Letters to the Editor
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A bad analysis of a bad plan. Here is why.
There are a couple of trememendous flaws in George Frost's analysis of the Clinton gas tax elimination plan.
The first is the assumption that the infrastructure improvement funds which come from the gas tax will necessarily be replaced with a tax on windfall oil profits. Simply put, those are two separate things- an existing tax which can be easily cut (something which Republicans will cheerfully assist any president in doing in a heartbeat) and second, a windfall tax which Republicans will fight tooth and nail- and have already succeded in blocking once before- in the middle of a Democrat-controlled House and Senate!
It is all too likely that Republicans presented with such a two-step plan would "compromise" by allowing the tax cut and blocking the windfall tax, leaving us with an even more neglected infrastructure of crumbling roads and bridges.
That same crumbling infrastructure- which needs to be repaired with funds that ultimately must come out of the public pocket, one way or another- may be one of the reasons why Obama stated that the consumer ultimately did not save as a consequence of his own experiment with eliminating the gas tax.
Even in the best-case scenario on record (which Frost so happily provided), consumers wound up losing a whopping forty percent of the savings they were supposed to get as a consequence of the tax's removal- which means that, even in the best case scenario, consumers will save far less in the short-term than Clinton claimed.
It gets worse. Oil companies have not shown the slightest inclination- even while garnering record profits- to release the gasoline inventories which Frost claims they will release to absorb any increase in demand while keeing prices stable. on the contrary, Mr. Andrew Leonard of How The World Works has released several articles stating that the failure of oil companies to do so may be an indication that they no longer have confidence in their ability to match increased demand with increased supply. If that is true, they certainly will not release their inventories when the price of oil can continue to rise to astronomical levels. And the Clinton tax cut plan makes no requirement that they do so.
So where does that leave us? Well, it leaves us with the choice between a two-step plan which may backfire spectacularly (Clinton's) and the single-step plan which Barack Obama has been advocating for months- keep the gas tax to repair our infrastructure, and push as hard as possible for a windfall tax on oil companies so that eventually we can break the Republican gridlock.
That may seem ironic, considering Clinton's posturing as a 'partisan' Democrat and Obama's as a 'unifying' Democrat, but it is consistent with their political careers on the whole- Obama held fast when it counted the most, while Clinton got hoodwinked, even when chorues of people tried to give her good advice. Ultimately, some experts are better than others.