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U.S. Presidential candidates and the federal gasoline tax

Discussion in 'Off-Topic' started by Holysinner, May 1, 2008.

  1. Holysinner

    Holysinner IncGamers Member

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    U.S. Presidential candidates and the federal gasoline tax

    Sen. McCain recently proposed suspending the federal gasoline tax of 18.4 cents/gallon, and making up the lost revenues to the Highway Trust Fund from general revenues, ie. adding to the deficit.

    Now Sen. Clinton wants to suspend the tax but charge the oil companies a "windfall profits tax," which as far as I can tell would be passed on to consumers anyway, hence not altering the retail price at all.

    Regardless, most experts believe that suspension of the tax would have little to no impact on the retail price, as refiners cannot increase production to meet whatever increase in demand would result from a slightly lower price. Not to mention that the higher price should eventually lower demand or lead to increased supply (though with the regulatory/upfront cost difficulties in building new refineries, that may not be the case), which is what we want - so a temporary artificial downward adjustment in the price would be counterproductive.

    Sen. Obama describes both proposals as pandering to voters with a gimmick. This article shows he voted to suspend the Illinois gas tax when he was in the state legislature, though he now says he learned from the lack of results of that tax holiday.

    Now, I am usually all for tax cuts, but I am equally against increasing the deficit - and if the cut would not acheive it's desired result, it looks like a bad idea. I actually think that Obama is on the right side of the issue (this time), though I don't think he has done a good job of explaining why. What's your opinion?

    Maybe we should have a running election thread rather than starting a new one for each issue that arises. What do you think?
     
  2. peconomusman

    peconomusman IncGamers Member

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    Re: U.S. Presidential candidates and the federal gasoline tax

    I think that the saved 18.4 cents a gallon should be routed to my paypal. Please.
     
  3. SaroDarksbane

    SaroDarksbane IncGamers Site Pal

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    Re: U.S. Presidential candidates and the federal gasoline tax

    AKA The "We investigate the oil companies every 30 seconds and consistently fail to find any wrongdoing on your part but maybe the voters will be too stupid to realize it if I make up a name that sounds slimy" tax.



     
  4. Bortaz

    Bortaz Banned

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    Re: U.S. Presidential candidates and the federal gasoline tax

    She's the one that proposed seizing the profits of the oil companies and using it to cure mnombo fever in darkest Africa or something, so Hill lacks any credibility when considering the subject of oil/fuel. And riding to work with a dude, and watching him pump his $3.70/gal gas doesn't make you an expert.
     
  5. AluminumKnight

    AluminumKnight IncGamers Member

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    Re: U.S. Presidential candidates and the federal gasoline tax

    Wholeheartedly agree, Sinner. This just adds to the issues that I agree with Obama on. Eliminating the gas tax is stupid. The oil companies know that we'll pay this much for gas (in fact, they know we'll pretty much pay whatever), so all they'd have to do is raise the prices after the tax cut to the levels they're at now, or maybe a little less, and then when it expires, boom! We've got 10 cents higher than we should have, all going to oil companies.

    I don't know about you guys, but I'd rather have that money going to the government than to the oil companies.
     
  6. Bortaz

    Bortaz Banned

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    Re: U.S. Presidential candidates and the federal gasoline tax

    Why do you feel this way? What, exactly, don't you like about a free market?



     
  7. Dondrei

    Dondrei IncGamers Member

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    Re: U.S. Presidential candidates and the federal gasoline tax

    Every Presidential candidate is going to put forward stupid plans to help the gas price that don't stand a chance in hell of working. They have to, voters are demanding it. Double Democrat or Republican Ripple is your choice of flavours of stupid. Well, there's also Super Nutty Crunch, but who listens to independents?

    If you want sensible policy on this kind of thing convince voters not to think the government can do anything about it. The prices are driven by supply and demand, not the Big Bad Tax Bogeyman or the Big Bad Robber Baron Bogeyman. Sure, I don't like the fuel tax either but if fuel got cheaper then demand would increase and we'd be back at square one, more or less. Just like home buyers' grants.
     
  8. SaroDarksbane

    SaroDarksbane IncGamers Site Pal

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    Re: U.S. Presidential candidates and the federal gasoline tax

    How much money do you think "oil companies" make in profit on a gallon of gas?

    From your post, I have to think you're one of the people I'm talking about, who blame the "greedy" oil companies for the high prices. :rolleyes:



     
  9. Holysinner

    Holysinner IncGamers Member

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    Re: U.S. Presidential candidates and the federal gasoline tax

    Suspending the gas tax for the summer is stupid. Eliminating it altogether, and privatizing the highway system (thereby abolishing the Highway Trust Fund so the current revenue generated by the gas tax isn't needed for that purpose) is smart.

    I don't think that's the mechanism by which the price would not face downward pressure from suspension of the gas tax. Rather, the gas tax is factored into the current price, adjusted daily, which creates approximate equilibrium between supply and demand. Because the suspension of the gas tax doesn't immediately increase supply (refineries are essentially maxed out in production), the price can't decrease without creating more demand than there exists a supply to meet it. Thus the refiners or retailers would have no choice but to maintain the higher price.

    Not me.

    I agree with you, Dondrei. I don't like it anymore than you do, but it was bound to happen eventually.

    Actions of the US gov't. clearly have some influence on the price of gasoline, but it's principally in the areas of regulations on where exploration and exploitation of oilfields can take place and the building/expansion of refineries; state and locals requiring different formulations is also a factor.



    To no one in particular, please don't take the OP as advocacy for Obama - I just meant I think he is right on this one issue this time.



     
  10. WildBerry

    WildBerry IncGamers Member

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    Re: U.S. Presidential candidates and the federal gasoline tax

    I know roads deteriorate fast, but since the network is there already, are you suggesting grandfathering, selling them for the highest bidder or tearing them up with bulldozers so folks don't get freebies?



     
  11. maccool

    maccool IncGamers Member

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    Re: U.S. Presidential candidates and the federal gasoline tax

    If the IRS can spend 42 million dollars to tell us we're getting checks that we already knew we were getting, I suppose it would be preposterous to think that the Department of Transportation could send out a pamphlet on how to conserve fuel. You know, check your engine and tire pressure, accelerate gently, etc. Maybe a tire gauge - made in China of course - so people can check their tire pressure. These would cost less than the pandering (or brilliantly nuanced if you swing that way) proposals. The drawback is that it would require people to read and/or exert themselves by bending over to actively participate in using less fuel.


    Probably anywhere between 6 and 17 cents depending on refining capacity of the company and the price of crude 6 months ago if my math is right. Seems like a pretty good business to be in.



     
  12. Holysinner

    Holysinner IncGamers Member

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    Re: U.S. Presidential candidates and the federal gasoline tax

    I'd suggest auctioning them to infrastructure companies, with the proceeds going to pay down the federal debt. Yes, it would mean purchasing companies would end up charging tolls or selling all-you-can-drive contracts, and bearing the burden of maintenance.

    I don't want to get into the weeds of how this would work, you're free to disagree with me about it's feasibility. It's hardly the first thing I want to change about government activity or what's wrong in the world, and it was more of a throwaway proviso to the more general assertion that temporary tax changes will acheive much less of their intended impact than tax changes for which there is more-or-less a certainty that they will remain in place indefinitely.



     
    Last edited: May 1, 2008
  13. AeroJonesy

    AeroJonesy IncGamers Member

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    Re: U.S. Presidential candidates and the federal gasoline tax

    You are one of the first people I've actually heard mention this, even though I think it is by far the best way for people to save money on gasoline costs. I've read a few articles on the matter, and it seems that poor drivers can cost themselves in excess of 25% of their car's fuel mileage. Looking at it another way, dumb driving raises your fuel costs by 25%. So if gas is $4/gallon, the people with low tires, racing from light to light are paying $5/gallon.

    But I am not a fan of the "hypermiling" that some people do, which includes minor activities like overinflating tires, to more serious driving practices like drafting off a semi or "pulsing" where you use the gas for 10 seconds, let your car slow down, and then hit the gas again.



     
  14. WildBerry

    WildBerry IncGamers Member

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    Re: U.S. Presidential candidates and the federal gasoline tax

    Sounds like a plan. One more question, though.

    What will happen to the less traveled parts of the federal networks, the left-overs, if you will, that are not profitable in any sense? I don't know American road maps too good, so it's hard for me to say where such places would lie, but if you look at Finland with the knowledge that population density by province goes from 220 per square kilometer in south to 1,8 per square kilometer in north, you can figure how much taxing driving there would yield.

    Appropriate pruning of useless corners of the market and people leaving from their houses in the middle of nowhere, or am I missing some function here?

    I figured as much, I just picked it up as you mentioned it, as it sounded quite interesting a thought.

    I thought overinflating is never worth it; might be, though, that those black doughnuts are just cheaper there. You're right though, the bother of measuring the thickness every once in a while is just not worth it for Joe Average who doesn't sleep with his car.



     
  15. Holysinner

    Holysinner IncGamers Member

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    Re: U.S. Presidential candidates and the federal gasoline tax

    Well, I think as with any network, the utility and hence value increases as the number of nodes (in this case a slight variation, routes) increases. The seller (in this case, the federal government) could take advantage of this in determining which segments are auctioned together (if you want this potentially profitable section it's only available with this less-profitable section). Even if it created local monopolies (and since there are other roads besides highways for alternative routes, they wouldn't really be such), I wouldn't worry too much as you'd just be going from a government-mandated and operated monopoly to a private one (that isn't really a monopoly).

    If you really are interested in the idea of privatizing the highway system (or roads generally), it's a favorite topic among some libertarians, and I'm sure I could point you to discussions - though I know you're capable of locating them yourself. It's a topic that I haven't research in any depth, but as I agree with the libertarian philosophy I'm confident that if I were interested enough in the details I could find a workable plan.



     
  16. IntellectSucks

    IntellectSucks IncGamers Member

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    Re: U.S. Presidential candidates and the federal gasoline tax

    So in addition to exorbitant gas prices we would have to pay tolls to get almost everywhere? Ummmmmm, no thanks.

    I agree with the general opinion on lifting the gas tax-temporary solution designed to make politicians look good.


     
  17. AluminumKnight

    AluminumKnight IncGamers Member

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    Re: U.S. Presidential candidates and the federal gasoline tax

    Alright, having thought about it and reading up on this a little more (both here and various news articles), I'd like to modify my position a bit. It's not the oil companies fault that they can make so much money. As Bortaz said, this is the free market, and this is how it works. The CEO of Exxon-Mobil wasn't appointed to be fair to the consumer, he was appointed to make money. Can't blame them for doing that. I guess the problem lies within our dependance on oil. But now it's starting to get off-topic.

    Back on, while I don't think that the government always (eh, usually) makes the best use out of tax money, wouldn't you rather have that money going back into the roads rather than the pockets of executives?
     
  18. WildBerry

    WildBerry IncGamers Member

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    Re: U.S. Presidential candidates and the federal gasoline tax

    Good point, it'd doesn't have to be sold by the pound, seller has an option to at least nudge buyers to supporting the periphery. I could use a PM if you have some discussions handy, when I google-fu myself I just tend to find incredible shyte.

    But no road-associated federal taxes, think about it. City dwellers would be stoked, and in the essence it's more fair - it's paying for use in stead of paying by all.



     
  19. Holysinner

    Holysinner IncGamers Member

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    Re: U.S. Presidential candidates and the federal gasoline tax

    I shouldn't have mentioned the subject. I'd just point out that you are already paying to have the system expanded (in places you will never drive) and maintained; you pay for the license to drive on the public transportation system, and the registration for your vehicle. You pay interest on the debt that was taken out to pay for the system in the first place. The gas tax is just one small part of this, most of it is authorized in the transportation bill, which is disproportionally costly to the taxpayers in some states and localities relative to the benefits accrued to them. There is also the inefficiency inherent in the government determining where to expand rather than a private enterprise responding to market conditions and price signals, and countless other opportunity costs and inefficiencies.

    Edit:
    I'd PM you if I had much to offer, but as I mentioned I haven't delved into the subject in any depth. For the libertarian perspective, I'd start with the Cato Institute. Here's their page on Urban Growth and Transportation, and a direct link to a policy paper entitled Reforming U.S. Highway Policy. I haven't read it yet (will do so now) so I can't endorse it, and from the brief it sounds like it may be more about transfering responsibilies to the states rather than privatizing. I will PM if I can sustain the interest to look further.

    Edit2: Found another Cato paper that may be more to the point via Wiki's article about Private Highways. Go figure. If you want to look further afield, try this search results page.



     
    Last edited: May 1, 2008
  20. Tanooki

    Tanooki IncGamers Member

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    Re: U.S. Presidential candidates and the federal gasoline tax

    I'm not going to sit and read all the previous posts. I just want to say that roads and military are basically the only two things I think the government should be doing.

    Privatizing roads would be silly.
     

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