George Bush didn’t give you a Tax Cut

Many people will be voting Republican this year in misguided appreciation for the “tax cut” and rebate championed by George Bush and, belatedly, his heir apparent, John McCain. This would be a mistake for everyone. If one recalls, the surge in the cost of fuel, from which the entire country suffers, began in earnest shortly after the tax cut came into effect. The tax cut given under the Bush administration has effectively been nullified by the rise in fuel prices, both on the road and in the home. This development was created by the Bush administration’s pro-oil policies. Only a few thousand citizens of the U.S. and some foreign nationals connected with the oil industry have benefitted, while the rest of us have suffered.

In the end, Bush’s tax cuts have actually been a tax shift. Instead of paying out on one’s income, one pays out a greater amount in the federal tax on gasoline and heating oil. It works like this: although most people have received tax rebates and cuts to some rough hundreds of dollars per year, they are now paying that amount back as a reflection of the corresponding rise in the real cost and concurrent taxation of fuel. Although the federal fuel tax has not been raised by percentage, the price of fuel has risen in its share of individual expenses. As the price of fuel becomes an increasingly higher percentage of expense per unit, so too does the tax on that fuel. The tax on the fuel is not unreasonable in its per unit percentage, but the real cost per unit of fuel as a fraction of individual expense is. Therefore, with the increasing share of individual income consumed in the price of fuel, and its attendant tax, the Bush tax cuts have been effectively eliminated for the vast majority of Americans.

Do not think that a fuel efficient mode of transport helps. This increase in the real effect of the fuel tax impacts everything traded in America. John McCain has offered to make permanent the Bush tax cut, now evaporated into fossil fuel engines, but has made no clear effort to plan for easing American dependence on fossil fuels.