The Mudcat Café TM
Thread #110904 Message #2331606
Posted By: artbrooks
02-May-08 - 07:09 PM
Thread Name: BS: McCain/Clinton and the Gas Tax.
Subject: RE: BS: McCain/Clinton and the Gas Tax.
I expect that this is currently being used as a practical exercise in Economics 101:
"If you decrease the price of gas by $.18 per gallon (the approximate amount of the Federal gasoline tax), what is the effect upon demand"? "Correct! Demand changes inversely with price, so demand would increase." "Now, what is the impact upon producers' profits of an increase in demand?" "Correct again!! More gas would be sold, leading to an increase in their bottom line. Profit, which is a percentage of the price per gallon, increases directly with increased demand."
Seems to me that this plan is a direct subsidy of the gas companies and OPEC. Even if Sen. Clinton's plan to enact a windfall-profit tax on the gas companies to make up for the lost road repair funds were to go through, I can't see how that would affect the extra $billions heading toward Saudi Arabia and Venezuela.