This blog post answers a question I've been wondering for some time.
Obama is blaming oil companies and "speculators" for high oil prices. Meanwhile, the government, on average, confiscates 48 cents in taxes per gallon of gasoline. Exxon, for example, makes 2 cents per gallon of gasoline. In other words, the government makes 24 times, or 2,400% more per gallon of gas than Exxon.
But according to Obama, the way to punish these greedy oil companies is to eliminate subsidies. Look, I'd like to end ALL government subsidies, but if they're talking about eliminating tax deductions used for oil exploration, that's not a subsidy. That's simply allowing a company to keep more of the profits it actually earned. And to take Exxon's money and give it away in subsidies to "green energy" startups is simply wrong.
But more important to a lot of people is that increasing the cost of business for oil companies will not lower the cost of gasoline. Eliminating reckless money printing by the Fed, bureaucratic regulation, and high taxes will.
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1 comment:
Okay, but even if the government eliminated the 48cent tax on a gallon of gasoline, it would still be $3.50 a gallon. When I was 16 (not THAT long ago), gas was about 75 cents a gallon. I remember during 9/11 when unscrupulous gas stations raised their prices to $4 a gallon and many got dinged by the government for gouging customers. Now, 4$ a gallon is the norm (shudder).
Looking at the historical data, average gas prices in 1996 were $1.07. So if inflation over the last 15 years averages 2.5% per year (from here: http://www.inflationdata.com/inflation/inflation_rate/historicalinflation.aspx), gas prices should actually be about $1.55 a gallon. Instead, gas prices have increased by an average of 12% PER YEAR since 1996, and in some years (1999, 2002, 2005, 2007, 2009 and 2011) prices have increased at more than 25% per year (from here: http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_history.html).
There is more in play here than just high tax government taxes. US consumers are being straight-up gouged.
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