been too cheap in this country. Instead of letting "market" forces drive our choices for personal transportation, we've subsidized individual car travel by (A) artificially keeping gas cheap and (B) having as a government function the provision of highway capacity.

In Atlanta, the average commuter spends over five hours per week commuting in a car by himself. Read that sentence again and let me know if you think that's a sustainable situation. --RN

Right Lane Cruiser
04-17-2008, 08:47 AM
In Atlanta, the average commuter spends over five hours per week commuting in a car by himself. Read that sentence again and let me know if you think that's a sustainable situation. --RN

Hm. My average weeklly commuting includes 5 RT work commutes and 2 RT Church commutes. Each trip takes me on average 50min -- leaving me with total commute time of 350min... so nearly 6hrs?

Now you know why I felt bad about driving the Elantra -- even though I average over 50mpg doing it. :(

(That's right around 300mi with just me in the car)

lamebums
04-17-2008, 11:31 AM
Easy. Under the three-lane conditions, congestion represents a cost for commuting that priced some people out of the market, either because the time spent commuting was too valuable or gas wasted in traffic jams was too expensive. These people found substitutes, either by working from home, commuting at off-times, carpooling, or in many cities, taking public transportation.

When new capacity (a fourth lane, i.e. new supply) is introduced, it eases congestion at first, which manifests as a lower cost of commuting, at least initially. People who reluctantly (e.g., at the margin) chose alternatives before now find they can afford to drive again, and thus demand is induced. But as soon as those marginal commuters take to the highways, the road is full again. So you're left with the same level of congestion, except you've encouraged more people to be on the road in the process.

Again, what it comes down to is that driving has historically been too cheap in this country. Instead of letting "market" forces drive our choices for personal transportation, we've subsidized individual car travel by (A) artificially keeping gas cheap and (B) having as a government function the provision of highway capacity.

In Atlanta, the average commuter spends over five hours per week commuting in a car by himself. Read that sentence again and let me know if you think that's a sustainable situation. --RN

That just proves that the fourth lane upgrade wasn't sufficient to handle the traffic. I know that in many cases upgrading the infrastructure is impossibly expensive especially in urban areas, but it's imperative to upgrade wherever possible. I'm willing to bet gas consumption will decrease if you replace five hours of beep and creep with two hours of actual good movement. I'll use a local example--I-275 on the Kentucky side--three lanes in each direction. Unless the weather's hideously bad or there's a major accident, I've never seen a traffic jam on that road. It's because the carrying capacity of the road far exceeds any possible traffic at any given hour. What makes it impossible to upgrade other highways across the nation to that point? And in places where it's impossible, then I'm sure people have already moved to alternatives despite their costs?

I don't see the need to artificially inflate the price through government taxation. That's just a double whammy between the taxes and the high prices overseas, which will bankrupt a lot of people. Again, local example--TANK has no west-east routes. I'm screwed if I can't afford gas.

I believe gas prices will continue to rise, and as a result demand will tail off over time as driving becomes prohibitively expensive. By artificially inflating the price of gas through tax you are in fact not letting the market forces dictate our transportation choices.

xcel
04-17-2008, 12:56 PM
Hi Auston:
I don't see the need to artificially inflate the price through government taxation. That's just a double whammy between the taxes and the high prices overseas, which will bankrupt a lot of people. Again, local example--TANK has no west-east routes. I'm screwed if I can't afford gas.

I believe gas prices will continue to rise, and as a result demand will tail off over time as driving becomes prohibitively expensive. By artificially inflating the price of gas through tax you are in fact not letting the market forces dictate our transportation choices.
___The problem with the above is our country is spending hundreds of $Billions of defense $’s on keeping that flow of oil moving and those $’s are not even touched upon within the price of gasoline that we all pay today. Think along the lines that we breached .4 Trillion $’s/year for oil imports per year (and this number is still and will continue to climb!), our defense budget is .4 Trillion $ with .1 Trillion $ covering just the Iraq war year over year.

___Do you see the bigger picture. Is our military covering every hot spot on earth or mostly those with a few million BBl’s of oil in the ground? WMD’s and Terrorism? I think the 19 of 26 9/11 hijacker’s being Saudi’s and no Iraqi’s should answer that question :(

___Good Luck

___Wayne

Shiba3420
04-17-2008, 01:13 PM
Centralize taxes:
Get rid of all but one location...I don't care where it is. If there has to be 110% sales tax, fine, as long as I end up taking home a little more than double than what I used to (and without other taxes, I should), I still have the same spending power. But all the red tape is gone from all but one location. Sweet...

Until that golden day...lets see would I rather pay a few extra dollars at the pump, or would I prefer to have to replace another set of tires blown out in pot holes? Why was I going so fast? To prevent some jerk from running into me on his now "cheap" gas.



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