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Wednesday, July 30, 2008 12:00 AM

Obama's energy rebate proposal

McCain has his gas tax holiday. Obama proposes sending more checks to help deal with the energy crunch. What's the difference?

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Wednesday, July 30, 2008 09:37 AM

As more than one Obama supporter insisted to me, the McCain/Clinton gas tax "holiday"

(which was dead in the water months ago, afaict) was PANDERING (a BAD thing) because the amount involved was so small ... and Obama's checks -- being bigger -- might be an "economic stimulus" (A GOOD THING)...

The whole "we can't afford it" complaint wrt to the McCain/Clinton tax "holiday" having vanished like the morning mist when piddling pandering is trumped by Bush-like economic stimulus.

This winter's heating energy crisis won't hit in full measure before the election, but it may well be a doozy -- I'm already saving up for it.

Wednesday, July 30, 2008 09:41 AM

Yes, Let's just use less oil

Obama is smart though to offer rebates. But how will we pay for it? The gas tax holiday OTOH is sheer nonsense and everyone knows the benefits will be "psychological" anyway. Thanks for that gem McCain.

Wednesday, July 30, 2008 09:46 AM

I disagree

While I agree with many of the things you've said in your post, you miss the truly vital difference between the two proposals. In Obama's proposal, the government can collect the tax and give it back to people (the definition of who is deserving is something that reasonable people can disagree about). Mr. McCain's proposal would likely never reach anybody but the refiners who are financially hard pressed by rising oil prices and the retail dealers who are equally hard pressed by rising gasoline prices.

Wednesday, July 30, 2008 10:00 AM

rebates..no

Just say no to rebates for gasoline for cars. Obama should figure figure out to provide cost break on hearing oil for fixed income and workng class, but don't give them rebate checks.

We need to discourage people from driving large gas guzzling vehicles and wasting gas.

Wednesday, July 30, 2008 10:02 AM

Real Market Based Solutions, Not "Free Market" Platitudes

The two proposals actually differ wildly. Obama is actually putting forward the type of market-based solution favored by many economists. You wouldn't want to distort the market by actually lowering the price of fuel when its providing a clear signal for consumers to change their behavior. Doing something to lower the cost of fuel, like a gas tax holiday, merely subsidizes unsustainable behavior among those most able to afford to make changes - fairly well-off drivers of autos that guzzle fuel.

Instead, you leave the market alone to provide it's signal to adjust behavior while providing assistance to those least able to afford making the quick transition to new behaviors. This type of proposal doesn't create distored incentives. It is a progressive, market-based solution, rather than a regressive market-distorting solution favored by McCain and many supposedly "free-market" republicans for whom that term is just a pavlovian platitude.

He won't go this far during the election but the logical endgame is an increase federal fuel tax by charging a percentage of the sale price, just like sales tax. Then rebates are provided to people under a tiered formula which factors in income, miles claimed as a work related expense on a tax return, etc so that the two roughly cancel each other out revenue wise after taking out some cash left over to promote fuel economy by fixing our crumbling infrastructure. That actually reinforces the market signal for consumers to consume less fuel.

In the end, this gets back to Goulsbee and behavioral economics. It makes it easy for consumers to do the right thing. Reading between the lines of this type of proposal should give you a lot of faith in the kind of real, market-based "change" Obama is proposing compared to McCain's pandering.

Wednesday, July 30, 2008 10:02 AM

The most obvious "trickle down" good would be to subsidize the trucking industry's gasoline

in order to brake some of the "transportation related" price hikes ...

Then there are other gasoline dependent services and jobs -- school buses, rapid transit, taxis, ...

and the agencies that are reportedly hurting badly ... like Meals on Wheels ...

I'd save the bulk of any proposed "rebate" for low-income heating assistance this winter which (with steadily increasing unemployment and trickle-down job losses) will gobble up those dollars.

pray for a warm winter.

Wednesday, July 30, 2008 10:04 AM

Rebates

Obama is proposing a direct payment to the consumer who may use it for energy or other living costs.

McCain is reducing a cost of doing business for the oil companies and retailers in the irrational hope that some of it will trickle down to the consumer.

One is a general stimulus package, the other a fantasy.

Wednesday, July 30, 2008 10:04 AM

Visiting relatives in cold climates

Have you ever visited a relative in a cold climate in the winter. My experiences visiting r3ealtive sin the mid west...they keep their houses too warm anyway. So hot you cannot breath. It is refreshing to get out in the freezing cold to get a breath ofr fresh air. Turn down the heat. Shut off the air conditioner

Wednesday, July 30, 2008 10:15 AM

A modest proposal

The rest of the world seems to understand that higher gas prices, achieved through imposing by-the-gallon taxes, results in more rational consumption of scarce resources.

My suggestion would be to increase the gas tax and provide an offsetting rebate to the lowest income taxpayers. The total cost of the rebate should be calculated to be roughly equal to the additional gas tax revenues. That way, you discourage gasoline consumption while helping the poorest pay the additional cost.

Gasoline prices will fluctuate from month-to-month, but the long-term trend is up. The recent flirtation with $5 gasoline provides strong evidence of demand destruction at high prices. If we establish a policy that the gas tax will increase by a set amount annually, say $0.25 per gallon per year for the next 10 years, people will learn to conserve. Yes, the price per gallon will increase but the increase will be staying in America and not going to OPEC countries. The gradual nature of the tax will make it possible for people to take fuel efficiency into account in their auto purchasing decisions.

I make this suggestion as someone who did not benefit from the recent Bush "stimulus package" and probably would not receive an energy rebate. I figure my gasoline consumption last year was about 800 gallons, but I have already taken steps to reduce that consumption over the past couple of months.

Wednesday, July 30, 2008 10:18 AM

Why not a tax credit for energy saving purchase, instead.

Instead of giving money to allow people to keep driving their gas-hogs,he should propose a tax credit for low-income taxpayers buying a fuel efficient car/furnace/AC.

Wednesday, July 30, 2008 10:40 AM

The problem with tax credits and rebates is that they ignore the large number of people who do not pay taxes

the elderly, children, the disabled, the unemployed, etc. There are surprising numbers of these people. Most are on fixed income and have to simply "do without"

The energy savings of energy-saving appliances and vehicles probably don't need extra-sweetening at this point, however, virtually all require credit to qualify for purchase ... and many assume home ownership (not too many renters replace the provided appliances, heating systems, etc.)

The full desperation of the mortgage crisis combined with slowly rising unemployment and inflation impacting each individual's debt load will accelerate when heating prices soar this winter.

This isn't about over-warm living rooms. This is about utilities being turned off for non-payment.

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