So now Hillary Clinton has decided to endorse John McCain’s silly idea of a three-month federal gas tax holiday. Only Barack Obama, who voted for an Illinois gas tax holiday back in 2000 but has since seen the error of his ways, is standing firm against this nonsense.
Why’s it nonsense? First of all, because the impact would be minuscule, probably reducing the cost of a gallon of gas by less than a dime.
But the big issue is that artificially low gasoline prices over the past couple of decades are at least partly to blame for many of the nation’s woes today, from the huge trade deficit to a crumbling transportation infrastructure to the war in Iraq. Basically, U.S. drivers haven’t been paying anywhere near the real environmental, infrastructural, and military costs incurred in getting gas into their cars and then burning it. As a result we’ve overconsumed, and become ever more dependent on the world’s oil-exporting countries–all as a result of undertaxing gasoline.
Don’t believe me? Just listen to an expert:
“We know the broad contours of some things that have to happen,” said Douglas Holtz-Eakin, former director of the Congressional Budget Office who is now at the Council on Foreign Relations. “You have to price oil on a permanent basis to provide incentives to shift away from it. It’s the key issue — and the hardest one to make progress on.”
That was in 2006, before Holtz-Eakin became the main economic adviser to the McCain campaign. But this is one matter where the economic advisers always seem to lose out to the political hacks. And the McCain-Clinton gas tax plan is a monument to cynical political hackery at work. Yeah, it would just be temporary, and it wouldn’t cost all that much. But it’s just all wrong.
Now there was a non-pandering argument against raising the gas tax that one of my favorite Alabama legislators, Bill Fuller, used to make back when I was covering the Statehouse in Montgomery in the early 1990s: It’s a regressive tax that falls heaviest on poor people in rural areas who can’t afford to replace their gas-guzzling 1969 Plymouths. Okay. But it’s 15 years later now, and ever fewer of those 1969 Plymouths are still on the road. The people stuck with gas guzzlers now are mostly middle-class folks who bought big SUVs and pickup trucks. Do we really want–even in a token, temporary way–to be retroactively subsidizing their poor decisions?