Clinton / McCain: Drop the Federal Gas Tax Holiday Scheme

Stop this gas tax relief scheme! Both Senator Hillary Clinton and John McCain are offering motorists a federal "gasoline tax holiday."

The tax they are referring to is the 18.4 cents per gallon levied by the federal government as well as the 24.4 cents per gallon tax on diesel. McCain suggested the idea on April 15, and Clinton made a similar proposal on April 25.

The Clinton campaign claimed that the proposal, to last between Memorial Day and Labor Day, would save each driver $70. Of course, they could not explain how they came to that amount.

The American Association of State Highway and Transportation estimates that the total savings for the average American motorist works out to about $28; for a two-car household, $54.

But it is based on the assumption that gas prices would immediately drop by 18.4 cents. It is very likely that the price you will pay at the pump WILL NOT CHANGE! Even if you cut the price by that amount, it will stimulate demand for more gas, and eventually, that price discount would quickly disappear and we would revert to the normal supply and demand pressures.

Besides, the period they are suggesting for the holiday is during the summer where most motorists will be driving the most. Given the full capacity of our refineries converting a barrel of crude oil into gasoline, gas prices will still continue to go up.

Most economists agree that the federal gas tax scheme will not help gas prices. The Clinton campaign cannot even produce an economist who would agree with their plan.

Also, remember where that 18.4 cent per gallon tax is going to. It is being deposited directly into the Highway Trust Fund, which is used to pay for upgrades to roads and bridges. The American Society of Civil Engineers estimates that the 3-month gas tax cut holiday could cost as much as $8.5 billion dollars.

Would you want the Highway Trust Fund lose $8.5 billion of needed funds to keep our bridges and roads intact and kept safe for all American motorists? Of course not.

The Clinton and McCain campaigns fail to disclose this fact.

Drop the scheme and focus on something more meaningful to the voters.

URL: factcheck.org