McCain & Clinton buying votes
As the race hots up for the next primaries in North Carolina and Indiana you’re going to hear a lot about “a gas tax holiday.” That’s because Hillary Clinton has jumped on the McCain bandwagon and is proposing to cut taxes on petrol, which the Americans call ‘gas’, for the 3 months of summer. British readers facing the prospect of paying £1.50 a litre may look enviously as Americans baulk at paying $4 a gallon, and would probably love to see taxes on petrol cut too, but economists agree that the ‘tax holiday’ plan is a very bad idea indeed.
The problem with the plan is that the moratorium on the 18.4-cents-per-gallon tax is unlikely to be passed on to consumers, but pocketed by the oil companies. It might even increase petrol prices at the pump, because the price is mostly determined by tight supply.
The battle is now on for Barack Obama, who opposes the plan, to explain the reality of what is likely to seem like money for nothing to voters. In effect he’s asking them to vote for higher taxes, or at least that’s how it will probably look to many. It could hardly be a more difficult proposition if McCain and Clinton were to hand out Dollar bills, rather than try to buy votes using Federal money.
Obama isn’t shying away from the task though, quite the opposite. As the video above shows, he’s linking the plan to a more central theme - that the “old politics” of gimmicks is symptomatic of all that’s wrong with Washington. Instead he’s trying to push his policy of levying a windfall tax on the oil companies and cut taxes on “middle income” families by $1,000.
He’s also gone on the offensive politically by publishing statements by two former Clinton administration Energy secretaries slamming the proposed tax break. One of them, New Mexico Gov. Bill Richardson, called it “a shameless political ploy that would do nothing to help American families.” The other, Federico Pena, called it “the kind of pandering that insults people’s intelligence.”
It’s a tough sell all the same, but one which may pay long term benefits as superdelegates are likely to be impressed by the principled stand based on sound economics. The voters however aren’t known for voting for perceived higher taxes in America any more than they are in the UK.