McCain Introduces 'Gas Tax Holiday' Legislation
By Michael D. Shear
Driving somewhere fun? Sen. John McCain wants it to cost less this summer. Today he introduced legislation that would create a "gas tax holiday" this summer, in which the federal government would suspend imposition of the 18-cent per gallon gas tax.
The federally tax-free gas would be pumped between Memorial Day and Labor Day. It would -- in theory -- cost $3.60 less to fill up a 20-gallon gas tank if McCain's legislation goes into effect.
Whether that happens is by no means certain. The Democratically-controlled Senate and House are not likely to give McCain an issue to run on this fall. And even if it did pass, there's no guarantee that gas prices would fall immediately.
Many economists say McCain's proposal would do nothing for prices at the pump. In a summer gasoline market driven by high demand and short refinery capacity, prices rise to the so-called "market clearing price" -- what the market will bear. Otherwise, Americans would face gas shortages.
That means prices at the pump could stay unchanged with the tax cut, and the oil companies would get to pocket an extra windfall.
Democrats call the idea a presidential campaign gimmick. But in a statement announcing the legislation, McCain called it much-needed relief for working families.
"Hard-working American families are suffering from higher gasoline prices, and they need relief. Now is the time to act with a tangible plan to address this problem," he said. "The 'tax holiday' will make the summer driving season easier for people across the nation."
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