The Federal Gas Tax–Are the Presidential Candidates Trying to Buy Our Votes?

This past weekend I was interviewed by a reporter from a Texas radio station about ways to save money at the gas pump. That interview prompted me to write about 25 Ways to Save Money on Gas. Coincidentally, at the same time the presidential candidates were slugging it out over whether the government should implement a federal gas tax 'holiday' this summer.

The feds levy a tax on gas equal to $0.184 per gallon (tax on diesel is $.0244). Each of the candidates has a different view on whether the government should suspend the gas tax during the summer months when families criss-cross our fine country in search of the largest ball of twine (at least that's what we did when I was a kid). Let's check out each of their views, and then you can cast your vote to choose which proposal you think is best.

Senator Clinton, McCain and Obama's Gas Tax Proposals

In short, here are each of their proposals on the gas tax holiday:

Senator Clinton: She proposes suspending the federal gas tax from Memorial Day to Labor Day and imposing a 'windfall' tax on big oil companies to pay for it.

Senator McCain: He proposes the same suspension of the federal gas tax, but he wouldn't tax the oil industry to pay for it.

Senator Obama: He believes we shouldn't suspend the federal gas tax because we need the revenue to fund construction projects for roads, bridges and other infrastructure.

Now what's become more interesting than the proposals is the candidates' remarks about their opponent's proposals. Senator Clinton, for example, said that Senator Obama is out of touch with the economic realities faced by ordinary citizens:

[The federal gas tax holiday] might not mean much to my opponent, but I think it means a lot to people who are struggling here, people who commute a long way to work, farmers and truckers.

Senator Obama shot back saying,

We're arguing over a gimmick that would save you half a tank of gas over the course of the entire summer so that everyone in Washington can pat themselves on the back and say they did something.

A McCain spokesman said that Senator Obama "does not understand the effect of gas prices on the economy. Senator Obama voted for a gas tax reduction before he opposed it." This last point is a reference to the fact that as a state representative, Senator Obama voted at least three times in favor of temporarily lifting the state's 5 percent sales tax on gasoline.

But the best one-liner goes to Senator Obama, who said "let me tell you, this isn't an idea designed to get you through the summer, it's designed to get them through an election."

The Federal Gas Tax Holiday--Yes or No?

In my opinion, Senator Obama is the winner on this issue. First, what do you think big oil will do if the federal government imposes an 18.4 cent 'windfall' gas tax on the industry as Senator Clinton has proposed? Hmm, maybe raise the price of gas by, oh I don't know, maybe 18.4 cents per gallon. Second, gas prices do hurt. But isn't the answer to drive less, buy more efficient cars, live closer to work, telecommute, and so on? It seems the government is willing to do just about anything to keep us consuming at a breakneck pace (See Tax Rebate Checks). And while smarter money management recognizes the value even in 18.4 cents per gallon, is it really going to make that much difference to our budgets? Is it worth sacrificing the funds we need to repair and improve our country's crumbling infrastructure?

On this issue, I side with Senator Obama. The federal gas tax holiday is political pandering at its worst. We need solutions to the country's long-term problems, not temporary feel-good measures. But what say you?

Tagged as: cars, gas, gas prices, government, politics, Taxes