George Frost in Salon:
During one state Senate floor debate, Obama joked that he wanted signs on gas pumps in his district to say, "Senator Obama reduced your gasoline prices."
Now, running for president, Obama says the tax reduction was a complete failure, and that "the oil companies, the retailers" ended up benefiting most because they raised prices by the entire amount of the tax cut.
"I voted for it, and then six months later we took a look, and consumers had not benefited at all," Obama said. Having learned this hard economics lesson from his Illinois "mistake," Obama now argues that a federal tax holiday also will fail for the same reason -- the oil companies will take it all.
But Obama is wrong. He did not learn this lesson. In fact, the only scientific study done on the pass-through of the tax holiday savings to Illinois consumers (and those in Indiana, as well, whose citizens enjoyed a similar holiday) found that it actually worked to a large extent.
The study is titled "$2.00 Gas! Studying the Effects of a Gas Tax Moratorium," by Joseph J. Doyle Jr. and Krislert Samphantharak. Download the PDF here. The authors concluded that "the suspension of the 5% sales tax led to decreases in retail prices of 3% compared to neighboring states. And when the tax was reinstated, retail prices rose by roughly 4%."
This suggests that the tax holiday delivered at least 60 percent of the tax savings to motorists.
But wait!
A gas tax holiday works in fact, but will it work in theory?
Who cares?
The next President should be able to do like FDR did -- try something, anything, to help people.
Naturally, the creative class Bullshit Artists don't want to do that, because their theories are what make them who they are.
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I cracked up
"A gas tax holiday works in fact, but will it work in theory?"
That's an awesome quote. In fact, the formula is something you can use for so much of economics.
The New "Creative Class" Would Rather Discuss Theory
than provide solutions.
This whole exercise reminds of a time I worked in an accounting department of a Fortune 500 company. We were having major problems reconciling one of the branches books. The "Creative Class" in the department had already spent 3 hours theorizing about what might be causing the problem. They were still going strong when I picked up the phone, called the branch and asked them what they were doing with the particular transactions in question. 10 - 15 minutes on the phone talking to "real people" identified the problem and how to fix it.
works in fact but will it work in theory?
I don't know - we're still ideating...
OK - removed the advertising but it makes the point...
OK - I am putting the embedded video back in then
They work...
Change your Input Format to Full HTML and paste in the OBJECT tag. Use P around paras.
[x] Any (D) in the general. [ ] Any mullah-sucking billionaire-teabagging torture-loving pus-encrusted spawn of Cthulhu, bless his (R) heart.
"First they ignore you, then they ridicule you, then they fight you, then you win." -- Mahatma Gandhi
thanks...
learned something about drupal then...I just set up company's CMS system on drupal 6 this weekend...
revised
No advertising, please....
Unless we can bill for any traffic...
[x] Any (D) in the general. [ ] Any mullah-sucking billionaire-teabagging torture-loving pus-encrusted spawn of Cthulhu, bless his (R) heart.
"First they ignore you, then they ridicule you, then they fight you, then you win." -- Mahatma Gandhi
I wasn't clear....
... and I'm going to bed because of that but:
1. Ideate fine. If there's a problem, You Tube will turn it off.
2. Company CMS not fine -- that was the advertising I meant.
[x] Any (D) in the general. [ ] Any mullah-sucking billionaire-teabagging torture-loving pus-encrusted spawn of Cthulhu, bless his (R) heart.
"First they ignore you, then they ridicule you, then they fight you, then you win." -- Mahatma Gandhi
we're a non-profit
providing mental health treatment/residences...I hardly think that you would have a problem with that.
Oh and our clients are all AHCCS (Arizona version of Medicare/Medicaid) - government supported, low income in case you were afraid that I might have been recruiting customers from Corrente readership (though probably many would qualify if they were AZ residents).
Slippery slope
To me, right now, it's an ad. I've been here before, WNZ, I really have. Please revise.
[x] Any (D) in the general. [ ] Any mullah-sucking billionaire-teabagging torture-loving pus-encrusted spawn of Cthulhu, bless his (R) heart.
"First they ignore you, then they ridicule you, then they fight you, then you win." -- Mahatma Gandhi
ideating....Krugman says Obama misquoting him
Krugman speaks out. "If the Obama people are suggesting otherwise they are being deliberately dishonest."
"The great divide in this country is not by race or even income, it's by those who think they are better than everyone else and think they should play by a different set of rules," --Bill Clinton
http://www.correntewire.com/ye_olde_writ... fiction link
Study follow-up
Doyle doesn't sound all that excited about the plan, actually:
full cite.
Don't get me wrong - $20 can be a boost. But I don't think this is quite such a knock-out.
Nobody ever claimed it was a knockout
The Obama ______ ers say it won't work, and sneer and snicker at people to whom $30 really means something. They're wrong on the facts.
[x] Any (D) in the general. [ ] Any mullah-sucking billionaire-teabagging torture-loving pus-encrusted spawn of Cthulhu, bless his (R) heart.
"First they ignore you, then they ridicule you, then they fight you, then you win." -- Mahatma Gandhi
Here is some simple economics to explain this debate
The marginal cost of Hillary's plan is nothing because the plan pays for itself.
The marginal benefit of Hillary's plan may only be 15-20 dollars per person. That clearly is not significant to some people, but to those most in need, it could be very significant. Considering that the cost is nothing though, economically speaking it doesn't matter how large the benefit as long as there is one.
Obama wouldn't vote for a cap on credit card interests rates because he claimed it was set too high, basically meaning people got no relief at all. Now he opposes the gas tax holiday because the benefit is not enough, meaning people get no relief at all. Incidentally in both cases his vote winds up benefting industries which he raises a a lot of money from. Now that is change we can believe in!
Gelding the filly (As if!)
Professor O!'s Lekon 101: Frosting the cake on your family's dinner table
One Additional Potential Benefit
Let's say the gas tax holiday lowers gas prices by ten cents a gallon or even five cents a gallon, do we think at the end of the summer folks are going to want to re-institute the tax or leave the windfall profit tax on the oil companies? If it's the latter, then haven't we just gotten rid of a regressive tax (at least part of the burden of it) and replaced it with a more progressive tax? Why does any democrat think this is a bad thing? Since when do we defend regressive taxes over more progressive taxes, albeit ones that might have a small real world impact.
Democrats have a tendency these days to defend whatever
position helps their chosen one politically, without any regard for whether it is good policy or politics. It is possible you could agrue that the windall profits tax is still regressive to a degree because the cost of it could be passed onto consumers, but they are going to bear that cost anyway now under the current system, so I don't really see why that matters. You might suggest that a legitimate progressive argument against this is that it would increase gas consumption which is bad, but that is a rather weak argument in my view because the demand for gasoline is fairly inelastic in this range from all indications meaning the change will not affect gas consumption much at all. Apparently the estimates I have read is that you would have to make the gas tax $2-$3 a gallon to really impact consumption. I don't see Obama proposing that, and I have a bad feeling that if he is up against McCain they are going to accuse him of supporting such an idea because of the position he has taken on this debate, and even if he opposes that he will be portrayed as being hypocritical because all his claims of telling people the truths they don't want to hear will be exposed for the lies they are.
"passed on to consumers"...
is a canard.
Sure, they could price things any way they want to, but that's the whole point. The government is collecting tax from the corporation, the corporation can do whatever it wants to make up that money, including cutting dividends, selling stock, improving efficiency, or a zillion other things. Moving the point of tax collection from the pump to the oil company does in fact make the tax burden less regressive.
Arguing that "they'll just raise prices on the consumer so it's regressive" is like arguing that raising income taxes on rich people is regressive because they'll cut the pay of their servants to make up the tax increase.