Saturday, May 03, 2008

Cutting the gas tax = bad poltics

While stumping in North Carolina this week, Hillary Clinton proposed something absurd, a holiday from the Federal Gas Tax.

At first, this may not seem like such a bad idea. However, if you dig into what Clinton proposes, you will soon see a zero-sum game dressed up as political pandering. The bill would free the end consumer from the per gallon tax, but would impose a tax on oil company profits. Anyone who knows anything about cost shifting in business, or has even a small iota of common sense can see why this is such a bad idea. The Oil companies get taxed, so to recuperate this extra "cost" they shift the burden on the end consumer. The net result is an increased cost for their product. While the price at the pump may not contain the extra federal sales tax, the inflated cost of the product being purchased nullifies any net reduction in fuel costs. Its no wonder so many people have started raising considerable doubt about the proposition.

Senator Obama has already made his comments. In addition, other members of the media have discussed the potential harm to the economy.

I would like to see something honest from the Clinton campaign that isn't loaded with useless double-talk or empty promises. Maybe then we could actually consider her a real candidate for President. Otherwise, she should do us all a favor and bow out.

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