WP: Clinton Gas-Tax Proposal Criticized (Only Obama understands Economics 101)

[dkf]

Economists Share Obama's View

By Alec MacGillis and Steven Mufson
Washington Post Staff Writers
Thursday, May 1, 2008; Page A01

A growing chorus -- including a top congressional Democrat -- labeled Sen. Hillary Rodham Clinton's proposal for suspending the federal gasoline tax ineffective and shortsighted yesterday, even as she continued to paint Sen. Barack Obama as insensitive to drivers' woes for not endorsing the plan.

The Democrats' clash on the issue has emerged as a flash point in the week before the presidential primaries in Indiana and North Carolina and is emblematic of the broader contrast that the candidates have presented: Clinton says she would make immediate bread-and-butter fixes for struggling Americans, while Obama portrays himself as a truth-teller who would bring a new kind of politics to Washington and produce more lasting change.

Backing up Obama's position against Clinton's proposal to suspend the 18.4-cent-per-gallon tax for the summer is a slew of economists who argue that the proposal, first offered by Sen. John McCain, the presumptive GOP nominee, would be counterproductive. They argue that cutting the tax would drive up demand for gas at a time when the supply is tight, which would mean that the price at the pump would drop by much less than 18 cents per gallon.

The tax suspension would, as a result, cut into the highway trust fund that the tax supports, a loss of about $9 billion over the summer, but also result in fatter profit margins for oil companies. Clinton says she would replace the lost revenue by raising taxes on the oil industry.

Harvard professor N. Gregory Mankiw, who has written a best-selling textbook on economics, said what he teaches is different from what Clinton and McCain are saying about gas taxes. "What you learn in Economics 101 is that if producers can't produce much more, when you cut the tax on that good the tax is kept . . . by the suppliers and is not passed on to consumers," he said.

http://www.washingtonpost.com/wp-dyn/content/article/2008/04/30/AR2008043003575.html

[FrenchieCat]

1. Hillary is now the True "Me Too" alternative candidate to John McCain.....

He's Republican; she's Republican-lite.

[dkf]

2. Its the his and hers versions...with variations on a theme

[FrenchieCat]

3. A duet !

[dkf]

4. lol..

That is too much! Hillary and McCain are competing against each other to see who can get more stupid in a crazy game of oneupmanship.

McCain wants to stay in Iraq for 100 years and Hillary wants to protect all the countries in the Middle East and nuke Iran.

McCain wants to get rid of the gas tax, Hillary wants to get rid of the gas tax and levy further taxes on the oil cos. Both will strip funds from our highways and let our bridges collapse. That is just great.

Hillary: Anything you can do I can do better!

[quantass]

7. lol

[dempartisan23]

11. hillary is a double whammy

by taxing the oil co's they will just pass that tax on to us anyway. so we get higher prices because demand is higher and even higher prices for her tax on the oil co's

[hokies4ever]

5. Indiana Primary = IQ Test for American People

Seriously though. I just don't see how someone could vote for a candidate who supports as dumb of a policy as this gas tax holiday. McCain I can understand. He's already admitted that he knows nothing about the economy, and I take his word for it. Hillary is another story. I don't think she's as dumb as McCain, yet she still supports it. She's just pandering to voters and insulting the intelligence of the Democratic Party and everybody who voted for her but can't take their vote back.

[Hope And Change]

6. K & R!

:kick:

[quickesst]

8. In 2000.....

Obama voted for a gas tax relief for Illinois. It passed. His explanation? That it would be a great relief for the citizens of Illinois because of the sudden hike in gasoline prices. Gas was around $1.57 at the time. Can anyone spell flip-flop? Bottom line is, he saw a political opportunity to separate himself further from the other two candidates. Unfortunately, he forgot about Google. If he had proposed the gas tax relief first, Obama fans would be lauding his wisdom. If one does not agree with that, they are lying to themselves. Thanks.
quickesst

[CTLawGuy]

10. ok

What is the amount of the gas tax in IL? To where does the revenue go? What else was in the bill he voted for?

It's like saying "even JFK voted to lower taxes!" Yeah... taxes in 1961 had a high rate of 90%!!!!!!!!!!!!!!

[4themind]

12. And even IF you equate the two,

it could be argued that obama LEARNED from his mistake, unlike Hillary on Kyl-Lieberman (and yes, can be seen as worse than voting FOR it)

[quantass]

9. Praise for Obama for Thinking!

[grantcart]

13. This gives a lot of people who are 'on the fence' a chance to weigh in

[Coexist]

14. ..