I'll Shill for Hillary

I like your analysis.

Why not a subsidy?

I went through your theory, and then I got to thinking what might happen if a tax-cut is implemented, and prices don't change for consumers. There would be a shrill cry that suppliers are 'stealing' the tax cut. And then WHAM, price controls. I'm not so sure this is an alternative; i think it's a catalyst.

I think you missed the point of why you can not find an economist to back Clinton's idea of a gas tax holiday. That is because Clinton links her support to a holiday with an windfall profits tax on 'big oil'. I remind you of an earlier statement from Clinton saying, about the oil companies, "I want to take those profits." And at that time she wasn't limiting herself to the 'windfall part' either You need to realize that Clinton's idea of excess profits is a whopping percentage (about 100%).

It is much easier to shill for McCain, who's support for the gas holiday is unencumbered except for a possible short term suspension of increasing the strategic oil reserve.

My problem with the whole thing is that the rhetoric they are spewing sounds like they want to shift the burden of the taxes from the consumer to the corporation. Which probably means that they will try to alleviate the taxes on the pump side only to raise them on the tanker side. Getting credit for "doing something" not doing anything, and making bad guys out of the oil companies.

Sir,

You refuse to see that if the tax cuts fail to change the price of oil, then they are meaningless to the average american consumer. The result of the tax cuts would only be for the american government to be deprived of much needed revenue, with no benefit to its citizens. Furthermore, the process for making tax cuts, and the time spent on this debate, keep us from spending time on other more important issues.

Henry,
When you say:

"...american government to be deprived of much needed revenue, with no benefit to its citizens."

If the Government lost needed wealth, then the wealth went somewhere, or it doesn't exist. You suffer a bias, as Brian might point out.

Obama's answers on this are getting a bit sharper. He now is no longer using "it's a $30 savings" answer that assumes prices won't rise if tax were cut.

Regarding your example for Virginia, Obama pointed out on Meet the Press that he voted for a state gas tax cut when he was in the Ill. legislature and consumers gained little. He's learned from that vote, he says.

Video

1. I strongly agree with Gamut that voters will probably want price controls or other harmful policies:

There would be a shrill cry that suppliers are 'stealing' the tax cut.

2. Bryan, if we temporarily ignore the issue of political feasibility, would you support a Pigou tax on gasoline -- and hopefully also on coal and any other carbon emissions?

I would in a heartbeat, if it were revenue-neutral! (Or even better, if it were accompanied by a cut in discretionary spending equal to the amount of revenue from the tax.)

On the source of ideas, Washington Times: John McCain, the presumptive Republican presidential nominee who should know better, was the first presidential candidate to endorse the gas-tax holiday for the summer driving season. Reportedly, the idea originated with a political pollster, not among Mr. McCain's economic advisers. What a surprise.

Tangentially, if you're expecting the price of oil to continue to rise, what is the benefit of not buying more for the SPR?

Obama's claim on Sunday isn't supported by the research, as cited by William Polley tjat indicates that about 60% of that tax cut went to consumers.

Tell me again who is ignoring economists?

I don't really understand why some of you guys seem to doubt that tax cuts on gas will be transferred almost 100% to consumer prices. Of course they will. Adequate competition will make prices adjust well regardless of price elasticity.

Do you know the current price of gas here in Sweden, btw? About $8.20/gallon. The gas prices are about the same throughout Western Europe. Why? Due to taxes, nothing else! That should tell you something...

I would actually prefer you yanks hiked your gas taxes to European levels instead of putting in new breaks. Why? Well, because I think taxes on labour hurt more, and because hikes would make you (and thus the world) less oil dependent.

Do you know the current price of gas here in Sweden, btw? About $8.20/gallon. The gas prices are about the same throughout Western Europe. Why? Due to taxes, nothing else! That should tell you something...
It tells me that the money goes to kings and politicians who did not spend a dime processing the gas.

How about using rebates instead of tax cuts?