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Taxes at the tank

Posted By Casey Brooks On 02/08/2001 @ 1:00 am In Commentary | Comments Disabled

And now for the latest in the fuel crunch:

An e-mail is floating around in cyberspace soliciting a boycott of two major oil companies to see if we consumers can successfully influence a decrease in the price of gas through economic pressure.

Stated goal: Cheaper fuel.

I am forever amazed at the gullibility of some — no, make that a lot — of people. It’s been just about a year since gasoline prices shot through the roof, jumping, in my town, from a reasonable 97 cents a gallon to the current $1.37 — if you buy it at a discount store. At its peak last summer, putting 20 gallons of regular in your car would cost you about 35 bucks.
That didn’t last long, but I still can’t fill up my gas tank for less than 28 greenbacks.

Fortunately for me, the price of fuel has not put a serious dent in my
monthly budget, but it has altered my pocket change. For many others,
however, the cost of fuel has affected not only their pocket change, but
their standard of living as well.

When fuel prices took their dramatic leap last year, news coverage about
the “gas crisis” was limited to speculation about how the higher fuel prices
would affect people filling up their cars. Most guessed that the increased
cost would reduce the number of miles people would travel for their summer
vacations. As the “crisis” continued, talk turned to concerns about high
heating bills should fuel prices remain inflated throughout winter.

Yet for all the reflecting about people’s travel plans and heating
concerns, I never heard one report consider the broad effect on the economy.

While Clinton entertained his delusion of bringing lasting peace to the
Middle East through forced accords, his own country began a slow, downward
economic spiral spawned primarily by rising fuel costs. Why did we even have
rising fuel costs? Was it because the greedy oil companies decided they
needed to increase profits by gouging their customers? Or was it because the
OPEC nations decided that the price per barrel was too low and decided to cut
production and raise prices?

Instead of formulating some policy that would facilitate our own oil
production in the United States that would grant us some immunity from
Middle East mood swings, Clinton remained tenaciously focused on handing
Israel to the Palestinians.

Meanwhile, back at the ranch, the increase in gas prices spread like
wildfire to every industry in the United States, effectively raising the cost
of production, transportation and distribution of every product in the
country. (Because, as we have now learned from California, you can’t expect
any business to repeatedly operate at a loss and still remain viable.)

Consequently, we now not only have inflated fuel prices, but we also
have a sluggish national economy and many western states in consternation
because of significant power problems.

What does any of this have to do with a proposed boycott of a couple of
oil companies?

A lot.

Mostly, though, this has to do with trying to figure out why so many people
cling to the notions that 1) gas prices are high because the oil companies
are greedy and 2) the greedy oil companies owe us cheap gas.

Although our current gas prices might not be what they used to be, they
are still relatively affordable. Comparatively, if you lived in England, it
would cost you upwards of $4.00 per gallon to put gas in your car — if you
even owned one. The same is true for most of Europe, where fuel prices have
always been inflated for two reasons. The first reason is to inhibit the
reliance on automobiles by the masses. (Better to use the state-owned train
and bus systems.) The second is that more than 70 percent of the cost
of fuel is in taxes. (That old socialism-is-better philosophy in action.)

Here in the United States, where not to own an automobile is to be in
the significant minority, we also have gas taxes, and they are higher than
most people realize. The last time I checked, for every gallon of fuel I
purchased, I was paying 41 cents to federal and state government. That means
that for every 100 gallons of fuel I buy, I’m handing over $41.00 to these
highway robbers. Conversely, if you sheared the levy tax off the price,
then actual cost is only about 97 cents a gallon.

And for my 97 cents, I get a product that began thousands of miles away
deep beneath the earth in a bed of rock that someone remarkably figured out
not only how to use, but how to locate, drill for, pump out, transport,
refine, distribute and put it back beneath the ground just down the road
from my house. All I have to do is drive to the gas pump, stick a nozzle in
my fuel tank and pay for it.

For everything involved in the production and refinement of oil into the
variety of products that have made life universally easier and more
comfortable for millions of people, I think the oil companies ought to be
entitled to earn a little profit. Particularly considering that I,
personally, am incapable of drilling for and refining my own oil, I want them
to be happy. That way, I can keep driving my car.

By the same token, if the masses would quit blaming the oil companies
for high prices and start aiming their boycotts at the politicians who
implement these incredible tax rates and costly environmental policies, then
maybe fuel would be cheap once again.

Or, to put it another way, it’s not the greedy oil companies. It’s the
politicians, stupid.


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