The supply/demand model and its application to tax incidence theory is a staple in introductory economics textbooks. In asking about the effect of a reduction in an excise tax on my intro micro exams, one unacceptable answer runs something along these lines: "While the tax decrease may initially lower price, the increase in demand resulting from a lower price will cause prices to increase back to where they started." This is a classic example of confusing "changes in demand" with "changes in quantity demanded". I am surprised and dismayed to see precisely this argument repeated by several prominent commentators in the recent debate over the gas tax holiday. The most persuasive argument that I have seen that a tax holiday will not affect the price of gasoline is that the short-run supply is essentially perfectly price inelastic. Analyst who ascribe to this view should in fact be advocating an increase in the gas tax, which should have no effect on price and would cut into the profits of oil companies, in addition to increasing revenues to the highway trust fund. However, I suspect that no commentator would seriously support this policy, even as they argue no price effect from a tax decrease. Your analysis of the saving to the average consumer is reasonable, but it should be noted that it refers to the average consumer of gasoline. The saving would be higher to the above-average consumer, such as rural residents, and probably explains why they find the proposal more appealing. I note this because your analysis has apparently been highly persuasive -- I have seen your figure cited numerous times.