Thursday, May 1, 2008

Should we do a gasoline tax holiday?

The idea sounds good, like everyone else in the world, the price of a fillup is shocking, and anything that would bring it down is a good thing.
Question. Would a gas tax holiday reduce the price at the pump? The outrageous pump prices today are "rationing by price". There isn't enough gasoline to go around, so the sellers are raising the price to slow sales to prevent running out. The price at the pump has little to do with the cost of production, it's a scarcity price. Actually a lot of the gasoline price comes from the equally outrageous price of the raw material, crude oil, but the crude price is sky high for the same reason, not enough to go around.
I think the pump price will stay up there after a gas tax holiday. So, why not channel some of the money from a scarcity price into tax revenue rather than giving it to the oil companies?
If we want to do some thing about price, lets build a couple of new refineries in the US, and allow drilling off shore and next to the Prudhoe bay field ( the so called Arctic National Wildlife Refuge).
Funny, with the entire Arctic to choose from, the wildlife just happen to need refuge in an oil field. If I didn't know better, I'd think the wildlife refuge was established to stop oil exploration rather than to help out the caribou.

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