Fuel to Food Program
by democrat voter, Mon May 05, 2008 at 09:24:48 AM EDT
Instead of arguing over whether a gas tax holiday is a good idea or not, or whether "experts" think it is good or if it would actually pass, people should consider other ideas that could help Americans at the pump and at the grocery store. Obama criticizes the tax holiday but he offers nothing instead. Here is an idea that could work. (BTW I have already sent this idea to the Clinton campaign, perhaps someone should tell Obama to offer something instead on only trashing others ideas)
Fuel to Food Program
The Fuel to Food program would provide consumers with a $.50 per gallon rebate on gasoline purchased at the pump. The rebate would be financed by leveling a windfall profits tax on Oil Company Profits. The rebate would be in the form of a food coupon, which could only be used for the purchase of food items as described under the federal food stamp program.
Per Capita Gasoline consumption .. 8.7 gallons per week
US gasoline consumption........... 2.6 billion gallons per week
Oil Company Profits 2007 ......... $200 billion*
Oil Profits....................... $3.9 billion per week
Estimated* based on the combined profits of the 5 largest companies and the reported 60% market share they hold.
Rebate $.50 per gallon (1) ....... $1.3 billion/week
Family of 4 ...................... $18 per week/$905 per year
Windfall tax rate................. 33percent/17 percent*
*based on Exxon's reported rate of 49 percent tax in 2007. Oil profits before taxes are $7.8 billion. Rebate of $1.8 billion is 16.6 percent of profit before taxes. This returns Oil company profits to approximately the 2003-2004 levels. This does not include diesel fuel. Diesel would need to fall under a separate program as it is primarily a commercial fuel.
(1)Rebates are in the form of a 'food coupon' which has the same spending restrictions as the federal food stamp program (no alcohol, tobacco, etc.)
This program would divert nearly $70 billion from Oil Company profits into the food industry in Jun 2008 - Jun 2009. Beneficiaries would include the consumer, agriculture, food processors, and retailers. According to the theory of demand side income multiplier, this would equate to an additional $112 billion in the economy.
This would result in a modest .8 percent in GDP growth in 2008, or 16.6 percent of the total growth from 2006 to 2007. Projections for 2008 are for a growth rate of an anemic 2.4 percent. The additional .8 percent increase would result in a 3.2 percent GDP growth, or a full 33 percent increase.
This program does not use any existing general revenues with the exception of the administration costs.
Now I know that people can and will shoot holes in this proposal, but the point is, there are things that can add to a discussion, or we can just keep sniping at each other and condemning others ideas as nausiem. What we need are ideas, not just tearing people down and trashing an idea just to be trashing the person, and not offering any alternatives. I, for one, and sick to death of the Obama people tearing down Clinton because she has offered one idea because Obama doesn't support the idea. What he should be doing instead is coming up with some other idea.
Here is one. There could be others, but let's face facts. The American people are hurting. They need some relief. They need someone to hear their problem and try to find some solution. Oil companies have plenty of experts saying that it won't work. But they keep making obscene profits while the average family needs help. They need to be contributing some help for these families that don't have experts, and pundits to sing the praises of their continuing to reap the profits from every pocketbook in this country.
Instead of arguing about the tax holiday, why not come up with some answers for people?