President Joe Biden’s latest hare-brained idea to bring down gas prices is getting poopooed from all sides.
A former economist for the Obama administration, Jason Furman, said that consumers will benefit little from Biden’s proposal for a three-month gas tax holiday, Breitbart reported.
Obama economist not impressed
Most of the 18-cent tax cut, which would end in September, “would be pocketed by industry–with maybe a few cents passed on to consumers,” Furman said.
That is, the tax cut would benefit the very oil companies Biden and his allies are blaming for inflation. How ironic.
The problem with Biden’s plan is that he cannot guarantee that consumers will reap the reward of the tax cut, Furman said.
Supply is low and not responding to inflation, so the likely effect of a tax holiday would be to drive consumers to buy more gas than can be produced, driving prices up.
“If supply is not very responsive to price (the situation now) then most of the benefit of the tax cut will go to suppliers. The intuition is that if it was passed onto consumers they would want to consume more than could be produced–driving prices back up,” Furman said.
Biden’s holiday still needs to be passed through Congress, but even Democrats are giving the idea a chilly reception, with many skeptical of the dubious, at best temporary benefits and the impact the tax cut would have on federal funding that pays for roads and bridges.
No less than Biden’s old boss, Barack Obama, once called the gas tax holiday a “gimmick” for politicians to “say that they did something.”
Republicans say Biden is failing to address the core issue: his war on fossil fuels, which began on his first day in office. Senate Minority Leader Mitch McConnell (R-KY) summed things up pretty well, calling Biden’s gas tax holiday an “ineffective stunt to mask the Democrats’ war on affordable American energy.”
The gas holiday is Biden’s latest attempt to tame what he calls “Putin’s price hike” with ineffective workarounds, like raising the amount of ethanol in gasoline and releasing oil from America’s strategic reserves. Of course, Biden is also weakly blaming inflation on Russia’s invasion of Ukraine and greedy oil companies, even as he dubiously tries to convince voters the economy is roaring.
Is Biden so beholden to the climate lobby that he’s willing to sacrifice his presidency?