Letters to the Editor
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fundamentally wrong
There are big differences between the Illinois gas tax and the Federal one. The Illinois gas tax was assessed at the pump, so that actual consumers payed it in much the same fashion as a sales tax. It was also a percentage based tax and not a flat amount as is the federal tax. Therefore, the more expensive the gas prices got, the real dollar amount that the tax amounted to increased. Eliminating this tax actual had measurable effects for consumers since gas stations had no say in passing the savings on to consumers since consumers themselves were no longer paying it. Also, since gas prices were increasing rapidly, the tax would have only magnified those increases. Furthermore, at the time it was repealed gas prices had been so high the tax had already exceeded it's revenue projections so temporarily eliminating it wouldn't jeopardize highway funds which is one of the reasons legislators decided to give it a "holiday". The federal tax is completely different. It is paid by producers, not consumers and is therefore in effect, only a indirect tax on consumers. If this tax were suspended they wouldn't have any reason to reduce their prices or even if they did, the local pump stations wouldn't either since at both levels the opportunities to increase their profits are greater. A gas station could charge whatever they want and a consumer at the pump wouldn't know any better. Also, the treasury coffers have not already been filled by the tax since it is only halfway through the year (in this instance projections are based on usage, not the average price of gas as was the case in Illinois) so it would cause a shortfall. Lastly, Illinois did not reimpose a new tax to make up for suspending the other one which Hillary is suggesting. If they had say, suspending the gasoline sales tax and implemented a new gas station profits tax or something of the like, the gas stations would have just raised prices to make up for the new tax which would offset the gains made by suspending the previous one. That in of itself is the biggest flaw in Clinton's plan. She is sales costs but increasing production costs which would at best be a zero sum game. The only way to stop that from happening would be to actual fix the price that oil refineries can sell their gasoline for which has not been done since WW2. Economists and experts realize this and that is why they and Obama have overwhelmingly opposed this idea.
BTW, I am not some "elite" economist. I'm just a broke college student who hasn't even taking economics since high school.