McCain proposes suspending US gasoline taxes this summer

[Ron Burgundy]

AP - John McCain called Tuesday for the federal government to free people from paying gasoline taxes this summer and ensure that college students can secure loans this fall, proposals aimed at stemming the public's pain now from the troubled economy.

In the longer-term, the certain Republican presidential nominee said he would double the tax exemption for dependent children and offer people the option of choosing a simpler tax system.

"We know from experience that no serious reform of the current tax code will come out of Congress, so now it is time to turn the decision over to the people," McCain said in a sweeping economic speech at Carnegie Mellon University a week before Pennsylvania's primaries.

To help people weather the downturn immediately, McCain urged Congress to institute a "gas-tax holiday" by suspending the 18.4 cent federal gas tax and 24.4 cent diesel tax from Memorial Day to Labor Day. He also renewed his call for the United States to stop adding to the Strategic Petroleum Reserve and thus lessen to some extent the worldwide demand for oil.

Combined, he said, the two proposals would reduce gas prices, which would have a trickle-down effect, and "help to spread relief across the American economy."

Addressing the feared fallout of the ongoing credit crunch, McCain also said the Education Department should work with the country's governors to make sure that each state's guarantee agency — nonprofits that traditionally back student loans issued by banks — has both the means and the manpower to be the lender-of-last-resort for student loans.

Lawmakers, students and financial experts are worried that the credit crisis might make it more difficult for students and their families to find loans. Nearly two dozen lenders have dropped out of the federally backed student loan program.

Students, McCain said, "should not be denied an education because the recklessness of others has made credit too hard to obtain."

Among other proposals, McCain said he would:

_Require more affluent people — couples making more than $160,000 — enrolled in Medicare to pay a higher premium for their prescription drugs than less-wealthy people.

_Raise the tax exemption for each dependent child from $3,500 to $7,000.

_Offer people the option of choosing a simpler tax system with two tax rates and a standard deduction instead of sticking with the current system.

_Suspend for one year all increases in discretionary spending for agencies other than those that cover the military and veterans while launching an expansive review of the effectiveness of federal programs.

The four-term Arizona senator packaged the fresh proposals with long-standing positions in a wide-ranging economic speech on Tax Day in which he faulted not only Democrats but also fellow Republicans for failing to practice prudent spending and fix pricey entitlement programs.

"In so many ways, we need to make a clean break from the worst excesses of both political parties," McCain said, adding "somewhere along the way, too many Republicans in Congress became indistinguishable from the big-spending Democrats they used to oppose."

He also argued that Democratic rivals Barack Obama and Hillary Rodham Clinton would impose the single largest tax increase since World War II by allowing tax cuts enacted in 2001 and 2003 — and that McCain voted against but now wants to make permanent — to expire.

"Both promise big 'change.' And a trillion dollars in new taxes over the next decade would certainly fit that description," McCain said. Playing on the title of an Obama book, McCain added: "All these tax increases are the fine print under the slogan of 'hope:' They're going to raise your taxes by thousands of dollars per year — and they have the audacity to hope you don't mind."

The speech was part of McCain's ongoing effort to counter the notion — fueled by his own previous comments — that he's not as strong on the economy as he is on other issues. He also sought to fend off criticism from Democrats, including Obama and Clinton, that his small-government, free-market stances don't mesh with people feeling the pinch — particularly those hurting now.

He made his remarks a day after he said he believes the country has already entered a recession, a label the Bush administration has resisted even as a credit crisis, a housing slump, soaring energy costs and rising layoffs combined to soften the economy.

The speech also came the same morning the Labor Department reported another worrisome sign for the economy: Inflation at the wholesale level soared in March at nearly triple the rate that had been expected as the costs of energy and food both climbed rapidly. Oil prices hit a new high, rising over $112 a barrel for the first time.

source: http://news.yahoo.com/s/ap/20080415/ap_on_el_pr/mccain_economy [link]

[kinggovernor]

its sad that we will only get a freeze on spending rather than an across the board cut

[WickedLou9]

I don't think cutting the gas tax will really do anything. I drive ALOT. 400+ miles a week. I use probably 12-15 gallons of gas a week. Saving me $2.75 per week for a temporary period isn't going to make a lick of difference to me or anyone else. That's what like 30 dollars for the summer? Whoopde do. They might as well just give everyone a 30 dollar gas card and call it a day. That will fill my tank once...

But hey, atleast it gives us the appearance that the government is trying to do something right? Never mind the 30 dollars*how ever many drivers there are in the country. 50 million? 100 million? 200 million? Even if there were only 50 million drivers, that would result in a net loss of 1.5 Billion dollars in government income. How would he make up for that?

[northhunter]

Which is it? An ammount to small to matter or to big to make up?

[motivez]

Is it a federal or state tax?

[Ezra Smack]

I like the idea of a tax holiday once a year where all Federal state and local taxes are suspended. This would let people see just how much they are really being gouged. It will never happen though, it might start a revolution.

[SoFlaJDM]

that's pathetic

[illavbill]

awesome! I'll save a few dollars over the WHOLE summer. Great idea!

[kinggovernor]

Originally Posted by WickedLou9

I don't think cutting the gas tax will really do anything. I drive ALOT. 400+ miles a week. I use probably 12-15 gallons of gas a week. Saving me $2.75 per week for a temporary period isn't going to make a lick of difference to me or anyone else. That's what like 30 dollars for the summer? Whoopde do. They might as well just give everyone a 30 dollar gas card and call it a day. That will fill my tank once...

But hey, atleast it gives us the appearance that the government is trying to do something right? Never mind the 30 dollars*how ever many drivers there are in the country. 50 million? 100 million? 200 million? Even if there were only 50 million drivers, that would result in a net loss of 1.5 Billion dollars in government income. How would he make up for that?

why do people complain about gas prices when they are rising and the effect it has across the economy.

Yet when they are falling, people talk about the small amount of money they will save when they are refilling their personal car.

I don't have an answer for it, maybe I could turn it into a Phd. dissertation

[TankRizzo]

I was thinking about this the other day and I realized that we have no freaking clue how much taxes we're paying on gas since it's already figured in.

I just found this gem, and if it's accurate, it makes me sick. I'm sure it's figuring State and Federal Taxes and I don't think the state taxes would come out under McCain's proposal, but this would still be a very large bump if it goes through.







The only problem with it is when the tax is re-enacted.

[SoFlaJDM]

Originally Posted by TankRizzo

The only problem with it is when the tax is re-enacted.

it will be a democrat's fault for "raising the taxes on gas" when the time comes... don't worry

[TankRizzo]

Originally Posted by SoFlaJDM

it will be a democrat's fault for "raising the taxes on gas" when the time comes... don't worry

Well, duh.

[Phantom]

This seems like a pretty good "populist" idea.

It lowers the price on a good for which people watch the price extremely closely.

The tax relief will help the poor much more than it helps the rich.

I don't think it's generally a good idea, but lowering the tax might be a shrewd political move.

[WickedLou9]

Originally Posted by kinggovernor

why do people complain about gas prices when they are rising and the effect it has across the economy.

Yet when they are falling, people talk about the small amount of money they will save when they are refilling their personal car.

I don't have an answer for it, maybe I could turn it into a Phd. dissertation

I think you are oversimplifying it.
1) The decrease in price with the tax cut is small. The price has gone up more than 18 cents in the last few months alone.It has trippled in the past, what, 8-9 years? I remember being in college and filling up for .99 cents a gallon. That must have been in 1999 or so. That DOES have an effect on the economy over time. It's a cumulative effect.

2) The tax cut is temporary, meaning that when gas prices climb towards 4 dollars this summer, we will be hit with a final 18 cent jump right at the end when the tax is put back on.

3) The benefit to each individual driver is negligable. But when the total effect of millions of drivers is added up, it's alot of money. That entire cost is borne by one entity. Our government. It's too much of a cost for not enough benefit. We would be better off taking that couple billion dollars and putting it towards renewable energy, biofuels or whatever.

[kinggovernor]

Originally Posted by TankRizzo

I was thinking about this the other day and I realized that we have no freaking clue how much taxes we're paying on gas since it's already figured in.

I just found this gem, and if it's accurate, it makes me sick. I'm sure it's figuring State and Federal Taxes and I don't think the state taxes would come out under McCain's proposal, but this would still be a very large bump if it goes through.




The only problem with it is when the tax is re-enacted.

I am proud to live in the state with the HIGHEST gas tax in the country, even higher than Hawaii

[lew]

Originally Posted by WickedLou9

I don't think cutting the gas tax will really do anything. I drive ALOT. 400+ miles a week. I use probably 12-15 gallons of gas a week. Saving me $2.75 per week for a temporary period isn't going to make a lick of difference to me or anyone else. That's what like 30 dollars for the summer? Whoopde do. They might as well just give everyone a 30 dollar gas card and call it a day. That will fill my tank once...

But hey, atleast it gives us the appearance that the government is trying to do something right? Never mind the 30 dollars*how ever many drivers there are in the country. 50 million? 100 million? 200 million? Even if there were only 50 million drivers, that would result in a net loss of 1.5 Billion dollars in government income. How would he make up for that?

Gas taxes are expensive. You'd save a lot more than $2.75 a week.

[kinggovernor]

Originally Posted by WickedLou9

I think you are oversimplifying it.
1) The decrease in price with the tax cut is small. The price has gone up more than 18 cents in the last few months alone.It has trippled in the past, what, 8-9 years? I remember being in college and filling up for .99 cents a gallon. That must have been in 1999 or so. That DOES have an effect on the economy over time. It's a cumulative effect.

2) The tax cut is temporary, meaning that when gas prices climb towards 4 dollars this summer, we will be hit with a final 18 cent jump right at the end when the tax is put back on.

3) The benefit to each individual driver is negligable. But when the total effect of millions of drivers is added up, it's alot of money. That entire cost is borne by one entity. Our government. It's too much of a cost for not enough benefit. We would be better off taking that couple billion dollars and putting it towards renewable energy, biofuels or whatever.

I remeber that, its when I started driving. I used to pay for gas with change .

Would you want to pay an additional tax on gas so the money went to renewable energy? Cutting the ethanol renewable energy money is just a subsidy for farmers, who are making bank.

[WickedLou9]

Originally Posted by lew

Gas taxes are expensive. You'd save a lot more than $2.75 a week.

I did the math. The federal gas tax is 18 cents a gallon.

[WickedLou9]

Originally Posted by kinggovernor

I remeber that, its when I started driving. I used to pay for gas with change .

Would you want to pay an additional tax on gas so the money went to renewable energy? Cutting the ethanol renewable energy money is just a subsidy for farmers, who are making bank.

Eh I dunno. I think the issue of alternate energy sources is alot more complicated and a gas tax hike might not be the best way to fund it, not in today's economy anyway.