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Gas tax holiday is a dumb idea

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Scott Jagow: The latest consumer confidence survey came out yesterday. They should start calling it the consumer anxiety survey. The number of people who said they were planning a summer vacation was the lowest in three decades. Obviously, gas prices are a big reason. Some politicians want to put the gas tax on holiday. So people wouldn’t have to pay the extra 18 cents a gallon this summer. But commentator Robert Reich doesn’t like it.

Robert Reich: Talk about a dumb idea. It will only encourage Americans to drive more, thereby increasing demand and causing gas prices to rise even higher. Driving more will also put more carbon dioxide into the atmosphere, which fuels global warming. And this will cost taxpayers some $10 billion. It’s a cheap political gimmick that does nothing to stem the rising price of oil.

You want to hold oil prices down? In the short term, strengthen the dollar. Part of the reason oil prices are soaring is because the dollar is tanking. The Treasury and financial ministries of other rich countries should buy back dollars to stop speculators who are bidding the greenback down.

Over the longer term, though, China and India’s insatiable demand for oil will continue to drive oil prices up, and turmoil in the Middle East is likely keep them up. So there’s really only one way for us to go: alternative sources of energy — wind, solar, biomass, water and, if we can make it safe enough, nuclear.

Why aren’t oil companies investing in these alternatives? They have more money now than they know what to do with. But basic research is too risky. And why should we expect them to invest in alternatives to oil, anyway? They aren’t even putting that much into oil exploration. They figure the best way to keep their stock price high is to use their windfall profits to buy back their shares. Now, this may be good for their shareholders, but it’s terrible for America.

That’s why it’s time for a windfall profits tax on oil companies to finance our way to sensible and sustainable sources of energy. Forget the summer tax holiday on gas. We need a permanent holiday from oil.

Jagow: Robert Reich teaches public policy at the University of California, Berkeley. His latest book is called “Supercapitalism.”

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