OH MY GOD!!! A POLICY QUESTION!!!

[last1standing]

I know GDP is supposed to be reserved for serious issues that affect the nation like sermons and dodging bullets, but I'd like to know what everyone thinks about the Clinton camp's proposal for a gas tax holiday and their desire to tax excess profits by the oil companies to make up the difference.

Myself, I think that a windfall tax is needed but that reducing or eliminating the gas tax would actually make the problem of supply worse, not better. Its also unlikely to have any real effect in lowering the total cost to the consumer.

Anyone else want to take a break from the latest "bullshitgate" and offer up an opinion?

[Johnny__Motown]

1. There is another thread up about this.. I posted my opinion there

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x5743008

[last1standing]

4. That thread focuses on the Clinton commercial. I want to specifically discuss policy.

Thanks though. :)

[Johnny__Motown]

12. OK, then. IMO it is idiotic, thanks for asking

[last1standing]

13. LOL! Good enough for me.

I hope you know I wasn't trying to be snarky with you. I just feel the other thread is more slanted toward discussing the ad, not the policy itself.

[nebula]

2. The minute the tax is lifted

the price of a barrel of oil will go up just as much anyway. its a stupid idea.

[rpannier]

3. I agree with you

That tax pays for road improvements, maintenance, etc

But, it'll be popular in many quarters and it'll be sold as something designed to benefit the poor

[crankychatter]

5. all taxes are always passed on to consumers, no exceptions

yup

it's not dissimilar from the differences between the candidates on the health insurance question

obama wants to address the underlying issues

clinton wants to put a big insurance band aid on arterial bleeding

we both know who pays

[babylonsister]

6. McCain and Clinton are pandering for votes, knowing there

won't be a whole lot of savings. But don't tell anyone!

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=108x129999

[ayeshahaqqiqa]

7. Windfall profits tax, si. Gas tax cut no.

Gas taxes pay for road upkeep. Our infrastructure is falling apart fast enough as it is without getting a "boost".

[bhikkhu]

27. An argument for "there is no such thing as a corporate tax" exists

That is, all corporate taxation is passed directly to consumers, so corporate taxes are really another form of general taxation on those who use the corporation's product. Which is all of us.

[last1standing]

28. It's theoretically possible to do but realistically unlikely.

Congress just doesn't have the backbone and the oil companies are too powerful. That's not to say it isn't needed, but it still won't happen.

[Kool Kitty]

41. Agreed.

[oviedodem]

8. the windfall tax will NOT get passed and she knows it. Most economists and pundits

say the gas tax break is a economic mistake and political pandering.

[last1standing]

15. You're probably right about the gas tax.

It's a shame but the likelihood of passing something of that nature when the oil companies have unlimited funds to lobby with is not good.

[Zhade]

9. Policy is important, but so are blatant lies (like clinton dodging nonexistent sniper fire).

Honesty IS important.

Now, on the topic - anyone discussed a PAYROLL TAX holiday? I know Gore talked about it within the last year or so.

[Indydem]

10. Here is my solution: (cross-posting)

If you are trading crude oil on the commodities market, you are arrested, tried for treason, and if convicted, you are sentenced to death.

Problem solved.

That is the root of this problem. Oil companies are making such a profit because it costs them $.50 to get the stuff out of the ground, and then they "sell" it to their own refining operations at the commodity rate. In the mean time, jackasses with more moeny than they know what to do with are running up the cost of crude to make a dollar on the backs of their fellow Americans. And to top it off, light sweet crude is coming from terrorist supporting nations like Saudi Arabia, which get to rake in the profits off their oil fields, again, because of commodity traders.

[barack the house]

11. Yep, Hillary has put forward to eco damaging ideas nuking iran and no gas tax...

The gas tax pulls in revenue if removed the oil companies would raise cost to limit demand. Obama's plan is a genuine tax cut for the middle class to put the money in pockets.

[KSinTX]

14. The policy is a 'feel good' that speaks to Clinton's actions vs. rhetoric

In truth, it's nothing more than economic rhetoric. McCain has proposed the same thing but it does nothing to lower costs, provides a margin into which prices can expand and since it's a temporary hiatus, increases the cost of fuel that much more once the tax is re-imposed. Oh, not to mention it doesn't address the windfall profits. A tax on all their houses, I say.

[last1standing]

16. I noticed that even Krugman has come down against this idea.

http://krugman.blogs.nytimes.com/2008/04/29/gas-tax-follies/

I’ve been on the road (actually doing a public dialog with Barney Frank on financial reform), so I’m just catching up. Anyway, 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.

Is the supply of gasoline really fixed? For this coming summer, it is. Refineries normally run flat out in the summer, the season of peak driving. Any elasticity in the supply comes earlier in the year, when refiners decide how much to put in inventories. The McCain/Clinton gas tax proposal comes too late for that. So it’s Econ 101: the tax cut really goes to the oil companies.

He makes sure to get a jab in on Obama at the end but that's politics for you. :)

[Spider Jerusalem]

17. Gas tax holiday = brain-damaged idiocy and meaningless pandering.

Federal fuel taxes pay for highway infrastructure maintenance. This is a Good Thing; anyone who wants to shortchange the funding for that so people get back 18�¢ a gallon is not making a sound proposal.

And the idea of a windfall profits tax isn't a reasonable one either, honestly; oil companies are experiencing record profits because the price of oil is at record highs. This is because of increased demand and stagnant supply, not because of price-gouging; a solid majority of the world's major oil provinces are experiencing production declines. Profit margins for the oil industry are still at about eight percent, which is comparatively low when measured in relation to other industries; and any 'windfall profits' tax would just cause the price of fuel to go HIGHER when it''s passed back to consumers. Neither idea makes any economic sense.

[last1standing]

18. I disagree with your hypothesis on windfall profits.

At least I do in theory.

If, after paying taxes on windfall profits, the oil companies merely raised their prices the government could tax them again, just as easily as the first time.

Of course in reality, on the massively off-chance that one windfall tax was passed, another tax would never make it through congress, so I'd say you're wrong in theory and correct in practice. Sadly, that means you're right on this one.

[southerncrone]

19. Like trying to kill a tiger with a feather.

This is a Repuke ploy. No wonder Hillary has jumped on board. I do agree that gas should be lowered, but she does not have the power to assess a tax on the oil companies; that would take an act of Congress. ;)

The problem is not that the taxes have risen on gas, it's that the oil companies are raping the consumer financially. The gas taxes actually return something back to us in the form of road improvements & jobs to maintain the roads.

Rolling back the gas tax for only 3 months will only make the pill harder to swallow when they are added back. It will seem like another larger jump in price. The savings to the average family would be under $50. Again, the taxes are NOT the problem. Oil company greed IS the problem.

Congress needs to cap the price last year! If they cap it now, the oil companies will still make out like the pirates that they are. Capping the price now would at least let the American consumer budget better. As it stands now, all of our discretionary income will be going into big oils pockets via our gas tanks.

[last1standing]

20. I know the concept is unpopular but I think we need to raise the tax.

We should do it incrementally until we find out the exact price point where demand begins to decrease. Then we should hold it steady or increase it, again incrementally, to force the oil companies to reduce their prices in order to keep up demand.

Extra tax revenues should be used exclusively to repair our dilapidated infrastructure, create real mass transit and research new forms of energy.

[southerncrone]

31. I could go for that. But

the research for new forms of energy should not be to "subsidize" the oil companies!
We see how THAT works. They take the money & run.

There must also be accountability. This research funding should only be to universities & new companies that focus ONLY on alternative energies.

[last1standing]

37. There was a time when we had government researchers.

Government research was able to develop nuclear bombs in the 40's so I'm sure they could manage alternative energies today.

It's amazing how much we've lost in our rush to privatize everything.

[southerncrone]

40. Yes, we have lost control of those who are supposed to regulate.

Outsourcing has resulted in our giving up control over our needed services.

[lmbradford]

21. I agree with you

[last1standing]

22. Thanks,

n/t

[last1standing]

23. Strange. Not a whole lot of people care about policy, I guess.

Maybe I'll go and post something about which candidate lies best and see if that attracts any takers.

[JackORoses]

24. Why not just forego the Gas Tax nix, and focus on the Windfall tax now

Create a 'Robin Hood' program which takes those windfalls and distributes them to the Public in the form of rebate checks.

[last1standing]

25. Personally, I think tax rebate checks are bad policy.

The money that the government is sending out now would be better spent on work projects that actually hire people and provide needed services that we currently lack. Instead we get a lump sum that will go into paying down bills or purchasing foreign goods, neither of which will help our economy in the slightest.

I wonder how many people that tax rebate could have hired providing wages and healthcare?

[Strelnikov_]

35. And infrastructure, which are investments in the future

Water systema, wastewater systems, electric powered transportation, etc. etc.

[last1standing]

26. It's interesting that not one person has posted in favor of the gas tax holiday.

One person suggests lowering it, but no one has come out in support of actually removing it, even temporarily.

Was this move a bad decision on the part of the Clinton campaign?

[IndependentDem]

30. probably not a bad move on the part of the Clinton/McCain campaigns...

because many common americans probably don't "get" the complexity of the issue. They just think, "Hey, less tax means cheaper gas-- I don't like paying taxes anyways." Thats the problem with this type of shit-- too many people don't care about or don't understand what is really going on... Even here on DU (GDP primarily), we have started to care more about flame bait and bullshit than actual issues. Its sad really.

[bhikkhu]

29. The only thing that will help people even marginally:

Reduce consumption. Note that this doesn't actually reduce the price - as this is set by the world market where net demand will only decrease in a recession - but a person who reduces their gasoline consumption by a third, for instance, will reduce their gasoline bill by one third.

I think Carter said something to this effect...and maybe that's partly why themes from Reagan on are something like "the American people are entitled to cheap gas, and it is the job of government to see that they get it".

[last1standing]

38. The question is how do we reduce consumption?

The only ways I can think of are rationing and price increases. Rationing would lead to a black market economy so I wouldn't suggest that one. By increasing taxes, however, we not only decrease consumption we gain needed funding for mass transit, infrastructure and alternative energy research.

[clevbot]

32. i think its a bad idea

i think we need those taxes to help fixing our bridges and roads, we need to start working on alternative energy source.

[EffieBlack]

33. WHERE?!

[last1standing]

39. I'm sorry. Perhaps I should have brought Jeremiah Wright into the discussion.

Would that make it a "real" policy issue for you then? :eyes:

[Strelnikov_]

34. For better or worse, the system is rationing by price

If the price goes down a bit, demand will probably increase, therefore the price of the commodity will increase to bring demand into equilibrium with supply.

Or, barring Econ 102, the petroleum product suppliers will just jack up the price an equivalent amount to the tax savings.


If anything, we need a tax increase, with the revenues dedicated to beginning the creation of an electric powered transportation infrastructure.

[last1standing]

36. Agreed but we're going to need a better source for our electricity as well.

Coal is going to end up right where oil is now and so far there's been no serious research into alternative power sources since the Carter administration. Thats part of what a tax increase could provide.

[Armstead]

42. I'd like to see eitehr of them go for emergency price controls

Stop allowing the oil monopolies and the speculators to line their pockets by destroying the economy.

Rather than a phony "gas tax holiday" I'd rather see them go after the systemic causes of this. There is no reason to allow price gouging and profiteering.

--------

From the website of Sen. Bernie Sanders:

Outrageously high oil and gas prices that Vermonters and Americans are paying constitute a national emergency that requires a bold response from the White House and Congress, Senator Bernie Sanders said Thursday. “It is clearly unacceptable that with gas at the pump at $3.50 a gallon and home heating oil outrageously high, the big oil companies like Exxon-Mobil are raking in huge, record-breaking profits and hedge fund managers are making billions speculating on oil futures. Today, senate colleagues and I demanded that Saudi-Arabia and other OPEC countries stop their collusion, and increase oil production – which should put more oil on the market and lower prices. But this is just one step in terms of what we have to do. Washington has got to step up to the plate and begin protecting American consumers,” Sanders said.

Sanders said millions of workers are seeing a steep decline in their standard of living because of high gasoline pump prices. Many older Americans, he added, will not be able to heat their homes next winter unless heating fuel prices are lowered. He also noted that energy costs impact the entire economy, including rising food prices. “While energy prices are soaring,” Sanders said, “big oil companies are reporting record profits and speculators at hedge funds and financial institutions are making billions investing in energy futures.”

Sanders is working with other senators on both long-term and short-term solutions to the energy crisis which include:

• Imposing a windfall profits tax on the oil and gas industry. Last year, Exxon-Mobil made $40 billion in profits, more than any company in history. Since President Bush has been in office, the five largest U.S. oil companies have made more than $500 billion in profits. Oil companies should be allowed to make a reasonable profit, but anything above that should be significantly taxed. This will take away the incentive of big oil companies to rip-off Americans at the gas pump. It is time that Congress and the President said “No” to the $213 million in campaign contributions that the oil industry has given to them since 1990 and “Yes” to consumers by taking this important step.

• Closing the “Enron Loophole.” Energy trading exchanges that were exploited by Enron and continue to be abused by other energy traders who are manipulating the price of oil should be re-regulated. Today hedge funds and speculators are making billions in an unregulated climate by bidding up the price of oil. Some experts believe that speculation is increasing the price of oil by 20 percent to 30 percent.

• Stopping the flow of oil into the Strategic Petroleum Reserve, and immediately releasing oil from this federal stockpile to reduce gas prices. This has worked in the past. When President Clinton released oil from this reserve in 2000, the price of gasoline immediately fell by 14 cents a gallon. When the first President Bush released oil from the reserve in 1991, the price of crude oil dropped by $10 a barrel. The time has come to do this again.

• Breaking up OPEC. OPEC is an illegal price-fixing cartel that is clearly in violation of international free trade rules. The president must file a complaint with the World Trade Organization and demand the dismantling of OPEC. The ending of collusion with regard to oil production will result in increased production and lower oil prices.

• Authorize the president to impose price caps to stabilize prices in the event of market manipulation. Today, the Federal Energy Regulatory Commission has the authority to impose temporary price caps on electricity. When it used this authority to deal with the California energy crisis created by Enron, electricity prices fell dramatically. The president should have similar authority over gas prices.It is clearly unacceptable that with gas at the pump at $3.50 a gallon and home heating oil outrageously high, the big oil companies like Exxon-Mobil are raking in huge, record-breaking profits and hedge fund managers are making billions speculating on oil futures. Today, senate colleagues and I demanded that Saudi-Arabia and other OPEC countries stop their collusion, and increase oil production – which should put more oil on the market and lower prices. But this is just one step in terms of what we have to do. Washington has got to step up to the plate and begin protecting American consumers.

Also on Wednesday, Sanders joined Senator Charles Schumer at a Capitol press conference where they released a letter calling on the Bush administration to use its leverage with the members of the Organization of Petroleum Exporting Countries to increase oil supplies or risk Congress holding up multi-million dollar arms deals with Saudi Arabia, the United Arab Emirates and other OPEC members. As Americans are paying more than ever to fill up their cars at the gas station ($3.50/gallon on average for regular gasoline), it is clear that oil production by OPEC members is below the capacity at which they could be producing. As a result, higher oil prices are affecting U.S. consumers from the gas pump to the grocery store. The Bush Administration has refused to be tough with so-called OPEC allies and in fact continues to provide huge arms deals, despite the economic pains taxpayers are feeling.

[last1standing]

43. That reminded me of something Josef Stalin said.

"A single death is a tragedy, a million deaths is a statistic."

In this case it would be "Stealing a loaf of bread is a crime, stealing the livelihoods of a billion people is business".

These corporations are above the laws because they own the politicians. There's no one out there who could run against the kinds of money the oil companies could throw against them and they all know it. That's why I think a tax increase would be the better solution. The oil companies are going to make sure they get their profits but at least we could control consumption and funnel the revenues into solutions for our problems.