Wednesday, December 5, 2012

Big Oil v. Big Government

Just last week I called Bill Shuster a jackass.  He's the chairman of the U.S. House Transportation and Infrastructure Committee.  He was hinting at the necessity to raise the federal gasoline tax up from 18.4 cents per gallon.  I was angry about that for a number of reasons, not the least of which is how politicians of every ilk always cry foul when an energy company shows a profit even though they only make a profit of about 2 to 3 cents on every gallon.  Energy companies actually take the risk, pay for the research and development, finance the exploratory projects etc.  The federal government just collects six times the profit of the energy companies while doing absolutely nothing, and then suggest that the tax isn't high enough.

Well, that's the federal story.

Now, the individual states are getting into the extortion act. 
Gov. Corbett said last week that he is mulling an increase in one component of Pennsylvania's gas tax. In New Jersey, transit advocates are urging Gov. Christie to relent on his no-gas-tax-hike vow as a way to help pay for repairs to a transportation network ravaged by Hurricane Sandy.
And in Congress, the new chairman of the House Transportation Committee, Rep. Bill Shuster (R., Pa.), said last week that "we need to explore" all funding options, including a higher gas tax.
Revenue from gas taxes has been sliding as people drive fewer miles and more efficient vehicles. And inflation has whittled away at the value of the taxes, some of which have not been raised in decades.
The federal gas tax, last increased in 1993, is 18.4 cents a gallon.
The Pennsylvania tax is 31.2 cents a gallon (32.3 cents if you count the 1.1 cent-per-gallon underground storage tank fee, which the state Revenue Department doesn't but the American Petroleum Institute does). It last went up in 1997.
Heh...let's see.  The average driver uses 729 gallons of gasoline per year.  If you live in Pennsylvania, you pay 18.4 cents per gallon federal tax and 31.2 state tax per gallon.  Add in the ground tank storage fee, and it averages off to 50 cents per gallon tax paid during every fill-up.   You're paying about $365 in taxes annually if you drive a car. 

So, while Exxon-Mobile pulls in about $15 per year profit from your purchases annually, the Federal and State Government are pulling in about twenty-four (24) times that amount with absolutely no costs or risks of running a business.  The Federal and State governments want more money from your fuel purchases.

Anyone remember how this strategy worked with cigarette taxes?  They taxed the hell out of cigarettes.  Less people smoked, and they were at a loss as to how the taxes (already spent) were dwindling.  So as the federal (and state governments-California) force fuel mandates in the form of mileage per gallon increases on us, they will wonder why the taxes (they already spent) are going down. 

Clown car politicians.  Next, they will switch to taxing what you actually buy (gasoline) and apply the tax to your actual mileage.  By that time we will all be riding bicycles on the freeways or some such nonsense.

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