April 21, 2008 / 6:29 PM / 10 years ago

Obama: Gasoline tax holiday is a "bad idea"

BLUE BELL, Pennsylvania (Reuters) - Democratic presidential candidate Barack Obama on Monday criticized a plan by his Republican rival Sen. John McCain to give U.S. consumers a temporary break from the federal gasoline tax.

“I’ve said I think John McCain’s proposal for a three-month tax holiday is a bad idea,” Obama, an Illinois senator, told a small forum with middle-class voters at a community college outside Philadelphia.

Obama said that consumers would only see the price cut for a short time before the costs “spike right up” again. He also said there was no guarantee that oil companies would not just raise prices at the pump by the same amount as the tax cut.

“We’re talking about 5 percent of your total cost of gas that you suspend for three months, which might save you a few hundred bucks that then will spike right up,” Obama said. “Now keep in mind that it will save you that if Exxon Mobil doesn’t decide, ‘we’ll just tack on another 5 percent on the current cost.'”

Obama added that the money from the gasoline tax is needed for the federal highway fund.

But Obama said he did not favor an increase in the gasoline tax.

“Now, I don’t want to jack up the cost. I‘m not going to impose an additional tax on gas because consumers just can’t bear it right now,” he said.

Obama is battling Hillary Clinton for the Democratic nomination and the right to run against McCain, the presumptive Republican nominee in the general election in November.

McCain last week called for a summer gasoline-tax holiday for Americans upset over high prices at the pump. The proposal was part of a broader plan to help the ailing U.S. economy.

Reporting by Caren Bohan, editing by Jackie Frank

Our Standards:The Thomson Reuters Trust Principles.
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