After oil prices hit yet another record near $120 a barrel on Monday, the presidential candidates have been bandying about a proposal made by Sen. John McCain to temporarily suspend the federal gasoline tax.
Here’s what McCain proposed during a speech on April 15, better known as Tax Day: “I propose that the federal government suspend all taxes on gasoline now paid by the American people — from Memorial Day to Labor Day of this year. The effect will be an immediate economic stimulus — taking a few dollars off the price of a tank of gas every time a family, a farmer, or trucker stops to fill up. Over the same period, our government should suspend the purchase of oil for the Strategic Petroleum Reserve, which has also contributed to the rising price of oil. This measure, combined with the summer-long “gas-tax holiday,” will bring a timely reduction in the price of gasoline. And because the cost of gas affects the price of food, packaging, and just about everything else, these immediate steps will help to spread relief across the American economy.”
McCain, the likely GOP presidential nominee, wants to suspend the 18.4-cents-per-gallon federal gas tax and 24.4-cents-per-gallon for diesel from Memorial Day to Labor Day.
Democrat Sen. Hillary Clinton also supports the idea. Here’s a gas prices ad targeted toward North Carolina voters ahead of their May 6 primary:
Clinton said she would recoup the lost tax dollars by imposing a “windfall profits tax” on oil companies. Here’s her full plan to address rising fuel prices.
On Monday, Clinton attacked Democratic front-runner, Sen. Barack Obama, for not supporting the idea.
“My opponent, Senator Obama, opposes giving consumers a break from the gas tax,” Clinton said at a North Carolina firehouse, according to the Associated Press. “I understand the American people need some relief,” she added, implying that Obama doesn’t get it.
Obama, who backed a similar measure as an Illinois state senator, argues that his rivals’ idea is “designed to get them through an election” and would not help struggling consumers in the long-run.
He ignored Clinton’s attack and focused on McCain’s proposal, saying that eliminating gas tax collection impact highway construction and cost the Tarheel State up to 7,000 jobs.
“This is his solution to the problems of the energy crisis and your gas bills,” Obama told several thousand at a noisy rally in Wilmington, N.C. “Keep in mind that the federal gas tax is about 5 percent of your gas bill. If it lasts for three months, you’re going to save about $25 or $30, or a half a tank of gas.”
Here are Obama’s Monday remarks on the gas tax holiday: