Is the "GAS TAX HOLIDAY" a bad idea?

[STANG RED]

Go read this very interesting article I ran across on MSN.

http://www.msnbc.msn.com/id/24411755/

I hope that link works.

Here is just one little paragraph from that article that does make a lot of sense.

Eliminating the federal tax, about 18 cents a gallon, would encourage more driving, putting added pressure on supplies, and driving the underlying price of gasoline higher. Since gasoline taxes go to pay for rebuilding crumbling roads and bridges, this is probably not a good time to do away with them.

Go read the article first, then come back and tell us what you think. It's well worth your time to read.

[Blastoderm55]

I don't like the idea. Its short term benefits are far outweighed by the long term ramifications. As one auto maker, lower fuel prices won't be beneficial in the long run so long as our consumption is so high. He went so far as to suggest that $6 per gallon gasoline could be the magic number that finally catapults our society into action. I hope we don't get to that point.

[Reds fan]

Not a bad idea...just won't make a big difference either way. In my family's case might save about $150 over the 3 month period.

I do not think it will increase the percentage of fuel use by any great degree, I think folks are already at a point that cutting back to some degree has already happened, most I talk with have.

Argument that price hikes will take away any savings don't hold water, 18.4 cents less per gallon is just that wether gas is $3.50/ gallon or $6/gallon.

Highway trust fund already has very large surplus and a 3 month stay from the tax won't have a tremendous effect. Actually overall revenue to the fund will go down as prices increase and fuel demand decreases anyway.

[STANG RED]

Originally posted by Reds fan
Argument that price hikes will take away any savings don't hold water, 18.4 cents less per gallon is just that wether gas is $3.50/ gallon or $6/gallon.

I'm completely missing your logic here. I understand what you are saying well enough, but the fact is if you give me 18.4 cents and I have to turn around and give it or more to someone else, I havent saved a penny. Its still gone out of my pocket. Therefore there is zero savings to me period.

[eppy 12]

http://i97.photobucket.com/albums/l239/eppy12/gas.jpg:(

[Curly]

Originally posted by STANG RED
I'm completely missing your logic here. I understand what you are saying well enough, but the fact is if you give me 18.4 cents and I have to turn around and give it or more to someone else, I havent saved a penny. Its still gone out of my pocket. Therefore there is zero savings to me period.

Curly loves holidays
how exactly do we celebrate this tax holiday
with fireworks??
or a gastax tree??
maybe hide gastax eggs?????

[Reds fan]

Originally posted by STANG RED
I'm completely missing your logic here. I understand what you are saying well enough, but the fact is if you give me 18.4 cents and I have to turn around and give it or more to someone else, I havent saved a penny. Its still gone out of my pocket. Therefore there is zero savings to me period.

:confused: Who are having to give it back to? If you are paying $4 a gallon now with the tax and tomorrow the tax is removed you will pay $3.82.......if price rises to $6 per gallon same would apply $6 per gallon with tax or $5.82 without.

I understand that you feel you will not be saving because the price for gasoline is increasing but my point and logic is the fact that without the federal tax..... gasoline at the pump would cost less by 18.4 cents per gallon no matter the price increases.

The fact is if you use x amount of gallons over the three months "tax holiday" you will pay 18.4 cents less per gallon of gas.

[Trashman]

Bad Idea. The price would drop by .18 at midnight on a certain day by dawn the price would be .18 higer or more in anticipation of the added pressure to market real or imangined. Then when summer was over the price would increase by .18 because the government would have to have the money. Then becasue they lost the money on gas they would have to increase the income tax to recoup the money they lost. Either way we lose. The only way to lower the price of fuel is for the President to suspend futures trading on fuel for the next 6 months. Because people are scared of the economic climate guess where they are putting their money You guessed it in the gasoline futueres market. There goes the economy.

[LH Panther Mom]

Originally posted by Trashman
Bad Idea. The price would drop by .18 at midnight on a certain day by dawn the price would be .18 higer or more in anticipation of the added pressure to market real or imangined. Then when summer was over the price would increase by .18 because the government would have to have the money. Then becasue they lost the money on gas they would have to increase the income tax to recoup the money they lost. Either way we lose.
I'm so glad that I'm not the only person that thinks this way!

[Trashman]

My previous post should have read.......

Bad idea. The price would drop by .18 at midnight on a certain day, by dawn the price would be .18 higher or more in anticipation of the added pressure to market, real or imagined. Then when summer was over the price would increase by .18 because the government would have to have the money. Then because they lost the tax money on gas they would have to increase the income tax to recoup the money they lost. Either way we lose. The only way to lower the price of fuel is for the President to suspend futures trading on gas for the next 6 months. This would stop the speculators from driving the price through the roof (because the can) and selling for huge profits. Because people are scared of the economic climate guess where they are putting their money. You guessed it; in the gasoline futures market. There goes the economy.

No, I do not work in any of the fields listed above.

[Stownhorse]

Originally posted by Blastoderm55
I don't like the idea. Its short term benefits are far outweighed by the long term ramifications. As one auto maker, lower fuel prices won't be beneficial in the long run so long as our consumption is so high. He went so far as to suggest that $6 per gallon gasoline could be the magic number that finally catapults our society into action. I hope we don't get to that point.

If gas gets that high, Im investing in my own drilling rig.

[ronwx5x]

Originally posted by Trashman
My previous post should have read.......

Bad idea. The price would drop by .18 at midnight on a certain day, by dawn the price would be .18 higher or more in anticipation of the added pressure to market, real or imagined. Then when summer was over the price would increase by .18 because the government would have to have the money. Then because they lost the tax money on gas they would have to increase the income tax to recoup the money they lost. Either way we lose. The only way to lower the price of fuel is for the President to suspend futures trading on gas for the next 6 months. This would stop the speculators from driving the price through the roof (because the can) and selling for huge profits. Because people are scared of the economic climate guess where they are putting their money. You guessed it; in the gasoline futures market. There goes the economy.

No, I do not work in any of the fields listed above.

I really do not believe the 18 cents per gallon savings would make my life any better. I do try to watch my driving habits, but my total miles driven have not declined nor do I expect them to unless gas goes MUCH higher.

As far as suspending the futures trading, that is not a viable idea. Who do you think buys the fuel? It's not the public but the oil companies trying to hedge. And by the way, they do not set the price of crude, demand does. If futures trading were suspended, the price of fuel would skyrocket. The biggest problem with the price of crude can be summed up as the emerging market (read China) demand for more oil and the declining dollar. My antenna believes the dollar is now undervalued and this may help in the near term if the dollar improves against the world currencies. Demand on the other hand is not going to decline, but increase. Until we reach the point that oil costs too much to use and we find an alternative, expect increasing prices, just at a slower pace if my thoughts on the dollar prove correct.