McCain Proposes a Summer Holiday for Gas Taxes

On a day when oil prices hit yet another record high, Republican Presidential candidate John McCain proposed suspending federal gas taxes this summer. Summer is typically when the cost of gas hits its peak for the year, and this year, many analysts expect the average price at the pump to exceed $4.50 cents a gallon. The tax holiday was one of several proposals McCain offered today in a speech in Pittsburgh, intended to supplement President Bush’s economic stimulus package and keep Americans spending in the midst of the current economic downturn.

The federal gas tax is 18.4 cents per gallon for unleaded gasoline and 24.4 cents for diesel, comprising less than 5 percent of current prices. For truckers and other independent professional drivers, the proposal would bring some much welcomed relief. The hardship of increased fuel prices has been so great recently that thousands have signed on at for a possible strike, reminiscent of a trucker strike in the 1970s that nearly crippled commerce for 10 days.

While they’ve yet to comment on a possible suspension of the gas tax, McCain’s democratic rivals, Barack Obama and Hillary Clinton, have both rejected the McCain economic plan as a whole. A quick sampling of energy economists done by the New York Times today found little support for the proposal. The economic fundamentals of reducing the price would be to increase consumption—meaning burning more fuel and producing more carbon emissions. Lee Schipper, an energy expert at the University of California Berkeley, said that higher demand would “just push the world price a bit higher, giving a sizable share of the tax refund to oil producers.”

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  • uktiger

    Great, lets push more tax burden to future generations. Works great for old selfish people.

  • VaPrius

    His solution for that is we eat our kids when we run out of food. Yippee! Problem solved! The Hummer is saved!

  • steved28

    I have a better idea McCain. Take that tax money and start putting it to better use. Like incentives for alternative energy vehicles.

  • jack r

    Instead he should be putting more tax on our gas.

  • MJ

    More TAX is what we need… We need to get gas over $4.00… Why not have the goverment do it rather than these oil companies.. We need to change the gas tax to a % and not a fixed number and it needs to be around 10%-15%.

  • Milton

    Our civilization runs on money. It will only make civilization wide changes when economics direct it to.

    It’s like redirecting a river. As long as you keep clearing a path down the old route, that’s where the water will flow.

    If you want to know where a candidate stands on the environment, oil dependence and green technology, just look at how they handle the rise in oil prices. Do they fight change? or embrace it?

    Unfortunately, anyone who says this publicly will get cruicified by the political rhetoric because we all want to have our cake and to eat it too.

  • Dave99

    So, many times I find myself disagreeing with statements made on this forum (I’m an engineering student who is fairly well-connected with the auto industry, so I have a different point of view and different opinions on what would and wouldn’t work), but I whole-heartedly agree with what you’ve said above. Cutting taxes on gas will only increase our national debt AND our gluttonous desire for gas… And honestly, $0.20 per gallon is a small fraction of the total cost of gas, why isn’t the current tax higher?

  • changetheworldnow

    True true true

    Look at Europe
    They have survived with $5.00 $6.00 a gallon?
    They buy small cars.
    They invest in mass transit.
    They live in towns not burbs.
    They all ride bikes.
    OK OK not everyone…..

    The problem we have is that we dont peg it at 500 and keep it there, even if the price drops (no time soon). That would get people really thinking hard.

    I have a few friends after Katrina hit and we had the spike in gas prices. They were thinking in a different way. They just sold the Suburbans to buy Passat Wagons (I tried I tried to steer them to 21st century technology) because they were sick of paying so much. That ‘fresh thinking’ went away when the prices dipped down.

    I am afraid that even without additional taxes
    the price of gas will remain high and change behavior

    OT below be forewarned

    One fundamental problem I see in our country is an almost maniacal aversion to ANY taxes ever. As a corrollary, ALL tax cuts are good a panacea for everything.

    Yet we have huge problems (Iraq, Global Warming, Budget Deficits, Trade Deficits, Medicare, INfrastructure) that will require more money.

    The two are incompatible ; we cannot KEEP cutting taxes and KEEP spending huge sums for Iraq etc.


  • Skeptic

    IIRC, the annual Federal Motor Fuel Tax take is about $36B, so one quarter’s worth, the amount Senator McCain wants to cede to the oil companies, is about $9B.

    That’s $9B your kids will have to pay back to China, with interest.

    Oh, and if he’s honest, which he’s not, he’ll cut highway spending by $9B and throw thousands of workers out on the street (DOT claims something like 30000 jobs per billion in highway spending).

    Senator McCain served his country honorably and went through hell several times during his service, but he’s going to be a LOUSY president.

  • Micha

    I’m glad that he wasn’t taken too seriously with his incredible solutions. America did good this time.

  • Josiah Charley

    This is madness, I tell you. When they see we agree to this situation, they keep pushing harder, until they would have taken everything from us. I’m sure they can come up with a better solution than us paying more and more and more. What do you say, guys, how about sending them some roses same day and soften their hearts?

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  • avena bailey

    Just got done reading the article and I have to say good. I agree with what you are saying and I will have to look further into this.
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