From the 21 January 2008 Lockport Union Sun and Journal (Lockport, NY) |
GAS PRICES: A TAXING SITUATION If there’s anything we’ve learned over the past few years it’s that high gasoline prices have been caused by evil, greedy corporations. They are abusing American consumers, knowing that we’re a captive audience and we’ll pay what we have to for their product. So, they are making sure we do just that, squeezing every last penny out of us. This far-too-common belief is awfully far-fetched because oil is not sold solely to - or in - the United States. It is a global commodity sold in trade markets the world over and its price is determined by factors of global supply and demand, the former not growing at the same rate as the latter. Escalating prices have very little to do with the avarice of the board of directors of ExxonMobil and everything to do with the oil addiction Americans now share with the rapidly-growing consumer classes of developing nations. Politicians know this but waxing scientific about global economics does little or nothing to grab the attention of consumers and ultimately win their votes. We live in a "60 Minutes" world where sensationalism and over-exaggerations dominate discourse. Many slick elected officials have chosen to play those cards and wildly point the finger at "Big Oil" because one, it represents an easy target and two, the populist tendencies of the accusations really bring in the votes for the alleged heroic legislators who are supposedly looking out for the little guy. We see this all the time at the state level (such as Manhattan assemblyman Bing’s assault on "gouging") and from our federal representatives like Randy Kuhl (another gouging fan) and Chuck Schumer (who seems to host anti-oil press conferences every month). This grandstanding not only helps maintain incumbency but also puts up a stellar smokescreen that masquerades the incomprehensibly-greedy actions of our own government. They would prefer that you not know that the cumulative effect of the taxation of gasoline at the federal, state, and local levels adds considerably to the burden that the growing base resource costs have our pocketbooks. Interestingly enough, if you transposed "politicians" for "corporations" in this column’s opening paragraph it would be factual. If you’ve traveled outside of New York State you see this in black and white. Gasoline costs more, a lot more, in the Empire State. During a business trip to Ohio last week I found gas consistently around $2.89/gallon in the Buckeye State while back home it was $3.29. Think about that: For every 10 gallons that we buy, we’re paying $4 more than they are. New Yorkers are paying 40 cents more for every gallon versus what drivers in a nearby state pay because - as we’re so accustomed to across the board - we are highly-taxed. We pay the highest total gasoline tax in the nation, a collection of excise, spill, state sales and local sales taxes. Our officials also reap an unusual and devious benefit by taxing the federal gasoline tax (18.4 cents) as a component of base cost, meaning double taxation occurs. When it’s all said and done, we’re currently paying 65.3 cents in taxes for every gallon of gasoline. Yes, 20% of what you are paying at the pump gets handed over to the government. Twenty percent! This only looks to get a lot worse. Last week a congressional commission issued a recommendation that starting in 2009 a five-year plan be instituted in which the federal gas tax would increase by 40 cents and then receive annual upward adjustments based on the rate of inflation. Granted, this is only a recommendation, but the rate has not moved since 1993 and the Federal Government has never been an entity to remain static or turn down a tax increase. Gasoline taxes (present and future) are all so very frustrating and contribute to the high price of gasoline and, quite truthfully, the demolition of our standard of living. Sadly, most people don’t see this and never will because our "leaders" purposefully stay away from any detailed analysis of the cost structure of a gallon of gasoline and push the blame onto other parties. The politicians play us like fools, diverting attention away from meaningful study of the issue at hand, study that would show "corporate greed" is something readily found in the halls and House floors of Albany, Washington, DC, and all capitols in between.
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