Lauren RabainoAs the presidential primary season drags on long after most expected it to end, potential nominees continue to duke it out for the critical remaining delegates. The Democratic race is still up in the air, and Obama and Clinton are slowly inching up toward the 2,025 delegates needed to clench the nomination. As if on queue, the price of oil has also begun its yearly ascent.
American summers have always been marked by steep oil prices, but recent record-setting highs have prompted presidential candidates to make the issue of oil availability a central point of their campaigns. Both John McCain and Hillary Clinton have proposed a “summer gas tax holiday” to alleviate the painful price crunch of the coming months. This article will focus on Clinton’s plan, since it is one of the most pronounced policy differences between her and her rival, Barack Obama.
Clinton envisions a period from Memorial Day to Labor Day during which the federal excise tax on fuel would be suspended. This move would save consumers 18.4 cents for each gallon of gas they purchase and 24.4 cents for each gallon of diesel. According to Barack Obama, who opposes the plan, the average American driver could expect to save about $30 over the summer. But $30 is not going to solve any real problems. If implemented, the plan will almost certainly do more harm than good.
Environmentalists oppose the idea because it might encourage motorists to use more gasoline. A reduction in the price of fuel could result in increased carbon dioxide emissions into the atmosphere. This would have an adverse effect on the stability of our climate. We should not create the illusion that oil is easily obtained, that it is inexpensive, or that it is OK to burn more of it than we already do. We simply do not have enough oil to enact policies that discourage conservation. The plan is a terrible idea from an environmental perspective.
Just as troublesome as the possible damage to our environment are the potential implications of the plan for roadway infrastructure around the United States. The Federal Highway Trust Fund is the primary recipient of fuel tax revenue. The fund distributes tax money from fuel purchases to state and local authorities to build and maintain transportation infrastructure across the United States. Clinton’s gas tax holiday would divert billions from the fund. She claims this revenue could be recaptured by imposing a “windfall profits tax” on oil companies. Unless she can get her tax policy from the drawing board onto paper and past legislators in record time, the highway construction industry could stand to lose a great deal of funding. That money is crucial to the safety of American motorists. Industry insiders estimate that thousands of highway construction jobs could also be lost.
Environmentalists and people who enjoy driving on roads are not the only ones who have taken issue with Clinton’s proposal. Many economists have also voiced their strong disapproval in the past few weeks. If the windfall profits tax were to be imposed, experts argue that oil companies would make up the money lost in taxes by charging more for petroleum products. That means it is likely the windfall profits tax would result in even higher profits for oil companies!
New York Mayor Michael Bloomberg, of Clinton’s own home state, called the proposed gas tax holiday “about the dumbest thing I’ve heard in an awful long time, from an economic point of view.” When recently asked if she could name an economist in support of her plan, Hillary responded, “I’m not going to put my lot in with economists.”
Clinton’s proposed gas tax holiday is a clear case of election year pandering. If the tax holiday were to take place, it would increase profits for oil companies, rob funding from American highway and bridge projects, and encourage increased carbon dioxide emissions. Oh yeah, it might also save you $30 this summer.
Thanks, Hillary.
Matt Hutton is an environmental engineering senior, member of the Empower Poly Coalition and Green Spot columnist for the Mustang Daily.