The McCain gas tax plan is a giveaway to oil companies, disguised as a gift to consumers

News Type: Event — Seeded on Wed Apr 30, 2008 9:45 AM EDT

Article Source: The New York Times

politics, obama, mccain, election, clinton, gas, tax, evil

John McCain has a really bad idea on gasoline, Hillary Clinton is emulating him (but with a twist that makes her plan pointless rather than evil), and Barack Obama, to his credit, says no.

Why doesn't cutting the gas tax this summer make sense? It's Econ 101 tax incidence theory: if the supply of a good is more or less unresponsive to the price, the price to consumers will always rise until the quantity demanded falls to match the quantity supplied. Cut taxes, and all that happens is that the pretax price rises by the same amount. The McCain gas tax plan is a giveaway to oil companies, disguised as a gift to consumers.

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The McCain gas tax plan is a giveaway to oil companies, disguised as a gift to consumers

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