Yesterday, John McCain disclosed details of his plan to cut the use of fossil fuels—and thus greenhouse gases--through a cap and trade system of mandatory emissions reductions. As we have written, cap’n trade is not the name of a cheesy seafood restaurant. It is Washington-speak for a huge new tax on oil, gas, and coal. This is a good thing, but we ought to talk about it honestly.

$451 million in tax breaks for timber companies. Ka-ching. $500 million for biodiesel. Ka-ching. $126 million for racehorse breeders. Ka-ching. $20 million for Aggie bonds. Ka-ching.

Senator Clinton has taken economists to task for our universal opposition to a gas tax holiday. Both theory and evidence tell us that suspending the tax temporarily would provide little relief to consumers while further enriching big oil.

While TaxVox and others have disclosed the folly of a federal tax holiday, some have suggested that temporary state gas tax relief might work better. Some New York State legislators are already pushing for such a plan. But before cash-strapped states jump on the bandwagon, they might consider how a previous experiment in Illinois and Indiana worked out. In 2000, Indiana announced that it would be suspending its 5 percent gasoline sales tax for 120 days beginning July 1. In response, Illinois also suspended its levy for six months that July.. Quaint as it seems today, the changes were spurred by a spring spike in Midwest gas prices to (gasp) $2.00 – a level drivers would now gladly embrace.

It is the fifth anniversary of President Bush’s dramatic landing on the deck of the aircraft carrier USS Abraham Lincoln where, in front of that massive “Mission Accomplished” banner, he declared “major combat operations in Iraq have ended.” They have not, of course. And it has me thinking about how those of us who do not have loved ones in combat operations are sacrificing nothing for this conflict.

Much of the reaction to the April 16 Democratic Presidential debate was directed at the moderators for focusing on character and perception rather than policy. But issues got mangled as well—not only by the candidates, but by moderator Charles Gibson. While questioning Barack Obama about his proposal to raise the capital gains tax, Gibson claimed that when the rate has been cut, government took in more money, but when the tax was increased revenue fell. Although this argument warms the hearts of the Wall Street Journal editorial page, the implication that capital gains tax rate cuts raise revenues is not supported by the evidence.

There are few things more frustrating in life than being a budget hawk. You spend your days predicting dire consequences that never quite come to pass, trying to convince voters that their government can’t keep expanding popular programs without paying for them, and hectoring politicians into making votes that would be political suicide. Like Cassandra of Greek myth, you have the ability to foretell the future, but suffer the curse of being unable to change it.

On April 17, the Tax Policy Center posted “Scoring McCain’s Tax Proposals”. Although I remain a fan of efforts by organizations like the Tax Policy Center to analyze taxation issues, the analysis is misleading on the whole and wrong in some particulars.

In their debate last night, Hillary Clinton and Barack Obama wandered deep into George H.W. Bush land by pledging never to raise taxes on “middle-income” taxpayers making less than $250,000.

Senator McCain proposed today to suspend the 18.4 cents per gallon federal excise tax on gasoline between Memorial Day and Labor Day this year. For a moment, forget about whether encouraging fossil fuel burning makes sense during a time of global warming, whether we should raid the highway trust fund when bridges are collapsing for lack of maintenance, or the disconnect between the proposal to cut gasoline taxes and the candidates’ endorsement of “cap-and-trade” limits that would raise gasoline prices.