Obamacare Caused The Gas Tax Cut To Go Up In Flames
Wall Street analysts unanimously cheered last fall when the price of oil fell from nearly $100 a barrel in June of 2014, to almost $45 a barrel by the end of January 2015. The theory was that the average American family, paying less at the pump, would plow this savings into other goods and services, giving GDP a much needed boost.
In the winter of 2014 optimism about a strong 2015 was abound. The average household was now poised to have an extra $750 a year that would soon be burning a hole in their pockets. Falling gas prices would free up billions of dollars for consumers to spend next year, with the spend-happy middle class seeing most of the benefit.
Lower prices at the pump was the equivalent of cutting taxes between $100 billion and $125 billion. Increased consumer spending as a result of lower gas prices were predicted to add as much as a half-percentage point to economic growth in 2015.
With first quarter GDP now running negative, it is clear this “gas tax” did not have the simulative effect analysts had hoped for.
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