Clinton responds to gas tax attacks

Hillary Clinton's been hit hard for her proposal for a gas tax holiday -- she responded Friday, but what she said is unlikely to mollify her critics, and for good reason.

By Alex Koppelman

Published May 2, 2008 6:41PM (EDT)

Hillary Clinton's campaign has just e-mailed reporters a video clip of an event in North Carolina; in the clip, Clinton discusses her oft-maligned proposal for a summer suspension of the gas tax. (The video can be viewed below.)

During the event, Clinton told the crowd:

We have a choice. We can choose to have you continue to pay the federal gas tax this summer or we can choose to try to make the oil companies pay it out of their record profits.

This is the kind of choice that I believe we should be trying to make, because I know where I stand and I know where my opponents stand.

Senator Obama doesn't want us to take down the gas tax this summer and Senator McCain wants us to, but he doesn't want to pay for it. I believe we should impose an excess profits tax on the oil companies. They have record profits that they frankly are just sitting there counting because they are not doing anything new to earn it; they are just taking advantage of what is going on.

We ought to say: Wait a minute, we'd rather have the oil companies pay the gas tax than the drivers of North Carolina, especially the truck drivers, or the farmers, or other people who have to commute long distances.

As I've said before, Clinton deserves the hits she's taking on this issue -- I've yet to see a single expert who thinks her proposal would do Americans any good. There are problems with this latest statement, too.

Clinton implies that it's consumers who pay the tax in the first place, and that her proposal would force oil companies to pay it instead. The first part of her statement is, in a way, technically true, if somewhat misleading. The second part is definitely misleading. In 2000, the Congressional Research Service wrote:

Economists know the gasoline excise tax as a "manufacturer's excise tax" because the government imposes it at production (i.e., the producer, refiner, or importer) for efficiency in collection. Economists think the tax is generally passed forward to the retailer translating into a higher retail gas sales price. Thus, the consumer ultimately pays the tax.

One of the principal objections to the holiday proposal has been that because the tax is not actually collected at the pump, there's no reason to believe that the oil companies will actually pass on to consumers the full savings from the suspension of the tax.

Alex Koppelman

Alex Koppelman is a staff writer for Salon.

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