Did God put Republicans on this earth to cut taxes?
If the Topinka proposed gasoline tax decrease (See post, below) is fully passed on to the consumer, which is unlikely in the short run, and retail gas prices stayed at their current level in the Loop of about $3.30 per gallon, Public Affairs estimates the savings would be about $4 for a "fill up." So, for a driver who fills his [or her] car up once a week, the Topinka proposed gas tax dercrease would add up to a savings of about $50 bucks for the entire summer.
Will the full tax cut be passed on to consumers? The longer the run, the more time, by definition, for producers and consumers to adapt to price changes, net of taxes; the more time for producers and consumers to adapt to price changes, net of taxes, other things equal, the more elastic the demand and supply curves for gas; the more elastic the demand and supply curves for gas, other things equal, the greater the amount of the tax decrease that will passed on to consumers. Contrary to conventional media thought, this is true for both competitive and monopolistic industries. Of course, the retail gas business is quite competitive, perhaps even more so than the media business in Chicago.
So, if the industry supply curve for gas were completely elastic or if the industry demand curve for gas were completely elastic, which they are not, either in the short or long run, the estimated maximum savings for someone who fills her 20 gallon tank about once a week, as a result of the Topinka proposed decrease in the gas sales tax, would be about 50 bucks for the entire summer.
Now, a savings of $50 for a summer may not seem large to you. But, remember, as Bob Novak used to say, God put Republicans on this earth to cut taxes, and Topinka's proposed gas tax cut is a start, or so some Republican supporters might say.
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Jeff Berkowitz, Show Host/Producer of "Public Affairs," and Executive Legal Recruiter doing legal search can be reached at JBCG@aol.com
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Will the full tax cut be passed on to consumers? The longer the run, the more time, by definition, for producers and consumers to adapt to price changes, net of taxes; the more time for producers and consumers to adapt to price changes, net of taxes, other things equal, the more elastic the demand and supply curves for gas; the more elastic the demand and supply curves for gas, other things equal, the greater the amount of the tax decrease that will passed on to consumers. Contrary to conventional media thought, this is true for both competitive and monopolistic industries. Of course, the retail gas business is quite competitive, perhaps even more so than the media business in Chicago.
So, if the industry supply curve for gas were completely elastic or if the industry demand curve for gas were completely elastic, which they are not, either in the short or long run, the estimated maximum savings for someone who fills her 20 gallon tank about once a week, as a result of the Topinka proposed decrease in the gas sales tax, would be about 50 bucks for the entire summer.
Now, a savings of $50 for a summer may not seem large to you. But, remember, as Bob Novak used to say, God put Republicans on this earth to cut taxes, and Topinka's proposed gas tax cut is a start, or so some Republican supporters might say.
*************************************************
Jeff Berkowitz, Show Host/Producer of "Public Affairs," and Executive Legal Recruiter doing legal search can be reached at JBCG@aol.com
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