Big Oil is Not the Problem — High Taxes Are
Maxine Waters is blabbering about how bad the roads and bridges are. Of course, she is saying this so Americans will be scared to death and pressure their congressmen to pass the nearly half-trillion dollar so-called jobs bill. I want to know where all the taxes have gone that we’ve been paying every time we go to the pump. It seems to me that repairing roads and bridges is cheaper than building them from scratch. I suspect that taxes from gasoline have been spent on other things.
So what’s a politician to do? Blame the greedy oil companies. Big oil is bad. But is the price of a gallon of gasoline really that high given the rate of inflation?
I can remember seeing the movie Tender Mercies starring Robert Duvall as a drunken, down-and-out country-western singer who gets religion and a new family. The woman he marries owns a gas station. The price signs showed that gasoline was around $1.50 per gallon, and that was in 1983. I remember what I was earning in 1983, about one-tenth of what I am making today. Fifteen dollars a gallon would make me about even.
When I was in high school, I worked at a gas station. It used to be that each gas pump had a tag that told you how much you were paying in taxes. Those tags are gone. Here’s my suggestion to the oil companies. Put signs on your pumps showing consumers how much profit per gallon you are making and how much the government — state and federal — is charging in taxes.
The profit oil companies make on a gallon of gasoline is minuscule compared to what they pay for the crude oil, refining, distribution and marketing, salaries, taxes, and dozens of other expenses. The oil industry employs tens of thousands of people — it may be millions — creates residual businesses, takes all the risks in drilling and transportation, pays billions of dollars in taxes, and gets blamed for gouging the consumer for unfair “profits” for delivering a volatile product safely to outlets of distribution a few miles from our homes and next to highways that crisscross America. Government agencies, on the other hand, simply cash the checks for the taxes the gas stations collect from their customers. The combined state and federal taxes for California is over 50 cents per gallon. Nevada pays even more. Hawaii is the most heavily taxed state when it comes to gasoline. The United States average is somewhere around 45 cents per gallon.
Politicians don’t want to talk about high gasoline taxes. There are no votes in it for them. In fact, it might anger the American public and produce sympathy for Big Oil. It would expose the fraud of “price gouging” by the oil companies. I’m hopeful if prices remain high that more people will start talking about how state and federal governments are the real problem. Maybe even some in the mainstream media will start asking lawmakers why oil profits of about ten cents per gallon are “obscene” but nearly 45 cents per gallon of taxes is . . . patriotic . . . paying your fair share?
The goal of Maxine and other Socialists is to make voters feel better and make the politicians look magnanimous by scolding the oil bullies.
The next time you read about “excessive” oil profits, remember where the profits are going. Tens of thousands of investors get some of that profit. They invested in oil companies to make a profit. Many of them are retirees who live on fixed income. No one invests to lose money, unless, of course, it’s the government. The money they initially invested helped the oil companies to buy equipment so they could extract oil from deep hard-to-recover deposits. It’s getting more expensive to locate, drill, and transport oil. It doesn’t ooze out of the ground like it used to. Profits insure that there will be oil in the future. If there aren’t “excessive” profits, then there can’t be any research and development.