In a pretty ambitious plan Senator John McCain is proposing a “gas tax holiday” asking Congress to remove the 18.4 cent federal gas tax and 24.4 cent diesel tax from Memorial Day to Labor Day so Americans can save at the pump. Combined with his call for the nation to stop adding to the Strategic Petroleum Reserve, with the belief that doing so would lower worldwide oil prices, McCain’s plans could lead to a large saving at the pump but a massive loss of revenue.

About 60% of federal gas taxes are used for highway and bridge construction. The remaining 40% goes to other, unrelated uses by the federal government according to Transportation Secretary Mary Peters. The federal gas excise tax was imposed in 1932. You can learn more about its history from The Congressional Research Report: RL30304: The Federal Excise Tax on Gasoline
and the Highway Trust Fund: A Short History”

This tax cut is part of a series of economic stimulus plans including (From the Associated Press:

_Raise the tax exemption for each dependent child from $3,500 to $7,000.

_Require more affluent people — couples making more than $160,000 — enrolled in Medicare to pay a higher premium for their prescription drugs than less-wealthy people.

_Offer people the option of choosing a simpler tax system with two tax rates and a standard deduction instead of sticking with the current system.

_Suspend for one year all increases in discretionary spending for agencies other than those that cover the military and veterans while launching an expansive review of the effectiveness of federal program.

Mitt Romney was hitting the morning shows to explain and defend McCain’s plans.