We'd be better off suspending gas tax
March 31, 2022
To The Eagle:
The rant about corporate oil price gouging in last week’s letters to The Eagle may have been mired too deeply in the fever swamps of alternative reality to be dragged back to sunlight and sanity, but we’re willing to try. We achieved energy independence under Donald Trump, who immediately put it to good use, easing the Russian stranglehold on Eastern Europe, deterring Iran’s terrorist activities, and as a bargaining chip in the middle east Abraham Accord, finally bringing peace to that region. At home we had stable, relatively low gas prices and a booming economy.
Then Joe Biden canceled our pipeline, green lighted Putin’s, and stopped oil leasing, exploration, and drilling on federal lands. Climate Action 100+, comprised of 615 global investors, is steering funding away from oil toward renewable energy, and another group of Europe’s most powerful investors is working to starve oil companies of both cash and credit. So, far from gouging, the oil companies are under attack by both governments and the investment community, all under the banner of ESG (environmental, social, and governance investing). Energy companies account for 25% of U.S. corporate defaults.
Every buck you spend at the gas pump breaks down this way: 68 cents for the oil, 14 cents for taxes, 10 cents for refining, and 8 cents for distributing and marketing. It’s hard to tell what a gas company makes in profits but it is thought to be 8 cents per gallon. ExxonMobil currently owns no gas stations in the U.S, so who profits when you fill ‘er up? Our clue-free writer suggests a “windfall” profits tax could be collected and distributed to gas-starved citizens, which ignores three basics: (1) Corporate taxers are paid by the consumer of the corporation’s product. (2) Such taxes, if collected, are never passed back to the people. (3) Our inflation woes were caused by profligate printing of Covid relief money for an economy with lots of pent-up demand but no supply.
We’d be better off suspending the Washington gas tax, which is 39 cents per gallon.