I forgot to mention this the other day, but Dean Baker's post on McCain "Special Summer Tax Break for Exxon" is very good. Basically, McCain's panderrific promise to remove the gas tax for the summer would simply allow the oil companies to make more in profits. Imagine that a gallon of gas is a dollar, but everyone is used to paying $1.20 because of taxes. If the government takes away the taxes, and the gas station merely reduce prices to $1.10, what actually happens is that consumers feel like they get a good deal and oil companies get to make an extra 10 cents per gallon. Worse, we'll all still pay the tax money back to the government, because the services and highway projects funded by a gas tax will still have to be paid for, only now lots of non-drivers will be paying that money too. So, in the aggregate, the government will get the same amount of money, the oil companies will make much more money, and consumers will pay more in total. Thanks John McCain!
