Quote:
Originally posted by Adder
Maybe McCain thinks that the oil companies will use the extra revenue to increase refining capacity? (yeah, right)
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The economics above is faulty. If supply were fixed then price would continue up ad infinitum. It doesn't because there are marginal imports of gasoline that meet increased demand. The tax incidence depends on the elasticities of demand and supply--no tax would increase revenues for oil cos. and decrease prices for ocnsumers.
As for increasing refining capacity, they would if environmental laws and community opposition didn't prevent it. They have every economic incentive to increase refining capacity, but can't because of various restrictions.
