Reply #54: ...but you can't say why. [View All]

[anigbrowl]

Meanwhile, every Economist out there thinks it's a disaster on wheels. And here's why Obama is against it: experience.

Obama's rivals have attacked him for not supporting the gas-tax relief — but he might have some insight into this issue that the others do not. Back in 2000 when Obama was in the Illinois Senate, he supported suspending gas taxes in his home state, a moratorium that didn't turn out to be much of an economic boon at all.

A study by the National Bureau of Economic Research of the short-term tax breaks in Illinois, and Indiana during the same period, found that gas prices — which were around $2 a gallon then — fell by an average of 3 percent, not the full 5 percent of the tax cut. That means about two-thirds of the tax holiday was passed along to consumers.

The relief was short-lived. After the moratorium ended, prices rose 4 percent. And the tax cut cost Illinois an estimated $157 million in funds and $46 million was lost from Indiana, according to the study.

http://ap.google.com/article/ALeqM5gca54s0LCP-1CIz0sSK5QWjOCzbgD90DKAK80