The politics of a gas tax holiday
Dante Chinni
Posted: 05.02.2008 / 8:16 AM EDT
Rising gasoline prices, and ways of handling them, created a small stir on the campaign trail this week.
Sen. John McCain has proposed a suspension of the federal gasoline tax from Memorial Day to Labor Day this year to give people a break. Sen. Hillary Rodham Clinton has one-upped Senator McCain: She not only supports a gasoline tax holiday but also advocates taxing the oil companies’ profits to make up for the lost revenue. Sen. Barack Obama, for his part, opposes the holiday, saying that it won’t save people much and that the money used for it could be better spent elsewhere.
The gasoline tax debate raises interesting issues when viewed through the Patchwork Nation prism.
No one likes the idea of paying $4-a-gallon for fuel, but in some places in the United States driving is a way of life. It’s hard to bring your steers to the auction house on a subway car, after all, and at last check no one was offering to build an extensive mass transit system through rural Iowa or up the Oregon coast.
In many Patchwork Nation communities gasoline prices have been a “top issue.” Yesterday, Kip Ward, one of our bloggers in Lincoln City, Ore., (Service Worker Centers) wrote about the big impact gas prices are having there.
But which of our Patchwork Nation communities is taking the biggest hit? That depends on how you slice the numbers.
Looking only at the cost per gallon at the corner station, Lincoln City; Eagle, Colo.; (Boom Towns) and Ann Arbor, Mich. (Campus and Careers) are having a rough time.
Not many stations are in the Lincoln City area, where the going rate is a uniform $3.69 a gallon, according to GasBuddy.com, which monitors the gasoline prices in every county across the nation. The cheapest regular gasoline in the Ann Arbor area is $3.59 a gallon, but most of the stations sit at about $3.69, according to GasBuddy.
Price updates weren’t available for Eagle, but in nearby Edwards, Colo., just down Interstate 70, the price was sky-high, ranging from $3.79 to $3.88 a gallon.
The per-gallon cost is only part of the hardship that high gasoline prices create. How much a person uses is a factor, too. By that measure, densely packed Ann Arbor has a lot of advantages. Stores are close together, and it’s possible to walk to pick up a few groceries.
In Lincoln City and Eagle, things are generally farther away and walking is often not an option.
A look at GasBuddy.com’s “temperature map,” which tracks the cost of fuel across the United States, reveals other interesting ways to consider gasoline costs in a Patchwork Nation.
The first: Prices differ depending on the state. That’s due to state taxes and the cost that goes into making the specific blend that each state requires by law.
But a larger trend is behind those state figures, says Jason Toews, a cofounder of GasBuddy. “The larger the city, generally the larger the range of prices,” he says. “Rural locations tend to be more uniform in price and those prices tend to be higher.”
So people in Sioux Center, Iowa, (Tractor Country) are likely to pay more than people in Des Moines, Iowa. People in Eagle are likely to pay more than people in Denver. And, yes, people in Lincoln City are likely to pay more than people in Portland, Ore.
What does all that mean for the presidential race?
Well, Service Worker Centers like Lincoln City and Boom Towns like Eagle are expected to be “battlegrounds” in the fall. The fact that both of these community types tend to be slightly more rural means that their residents tend to drive more and are probably taking more of the brunt of the rise in gasoline prices.
All of which is another way of saying: Wonks can chat all they want about whether a gas tax holiday is good policy, but it looks like it might be very good politics.
May 2nd, 2008 at 10:29 am EDT
Is any one in the media or America listening to Hillary and McCain’s gas tax holiday promises? It’s real simple folks they can promise everyone $1million dollars “THIS SUMMER”…it isn’t going to happen. They CAN’T do anything “THIS SUMMER”. None of the candidates will even be President until January 2009.
May 2nd, 2008 at 1:16 pm EDT
Giving the American public an 18 cents temporary tax break is a slap in the face. Do they realy think that we are that stupid? That amounts to giving a patient having a massive heart attack an aspirin, then tapping themselves in the back and trumpet that off as a solution. To those politicians making such a rediculous sujestion, PLEASE!!!! get real and stop insulting our inteligence. If that’s the best they can come up with, then maybe they don’t deserve our vote.
Greg Rivera
May 2nd, 2008 at 1:39 pm EDT
With gas prices as high as they are, we are finally being forced to look critically at our driving habits. Unnecessary driving is being reduced becuase it has gotten so expensive. A tax rebate would lower the price at the pump, which would encourage us to drive that much more, demand for gas would increase and the price of gas would follow. The only candidate with the vision to see the economics of gas pricing as it is, and the spine to speak the truth about it is Sen. Obama. The others are either misguided (McCain?) or posturing for the media (Clinton?).
May 2nd, 2008 at 4:11 pm EDT
Like the other comments:
Has Sen. McCain or Sen. HRC brought up to the Senate a bill to Summer Gas Tax Holiday? If they have, how has the Senate voted. Has it passed the House? Does the Senate and House bills match? Did they send it up to GWB for signing? Did GWB sign or veto the bill?
What are they talking about and how many people are so gullible?
As stated in other comments, they are not the President yet? So is Sen. McCain so misquided of the process and is Sen. HRC continuing her usual pandering and triangulation?
May 3rd, 2008 at 9:19 am EDT
In the state I live in (Nevada) state gasoline taxes automatically rise to the level that the fed cuts to compensate for lost road revenues, so it would be a moot point for us….
May 3rd, 2008 at 7:11 pm EDT
Golly, but 18 cents on every gallon–hey, why not add it on, instead? Then people really would stop driving, we could dispense with that barrel of crude and America would look like it did for the Indians so long ago. Why oh why are some so easily dismissive of every little bit of help? (Of course the media loves to pound it in that Europeans have to pay double, almost 10 dollars in the Netherlands. But the Europeans didn’t have our lust for cars in the middle of the last century and mass transit is practically at everyone’s doorstep and let’s not forget their bicycles.) Have we been so pampered on the whole that penny-by-penny encroachments into our wallets can only be outweighed by dollar-by-dollar reimbursements? Even a small step is a step of promise and Clinton’s full scope of the problem and determination to find a realistic solution far out weighs any simple minded and elitist (oh, yeah!) pooh-poohing.
May 4th, 2008 at 3:09 am EDT
I think adding 18 cents per gallon is a GREAT idea Sandy. The cost of gas is far cheaper than its true cost. The only way we will wean ourselves off of gas is if we make it expensive and causing investment in alternate energy. The cost of gas should include the environmental damage it does (go to LA on a smoggy day and think of the health care bills it is causing) and the money the government spends to keep a free and stable world market for oil. Though I think the Iraq war was a dumb idea (an opinion I have always held b/c the threat is in Afghanistan/Pakistan/Saudi) and I know we did not go in there only for oil, we would not have had the 91 or 03 wars if there were not significant oil reserves in the area. I believe we truly wanted to help and spread democracy, as we do in most places, but the difference between Darfur and Iraq is oil.
May 5th, 2008 at 6:16 pm EDT
The American Oil Companies are doing everything they can to raise the returns to the shareholders. That my friends is the bottom line. If you want change (such as lower prices at the pump), than you need to address the larger share holders. Or start your own oil company that is not for profit.
May 6th, 2008 at 10:22 am EDT
If these clowns want to give me a tax holiday how about suspending the payroll taxes all wage earners pay for that same Memorial day to Labor Day period. I suspect the Fed Govt would grind to a halt without it though.
May 6th, 2008 at 11:57 am EDT
This whole “issue” is not an issue but a travesty.
1. The government take from a gallon of gasoline is absurdly low and should be increased.
2. Pandering, indeed. McCain is not very bright, Clinton is extremely cynical. Perhaps they would make the perfect ticket for the Know-Nothings?
3. The money would wind up in the pockets of the oil industry and the revenue used to maintain roads would be lost. How silly is that?
4. Windfall profits should be heavily levied retroactively to 2006.
5. The American driver needs to make better decisions re trips and vehicle purchase. Period.
May 7th, 2008 at 12:50 am EDT
Dante, you missed Kip’s point.
Even when Lincoln City residents cringe at the pump, we are decidedly NOT taking Hillary’s bait. Anti-green politics are not very good politics.
We’d rather do almost anything to try and make public transit, or carpooling, or bicycles in cold rain, than support a policy that lowers the price of producing greenhouse gases.
Clinton has lost Oregon — in Portland and on the Coast — with this one hoax of a holiday.