Gas Pains

Higher fuel costs are vexing most of us, but John McCain's proposal to suspend the federal gas tax of 18.4 cents per gallon and diesel tax of 24.4 cents per gallon this summer (since endorsed by Hillary Clinton) is irresponsible and probably ineffectual. The "tax holiday" would cost the federal government $9 billion--and McCain hasn't said how he would replace that revenue. It also wouldn't give drivers much relief unless oil companies also were banned from raising pump prices to swallow the difference. Oil companies have shown time and again that they have neither conscience nor national loyalty. Since the market has established that people will pay upwards of $3.50 a gallon--the average price for gasoline in mid-April--there is nothing to stop Exxon from treating McCain's "tax holiday" as just another windfall for petroleum retailers.

Among other major points in McCain's scanty energy policy: He would stop ethanol subsidies, undercutting farmers when they are finally making a profit from growing corn, and he would stop filling the Strategic Petroleum Reserves, which actually does make sense, but doesn't solve our energy needs. Both Hillary Clinton and Barack Obama present more comprehensive energy plans that propose to invest in clean-energy research and development and increase fuel economy standards.

We don't like to pay higher gas prices but at least it causes us to consider the cost of driving. Gasoline prices are at an all-time high in the US, but, adjusted for inflation, they're not that much higher than they were in 1981. According to InflationData.com, the average price of gas in 1981 was $1.35, which would be $3.17 in today's buying power. Premium gas prices in the US averaged $3.61 in mid-April but it's still less than half the pump prices in Europe, which run from $8.07 per gallon in Britain to $9.32 in the Netherlands, according to the US Department of Energy. The difference is largely due to fuel taxes--the gas tax in Britain is $4.90 per gallon, but US taxes haven't increased since 1993, when Bill Clinton and a Democratic Congress raised it by 4 cents to help reduce the federal budget deficit.

Congress should raise fuel taxes $1 or more per gallon to expand mass transit options for those of us who would like to cut back on our automobile use but don't have any other practical way to get to places like Storm Lake, Iowa. Congress won't do any such thing, of course, because ever since the Reagan administration Americans have been told they should not be expected to sacrifice for the public good.

Recall that Vice President Dick Cheney met secretly with oil company executives in 2001 to draw up the Bush/Cheney energy plan, which promoted oil production. Cheney mocked those who promoted conservation efforts and higher fuel efficiency standards.

Instead, Cheney and the Republican leadership made it a priority to open national parks for oil exploration. But even if oil were found in the Arctic National Wildlife Refuge, those reserves won't necessarily result in lower gasoline or diesel prices as long as oil companies continue to set the prices for refined fuels and newly affluent consumers in places like China and India increase the worldwide demand for petroleum products.

In the meantime, US consumers must demand more fuel-efficient cars. Toyota and Honda already have sedans in production that get more than 50 mpg. US carmakers, with $1.5 billion in subsidies from the Clinton administration, developed models that would get more than 70 mpg but shelved plans to put them in production when Bush/Cheney took office in 2001. With the US car mileage lagging around 25 mpg, Congress in 2007, for the first time in 30 years, raised the fuel efficiency standards to require an increase to 35 mpg by 2020. But you don't have to wait that long. Vote with your next car purchase to bring US troops home from the Mideast.

Congress also should assist independent truckers who are struggling to make a living in the face of diesel costs that have topped $4. Truckers complain that shippers pay fuel surcharges to brokers but those surcharges are not passed through to the drivers that pay for the fuel. The Owner-Operator Independent Drivers Association (ooida.com), which represents 162,000 independent truckers, wants Congress to mandate that freight brokers pass through 100% of fuel surcharges to truckers and requiring more transparency of those charges. Congress at least should hold hearings on the misuse of fuel surcharges.

Seventy percent of our nation's goods travel by truck and independent operators deserve a fair shot at making a profit from hauling those goods. Most jobs pay truckers $1 or less per mile and some independent operators say they already were pushing $1 a mile in operating costs, including fuel, truck lease and insurance, before the latest round of fuel increases. Truckers have no control over fuel prices but at least fuel surcharges that shippers are paying should get to them.

(See the entire editorial at The Progressive Populist.)

Tags: Barack Obama, fuel prices, gas tax, Hillary Clinton, John McCain (all tags)

Comments

10 Comments

Recced

nt.

by Student Guy 2008-04-29 04:03PM | 0 recs
Yeah under close reading

you have some disingenuousness (I need to stop reading diaries and comments while studying) in the statement where you say Clinton endorsed McCain's plan.  Clinton's plan is still stupid (in my opinion) but it is heaps better than Johnny Mac's plan

by Student Guy 2008-04-29 04:13PM | 0 recs
Intellectually dishonest

To say that Hillary endorsed McCain's plan, then go on to criticize McCain's plan for robbing the Highway Trust Fund, is just plain dishonest.

As she has done in all other areas of her policy, Hillary stated clearly how this tax relief would be paid for.

Please issue a correction.

by bobbank 2008-04-29 04:07PM | 0 recs
Re: Intellectually dishonest

By ignoring the country's infrastructure...

by hootie4170 2008-04-29 06:54PM | 0 recs
Re: Intellectually dishonest

How is our infrastructure destroyed if a windfall profits tax on Big Oil is reinvested into the highway trust fund?

by bobbank 2008-04-29 07:26PM | 0 recs
Re: Paid for ...

Gasoline consumption is inelastic with regards to price - small short-term fluctuations in price will not impact demand.  Use common sense or read an economics text, as you prefer.

by bobbank 2008-04-29 07:27PM | 0 recs
Re: Intellectually dishonest

"intellectually dishonest" is tough but fair criticism of the McCain-Clinton gas-tax-holiday proposal. Clinton's proposal for a windfall profits tax will be passed in the same bill that increases the gas tax by $1 a gallon. And she knows it stands no chance of being passed this year or next.

by jcullen 2008-04-30 02:43PM | 0 recs
Re: Gas Pains

Thanks for acknowledging the truckers. They're the one reason that I might support a gas tax holiday. They really deserve a break one way or another.

by LakersFan 2008-04-29 04:55PM | 0 recs
Re: Gas Pains

As Laurence ODonnell said today, it is pandering through and through.  This has NO opportunity to become law, and she knows it.  Total bullshit for progressives to start pandering to the least common denominator ... cutting taxes, and pushing debt to the next generation.  In fact - we should be taxing gas more heavily, a high carbon tax is the only way we will get off our addiction to oil.  Clinton should know this - Bill passed a $.05 gas tax in the late 90's.  

by stryan 2008-04-29 04:59PM | 0 recs
Re: Gas Pains

Clinton's "plan" for the tax-holiday involves imposing a windfall profits tax on oil companies so that they will pay the tax instead of us. Of course, none of this will happen until Bush is out of office. But, if Clinton is elected, I believe a permanent windfall profits tax will be the reality.

by zenful6219 2008-04-29 05:52PM | 0 recs

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