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 TruckerForum.com 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.”