A few weeks ago, we wrote about a typically misinformed D&C piece about the proposal that gas taxes be temporarily suspended. The D&C wrote in favor of the proposal, perhaps not surprisingly, given its superficial appeal.

Now, some more serious journalists have taken on the issue and they’re arriving at very different conclusions. Here’s Paul Krugman:

Why doesn’t cutting the gas tax this summer make sense? It’s Econ 101 tax incidence theory: if the supply of a good is more or less unresponsive to the price, the price to consumers will always rise until the quantity demanded falls to match the quantity supplied. Cut taxes, and all that happens is that the pretax price rises by the same amount. The McCain gas tax plan is a giveaway to oil companies, disguised as a gift to consumers.

Is the supply of gasoline really fixed? For this coming summer, it is. Refineries normally run flat out in the summer, the season of peak driving. Any elasticity in the supply comes earlier in the year, when refiners decide how much to put in inventories. The McCain/Clinton gas tax proposal comes too late for that. So it’s Econ 101: the tax cut really goes to the oil companies.

Here’s Tom Friedman (yes, I know he’s not really a serious journalist):

It is great to see that we finally have some national unity on energy policy. Unfortunately, the unifying idea is so ridiculous, so unworthy of the people aspiring to lead our nation, it takes your breath away. Hillary Clinton has decided to line up with John McCain in pushing to suspend the federal excise tax on gasoline, 18.4 cents a gallon, for this summer’s travel season. This is not an energy policy. This is money laundering: we borrow money from China and ship it to Saudi Arabia and take a little cut for ourselves as it goes through our gas tanks. What a way to build our country.

When the summer is over, we will have increased our debt to China, increased our transfer of wealth to Saudi Arabia and increased our contribution to global warming for our kids to inherit.

Perhaps the best piece I’ve read comes from Evan Dawson of Channel 13 (via F29th):

Delaying the pain could hurt more

If the cost of gas goes down, consumers will feel a sharp hit when it goes back up come Labor Day. Any consumers adjusting their budgets for lower gas prices — or sustained prices — would feel the sting of a sharp jump in prices after the gas taxes are renewed.

You might not actually save a penny

(Economist Kim) Gardner says New York state in particular is ripe for distributors to control the prices. “Cutting the gas tax would open the door for distributors to raise prices, erasing any savings for the consumer,” Gardner explains. “New York state is not exactly suited for competition and free market when it comes to gasoline.”

The bottom line is that no serious observer thinks the gas tax holiday proposal is anything other than an absurd gimmick.