Posted on 06/04/2014 1:37:53 PM PDT by Kaslin
The Tax Foundation posted the following map of gasoline taxes.
The Tax Foundation says "Gas taxes are generally used to fund transportation infrastructure maintenance and new projects. While gas taxes are not a perfect user fee like tolls, they are generally more favorable than other taxes because they at least loosely connect the users of roads with the costs of enjoying them. However, some of our recent analysis shows that many states do not rely on gas taxes and tolls as much as they could, and instead fund substantial amounts of transportation from other sources like income and sales taxes."
Not That Simple
States with high gas taxes do not necessarily have lower taxes elsewhere. Illinois and California are certainly cases in point. Property taxes in Illinois are over $14,000 on something like a $500K home.
The Tax Foundation notes "rates shown do not include Federal excise taxes of 18.4 cents per gallon."
Nor do they include applicable sales taxes or local gas taxes or Cook County gasoline taxes.
Illinois also has "home rule" sales taxes for various locations within a county. For example, and in addition to special gasoline taxes in Cook County, the Illinois Department of Revenue Tax Bulletin shows that Cicero (in Cook County), has a sales tax of 9.75%, while Dolton (also in Cook County) has a sales tax of 8.75%.
Why Are Chicago Gas Prices So High?
Indiana radio station WBWZ 91.5 asks the question: Why Are Chicago Gas Prices So High?
Customers may also have a desire to blame gas station owners for the high price of gasoline. But Beth Mosher, spokeswoman for AAA Chicago Motor Club, says it’s not their fault.
“Everybody wants to take it out on their local gas station owner why these prices are so high,” Mosher said. “But the reality is when the prices are this high the profit margins for these gas stations are so thin, they are going to make more from a bag of doritos that they are selling you than they are the gas.”
Mosher says the final factor for high gasoline prices can be pinned on the tax man.
“First and foremost, we have to talk about the high taxes in Chicago,” she said. “About 70 cents on the gallon is what people pay in Chicago for gas taxes, really, really a high number, especially given the statewide average is 49 cents on the gallon.”
Our NW Indiana reporter bravely goes where no Hoosier (willingly) has gone before: a Chicago gas station.
Why are gas prices so high in Chicago?
Hosed at the Pump
An Illinois Policy Institute report "Hosed at the Pump" will put things in proper perspective.
That graphic is from August of 2012. Rest assured taxes are higher today.
And Illinois is one of only seven states that charge a sales tax at the gas pump!
The bottom line is Illinois may look like it #8 according to the Tax Foundation, but in reality Illinois, especially Chicago and Cook County, is near the top of the list.
The old,old rule used to be that it cost $500,000 to drill the well and you planned to get $15 million out of it. This was in the early 60s.
Unfortunately our gas taxes are TOO LOW here in Texas.
This has led to the end of new freeways and even the end of adding free lanes to existing freeways - now you PAY THROUGH THE TEETH (at least 10, maybe 20 times what an increased gas tax would have cost you) if you want to travel on a new, limited access highway lane.
Yahoo publishes the profit margin for the major integrated oil & gas companies:
http://biz.yahoo.com/p/120conameu.html
The average net profit margin is 5.10%.
Unless the well is a dry hole. Then the costs of drilling, attempted completion, and reclamation of the site are just an expense.
Before the Bakken boom, wildcat wells in the Williston Basin were producers at a rate of 1 in 4 attempts, which is really attractive. I have worked in areas where that productive well to dry hole ratio is one in 75 (Nevada). The productive wells in the latter case tended to make thousands of barrels of oil per day, so the risk was considered worthwhile by some operators.
Wow, that is an old, old rule. Nowadays, a Bakken well on a 1280 acre spacing (horizontal well), from lease to completion costs about 10 million. Some companies have managed to shave a million or two off of that (pad wells, less earthwork, fewer rig moves), but it is a good ballpark figure.
the VPs at Union Oil said that at that time they had 400 years of reserves that would supply the US if consumption doubled every 100 years.
As a disclaimer, I used to have lunch with them at Little Joes in LA at least once a month so the 400 number could have a little gin mixed in!
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