Here is what Obama said about Clinton and McCain's pandering on gas tax suspension for the summer:
Clinton-McCain gas tax holiday slammed as bad idea
"It would last for three months and it would save you on average half a tank of gas, $25 to $30. That's what Senator Clinton and Senator McCain are proposing to deal with the gas crisis," he said on Tuesday in Winston-Sal
And he's absolutely right.
The Context:
Clinton-McCain gas tax holiday slammed as bad idea
By Alister Bull Wed Apr 30, 9:52 AM ET
WASHINGTON (Reuters) - A gas tax holiday proposed by U.S. presidential hopefuls John McCain and Hillary Clinton is viewed as a bad idea by many economists and has drawn unexpected support for Clinton rival Barack Obama, who also is opposed.
Republican McCain and Democrat Clinton, who is battling Obama for their party's nomination, both want to suspend the 18.4-cents-per-gallon federal gas tax during the peak summer driving months to ease the pain of soaring gas prices. The tax is used to fund the Highway Trust Fund that builds and maintains roads and bridges.
Economists said that since refineries cannot increase their supply of gasoline in the space of a few summer months, lower prices will just boost demand and the benefits will flow to oil companies, not consumers.
...
Obama criticized the plan as pure politics and said the only way to lower the price of gas is to use less oil.
"It would last for three months and it would save you on average half a tank of gas, $25 to $30. That's what Senator Clinton and Senator McCain are proposing to deal with the gas crisis," he said on Tuesday in Winston-Salem, North Carolina.
"This isn't an idea designed to get you through the summer, it's an idea designed to get them through an election."
A dose of math:
Gas Tax Math:
- An average car is driven about 12K miles per year.
- That's 1K mi per month.
- According to answers.com, the average mileage for an average car is 17 miles per gallon.
- That gives us 58.8 gallons per month for an average car.
- At 0.184c tax savings/pandering per gallon, that comes to $32.5 for 3 months.
which is pretty close to the $30 figure Obama gave. For cars that give higher mileage, say 25 mpg, the figure would be around $21 savings for the summer. As highlighted in the context excerpts, the proposed tax holiday is only for the three peak summer driving months. And even those small savings may well be wiped out by a possible increase in the price due to increased demand (even if that's only a blip) as economists are predicting.
A gallon of truth:
Please help spread the truth.
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UPDATE: Thanks to Setrak, we have from Politico leading economists like Prof. Stiglitz opposing the gas tax suspension:
Economists for the gas tax
Brookings' Henry Aaron sends over a statement (.pdf) signed today by 150 economists opposing the gas tax holiday.
They include Nobelists Joe Stiglitz, James Heckman and Daniel Kahneman, as well as a Clinton O.M.B. director, Alice Rivlin, and Robert Shapiro, the chief economic adviser to Bill Clinton's 1992 campaign.
Unclear how many vote in Indiana, though.
UPDATE: I spoke too soon. The list includes nine Indiana University economists, including the chairman of the department, Gerhard Glomm.
By Ben Smith 05:24 PM
...
Opening paragraph of their statement from the pdf file:
An Open Statement Opposing Proposals for a Gas Tax Holiday
In recent weeks, there have been proposals in Congress and by some presidential candidates to suspend the gas tax for the summer. As economists who study issues of energy policy, taxation, public finance, and budgeting, we write to indicate our opposition to this policy. Put simply, suspending the federal tax on gasoline this summer is a bad idea and we oppose it.