I have often thought that the rising price of oil and the corresponding increase in the cost of a gallon at the pump has produced benefits for certain persons and entities. Surely, the shareholders of Exxon Mobil Corp, Royal Dutch Shell, Conoco, BP (ARCO), and Chevron Texaco to mention a few of those publicly traded companies that produce and refine this commodity are pleased at the rising price of gas.
Imagine, the appreciation of the shareholders’ holdings eventually fills the coffers of the federal government via the tax on shareholder gains; the stock rises in value and the shareholder is giving up a percentage of gains not vested capital, everyone is a winner. The corporation’s after tax profits are utilized for future investments in infrastructure, exploration, and financial sureties of differing descriptions.
There is of course the on average local, state, and federal gas taxes that consume 45.9 cents per gallon; now that is a benefit. Some states actually collect a sales tax based on a percentage of revenues; for example, California gasoline taxes during 2005 were 7.25%, the state harvested approximately $1 B due to the 6 cent increase of tax per gallon sold. The beneficiaries of these tax impositions on the gasoline purchaser are complicated and levied in various ways in different states. Some states levy a flat rate per gallon; others charge a tax similar to a sales tax in that it applies to the monetary amount of the of the gasoline purchased. In some instances, states allow local communities to levy gasoline taxes in addition to any state taxes that might be levied. The mechanics of permitting a percentage of total revenue sold facilitates the single largest user tax ever imposed in the United States of America.
As with all taxation, initially the tax is infinitesimal; in time the infinitesimal is elephantine; the imposition of helter-skelter thinking by the legislators are often reduced to a simple taxing theory: A sort of if the shoe fits form of taxing gasoline; all those claiming the authority to tax is invited to participate. At the disregard of the average Joe consumer, this insidious tax policy has drastically increased the price of filling one’s gas tank. Muted by the cries of those castings scurrilous indignation’s at the global conglomerate of publicly traded gasoline producing refineries, distributors, resellers, oil drillers, and of course those no-good foreign depositors of oil; the government imposes its tax and widens its berth in perverting the price of a gallon of gas.
Does one believe that government will ease their taxation of gasoline? Is there a consumer out there in reader-land that thinks that the state of California, Hawaii, Wisconsin, or Florida will rescind their extraordinary Sheriff of Nottingham-like tax on gasoline in favor of a reasonable tax policy? Does any citizen actually believe the government has the ability to act in the interest of the gasoline consumer? Well, we all know the answers; taxation is a method redistribution to starve off the results of over budget expenditures and there is no going back to sensibility. That’s one of the good reasons government’s got into the casino business…nothing like benefiting from a drunken citizen playing a game they cannot win. How very inspiring of our elected representatives.
Was it not just a decade or so ago that environmentalist insisted that by adding a dollar or two on a gallon of gas vehicle traffic would subside by half, public transportation would flourish, and the smog would disappear? Well, the price of gas is certainly high enough, thus, another unaccountable positive of high gasoline prices; I can only assume that at today’s value of money the tax would be a 100% of retail market average and the objectives of a decade ago would be still apply. Where are the environmentalists now?
Roughly 58% of the oil used is imported but only 40% goes into cars, SUV’s, vans and pickups; as a consequence, importation of millions of barrels of oil a day would be a requirement even if there were no passenger vehicles. Irrespective all the healthy and sensible discussions about utilizing the resources of alternative energy; Americans will be dependant on oil into the distant future. The nation has two immediate options, nuclear energy and drilling within our nation’s borders so to harvest those reserves.
Naturally, our leadership is stymied; at best case lethargic. No one will put their head on the block and take the lead; no one will cut government spending, all of the incumbents are interested in retaining power even at the cost of good sense and the interest of the nation’s citizens. After all the issue at hand is the next election and raising money to compete with the counter-party for power. Maybe they will assemble those in the oil business once again or the Democrats can blame George Bush and the Republicans can blame, hell I don’t know…somebody. Just don’t touch those gasoline taxes…