A Gallon of Truth: Obama's gas tax math is correct (w/ Update)

Here is what Obama said about Clinton and McCain's pandering on gas tax suspension for the summer:

Clinton-McCain gas tax holiday slammed as bad idea

"It would last for three months and it would save you on average half a tank of gas, $25 to $30. That's what Senator Clinton and Senator McCain are proposing to deal with the gas crisis," he said on Tuesday in Winston-Sal

And he's absolutely right.

The Context:

Clinton-McCain gas tax holiday slammed as bad idea
By Alister Bull Wed Apr 30, 9:52 AM ET

WASHINGTON (Reuters) - A gas tax holiday proposed by U.S. presidential hopefuls John McCain and Hillary Clinton is viewed as a bad idea by many economists and has drawn unexpected support for Clinton rival Barack Obama, who also is opposed.

Republican McCain and Democrat Clinton, who is battling Obama for their party's nomination, both want to suspend the 18.4-cents-per-gallon federal gas tax during the peak summer driving months to ease the pain of soaring gas prices. The tax is used to fund the Highway Trust Fund that builds and maintains roads and bridges.

Economists said that since refineries cannot increase their supply of gasoline in the space of a few summer months, lower prices will just boost demand and the benefits will flow to oil companies, not consumers.

Obama criticized the plan as pure politics and said the only way to lower the price of gas is to use less oil.

"It would last for three months and it would save you on average half a tank of gas, $25 to $30. That's what Senator Clinton and Senator McCain are proposing to deal with the gas crisis," he said on Tuesday in Winston-Salem, North Carolina.

"This isn't an idea designed to get you through the summer, it's an idea designed to get them through an election."

A dose of math:

Gas Tax Math:

1. An average car is driven about 12K miles per year.

2. That's 1K mi per month.

3. According to answers.com, the average mileage for an average car is 17 miles per gallon.

4. That gives us 58.8 gallons per month per average car.

4. At 0.184c tax savings/pandering per gallon, that comes to $32.5
for 3 months.

which is pretty close to the $30 figure Obama gave.

For cars that give higher mileage, say 25 mpg, the figure would be around $21 savings for the summer. As highlighted in the context excerpts, the proposed tax holiday is only for the three peak summer driving months.

A gallon of truth:

Please help spread the truth.


UPDATE: Thanks to Setrak, we have from Politico leading economists like Prof. Stiglitz opposing the gas tax suspension:

Economists for the gas tax

Brookings' Henry Aaron sends over a statement (.pdf) signed today by 150 economists opposing the gas tax holiday.

They include Nobelists Joe Stiglitz, James Heckman and Daniel Kahneman, as well as a Clinton O.M.B. director, Alice Rivlin, and Robert Shapiro, the chief economic adviser to Bill Clinton's 1992 campaign.

Unclear how many vote in Indiana, though.

UPDATE: I spoke too soon. The list includes nine Indiana University economists, including the chairman of the department, Gerhard Glomm.

By Ben Smith 05:24 PM

Opening paragraph of their statement from the pdf file:

An Open Statement Opposing Proposals for a Gas Tax Holiday

In recent weeks, there have been proposals in Congress and by some presidential candidates to suspend the gas tax for the summer. As economists who study issues of energy policy, taxation, public finance, and budgeting, we write to indicate our opposition to this policy. Put simply, suspending the federal tax on gasoline this summer is a bad idea and we oppose it.

Tags: Barack Obama, Hillary Clinton, John McCain, Political Pandering, Summer Gas Tax Suspension (all tags)



Tips for math+truth!

by NeuvoLiberal 2008-05-02 06:17PM | 0 recs
Math and truth are too hard

Hillary, right or wrong!

by Bee 2008-05-02 06:18PM | 0 recs
Diary RECs would be much appreciated as well!

Thanks in advance.

by NeuvoLiberal 2008-05-02 06:23PM | 0 recs
Re: Tips for math+truth!

OK, so please put down your numbers for:

1. miles driven per month
2. mpg

and then we can figure the cost per month.


by politicsmatters 2008-05-02 06:25PM | 0 recs
Did you click the %^&$A*&^s links given?

I got the numbers (12K/year and 17mpg) from answers.com.

If you have better data, provide links to it instead of shouting.

The final figure of about $30 won't change much, I can assure you.

by NeuvoLiberal 2008-05-02 06:28PM | 0 recs
Well, congestion is not exactly a problem for

rural drivers that you and Clinton claim to champion (on that, let's not forget that the Clintons championed China MFN and didn't ensure that trade deals had strong enough labo/env protections. The Clinton-Walmart-China connection has to be one of the worst things that has happened to rural America). Now, is it?

by NeuvoLiberal 2008-05-03 08:14AM | 0 recs
On the 'issue at hand', please see the

following (pdf) file.

by NeuvoLiberal 2008-05-03 09:48AM | 0 recs
No you are wrong

Insurance companies as well as car dealerships still consider 12K the average. Have you not heard of car warranties? Yeah, those things are based on the 10-12K/year miles.

by sweet potato pie 2008-05-02 06:31PM | 0 recs
Re: Tips for math+truth!

Which dum%^&$A*&^s is going to tell me here that he/she puts only  12k/ year

Less than 12K a year for a long, long time. As I would guess a lot of people living and working in Summit County around Akron, Ohio could attest.

Try Kenmore to Downtown.  44314 to 44308 for example. 10.4 Round trip. From, West Akron it is less. In Ohio, There are a few that like living far away. I guess they like spending time on the road and honking horns at people.

Even, if this tax holiday saved $100, it still idiotic give away to the price setters.

Oh, Akron has buses and the last I heard Atrios doesn't own a car.

by ThosJoseph 2008-05-02 08:45PM | 0 recs
Re: Tips for math+truth!

Make a point. I don't care. This tax holiday is a like sitting on a whoopee cushion.

I mentioned $100 for the hell of it. What difference would that make in your life over the summer? It's garbage.

by ThosJoseph 2008-05-02 09:09PM | 0 recs
Re: Tips for math+truth!

Moving nearer to the work place isn't a bad idea either. Unfortunately, Bush has those options screwed up. Youngstown to Akron commutes are insane. My wife works with them. Both of us scratch our heads and think 'what?'. I guess we don't know Youngstown's job market.

by ThosJoseph 2008-05-02 09:27PM | 0 recs
Re: A Gallon of Truth: Obama's gas tax math is cor

My car goes about 15,000 miles a year. The mpg is around 25 (not that great, but I need four wheel drive because I live in a wintry climate).

15,000 miles divided by 25 = 600 gallons a year
600 divided by 12 = 50 gallons a month

The gas tax is .18 per gallon
.18 times 50 = 9, meaning that my "savings" from a an federal tax holiday, should I receive 100% of the savings is $9.00 a month.

Assuming a summer is 3 months, I'd save $27.00 for 3 months.  

by politicsmatters 2008-05-02 06:30PM | 0 recs
Re: A Gallon of Truth: Obama's gas tax math is cor

Yeah, but Clinton supporters are only into the hype. I know that Hillary supporters know the gas tax holiday is not good, but they think it's a good election gimmick and will support it anyway.

If it was only McCain who supported this, the Hillary supporters would use logic and reasoning and wouldn't go for the gas tax.  

This gas tax holiday is like Bush's argument that we need to drill for more oil to lower gas prices.  II know that Hillary supporters don't agree with Bush's argument because they have logic and reasoning powers.  But if Hillary advocates something, the Hillary supporters suspend all logic and reasoning, and wholeheartedly support her.

I know Hillary supporters are smarter than this but they won't admit the gas tax holiday is bad for jobs, environment and only good for Shell.  It's all been laid out for everyone to see. Oh well.

by hienmango 2008-05-02 07:06PM | 0 recs
people also drive more in the summer than

in other months.

Just a suggestion.

by sepulvedaj3 2008-05-02 07:28PM | 0 recs
Re: people also drive more in the summer than

let's say we double the number we got. it's still pandering x 2.

In any case, it isn't a given that the suspension would even decrease te overall cost: leading economists think that the increased demand will jack up the price. Please see the update posted with a pdf of their statement.

by NeuvoLiberal 2008-05-02 07:42PM | 0 recs
And we want to encourage that?

Encourage folks to hop in the RV's and tool around the country tearing up the highways that now have no funding for repairs, pollute the air at 6 miles per gallon, drive the price of gas up even further by increasing demand?  Just wondering.

by GFORD 2008-05-02 09:55PM | 0 recs


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