I just find it hard to believe we’re still talking about this obvious nonsense.
With gas prices reaching a national average of four dollars a gallon — a record high — John McCain is planning to resurrect his call for a national gas tax holiday, which became a staple of his stump speech in late April and early May.
A McCain aide told CNN’s Dana Bash on Monday that the Arizona senator planned to plug the gas tax holiday in public statements throughout the day as a message to voters that he understands the plight of working families in a tough economy.
Before a fundraiser in Richmond, Virginia on Monday, McCain mentioned the gas tax holiday in remarks to a smaller event for about 40 high-dollar donors. “That was derided by Sen. Obama and others as a gimmick,” McCain said, but added that working people and truckers would appreciate it.
McCain apparently conceded that his proposal wouldn’t solve the problem, but according to the CNN report, McCain believes “low-income families could save some extra cash to pay for their children’s school supplies this fall, or perhaps treat themselves to a nice dinner.”
This is just too ridiculous for words. McCain wants to eliminate the 18.4-cent a gallon federal gas tax over the summer. This would cost the Highway Trust Fund between $9 billion and $11 billion. McCain hasn’t said whether he’d just increase the deficit to make up the difference, or just let the transportation money disappear, costing thousands of jobs.
And what would consumers get in return? Nothing. Putting aside the volatility in oil prices, and the fact that the cost of a glass of gas will probably go up over the summer regardless of federal taxes, Americans won’t actually be in a position to save any money if the gas tax is temporarily repealed. McCain may not be the sharpest crayon in the box, but he almost certainly realizes this.
He has to.
This is just common sense. As Paul Krugman explained in April:
Why doesn’t cutting the gas tax this summer make sense? It’s Econ 101 tax incidence theory: if the supply of a good is more or less unresponsive to the price, the price to consumers will always rise until the quantity demanded falls to match the quantity supplied. Cut taxes, and all that happens is that the pretax price rises by the same amount. The McCain gas tax plan is a giveaway to oil companies, disguised as a gift to consumers.
Is the supply of gasoline really fixed? For this coming summer, it is. Refineries normally run flat out in the summer, the season of peak driving. Any elasticity in the supply comes earlier in the year, when refiners decide how much to put in inventories. The McCain/Clinton gas tax proposal comes too late for that. So it’s Econ 101: the tax cut really goes to the oil companies.
Got that? We can cut the tax, but the price wouldn’t go down. Oil company profits — which are already breathtaking — would go up, but there’d be no extra money in Americans’ wallets for school supplies or a nice dinner. It’s pure fantasy.
But something else occurred to me this afternoon. When pondering why on earth McCain would continue to push obvious nonsense about an important issue, the answer came to me: it’s because he has nothing else to say.
I went to his website to check on his energy policy. On his home page, there’s plenty about golf gear, but nothing about energy or gas prices. Eventually, after digging around for a while, I found this:
John McCain Will Help Americans Hurting From High Gasoline And Food Costs. Americans need relief right now from high gas prices. John McCain will act immediately to reduce the pain of high gas prices.
That’s not an excerpt of a longer position paper, that’s the entire text of McCain’s position on gas prices. He’ll “act immediately.” How? No one knows. With what kind of policy? It’s a total mystery. (In contrast, Obama has a detailed policy page on oil and energy.)
In other words, McCain is pushing a “gas-tax holiday” that he certainly realizes is ridiculous precisely because he has nothing else to offer. Asked about his policy, he could say, “Duh, I don’t know,” but that probably wouldn’t go over well. Or he could say, “Well, I was thinking about giving the oil companies some more tax breaks,” but that probably isn’t much of a vote-getter, either.
So we end up getting this stupidity about a “holiday” that wouldn’t cut prices, but would improve ExxonMobil’s bottom-line.
This, regrettably, is McCain the Con Man. He’s selling snake oil, hoping desperately that voters won’t know the difference. That his proposal wouldn’t do anything to help low-income Americans, wouldn’t lower the price of gas, and would boost oil company profits seems entirely irrelevant. A confidence man in the middle of a scam can’t be bothered with reality — it only gets in the way of the deception.