Posted: 04/26/2006
NCPA Scholar Criticizes Bush's Response to High Gas Prices
Elimination of taxes help consumer most.
DALLAS (April 26, 2006) - Politicians on all levels feel pressure to do "something" about record high gas prices with midterm elections looming and approval ratings plummeting. In response to the President's proposals announced yesterday, National Center for Policy Analysis (NCPA) Senior Fellow H. Sterling Burnett urges the President and Congress to consider eliminating taxes rather than creating a new one.
"While I welcome the President's decision to temporarily waive fuel additive requirements during the summer driving season, it's a bit hypocritical," said Burnett. "If higher prices are, as the President states, 'a hidden tax on working people. . . . farmers . . . [and on] small businesses,' then it would be better still to end them entirely."
Burnett also notes that the President's call for increased scrutiny and new investigations into price gouging is ineffective and inefficient. Previous investigations have always exonerated the oil industry and found that spiking prices are largely due to higher prices for crude traded in the futures' market.
"If the government really wanted to decrease the price of gasoline it should end the federal gasoline tax or suspend it temporarily," said Burnett. "This is one of the few things the federal government could do to reduce prices at the pump in the short-term."
The NCPA scholar praises the President for discouraging Congress from imposing a counterproductive windfall profits tax. Such taxes decrease rather than increase investment by U.S. oil companies in new production and refining capacity. This translates to higher, not lower, prices at the pump.
Burnett notes that the President is correct to highlight our need to increase domestic production of oil - one of the few things that, in the long-term, would actually modestly reduce the price of gas at the pump. However, Burnett also points out that even when the President had substantial political capital, he failed to use his office as a bully pulpit or the veto pen to demand that Congress open up ANWR and the Outer Continental Shelf to exploration and production.
Burnett states, "If he had put half the effort behind opening up ANWR when he shaped his energy bill 4 years ago, that he did in getting bankruptcy reform or a Medicaid drug plan, we would be years closer to substantially increasing our domestic supplies of oil and natural gas."