Thursday, May 01, 2008

Suspension of Gas Tax?

In an editorial today, May 1, 2008, the New York Times has blasted the call by Senators McCain and Clinton for a gas-tax holiday as "an expensive and environmentally unsound policy that would do nothing to help American drivers."

The Times should be lauded for noting "turning a tax off in May and on in September would be an administrative nightmare," a point I haven't heard, or read, elsewhere. Similarly, The Times correctly asserts "if a suspension in the excise tax reduced the price at the pump, it would encourage even more driving. This would simply push prices back up. Oil companies would be grateful, drivers less so."

Of course, if more driving would be encouraged, it would not be the "expensive" policy the Times cites because it still would bring in significant revenues from the gas tax- even more if it "would simply push prices back up."

The bigger problem with the Times eleven-paragraph editorial is its failure to represent accurately Mrs. Clinton's position on the gas tax. The Times itself, on its news side, had reported on Tuesday, April 29:

Mrs. Clinton said at a rally on Monday morning in Graham, N.C., that she would introduce legislation to impose a windfall-profits tax on oil companies and use the revenue to suspend the gasoline tax temporarily.

“At the heart of my approach is a simple belief,” Mrs. Clinton said. “Middle-class families are paying too much and oil companies aren’t paying their fair share to help us solve the problems at the pump.”


The Times charged "Senators John McCain and Hillary Rodham Clinton have hit on a new way to pander to American voters." Failure to mention Senator Clinton's support for a windfall profits tax on oil companies- apparently as a condition for suspending the gasoline tax- is so negligent as to make it appear an effort to distort Clinton's position, to make it appear as unwise as McCain's position. Times Op-Ed columnist Paul Krugman a day earlier had explained "the Clinton twist is that she proposes paying for the revenue loss with an excess profits tax on oil companies. In one pocket, out the other. So it’s pointless, not evil."

Suspension of the gas tax, with its administrative confusion and cost, is probably not a wise choice, even with a windfall profits tax, which would eliminate or reduce the budgetary expense. But The New York Times, Senator Obama, and other critics must consider the regressive nature of the gasoline tax and continually escalating cost of energy in destroying the hopes of poor and middle-class Americans in a deteriorating economy.

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