Congress Should Vote To Temporarily Rescind the Federal Tax On Gasoline.

8/22/05 | moose2004

[moose2004]

Gas Prices Are Too High, And Home Heating Oil Is Next.

[RightWhale]

Well, that's one tax. There may be others. Indirect taxes hit everything at every step of the way and because they are more or less hidden it is not easy to list them out. For example, the oil at Prudhoe is produced simultanously with both Federal and State revenue attached as soon as it hits the first pipeline pump station. What is done in this respect in Saudiland or Venezuela or Nigeria I don't know, but no doubt they also attach some kind of charge to the product. Do the giant double-hulled tankers ride for free? Even the King of Brunai who owns everything outright may put a surcharge on exports.

[ExitPurgamentum]

I didn't know that Federal taxes were an integral aspect of the law of supply and demand, aside from the price distortions they create in the market.

Well, you should know and not speak solely of markets for private goods. Tax revenue affects SUPPLY of public goods such as highways, which are funded from the gasoline-tax dollars.

[ExitPurgamentum]

There are quite a few folks around here that do not understand supply & demand and how it affects the market price for goods and services.

And yet, this does not stop them from proposing socialist measures resulting in redistribution of wealth.

[NC28203]

>>>Do you realize that refineries' profits are actually squeezed by rising CRUDE oil price --- oil that they BUY?

Well if that is the case, we are not likely to see the building of any refineries in the current environment. I guess I had the right conclusion, wrong argument. Thanks for the correction.

[ExitPurgamentum]

I am not familiar with the specifics of the oil-refining industry and do not know to what incentives they respond in their capital decisions. I tend to think, however, that they will have incentives to invest if the SPREAD between gas and crude prices increases; that is, if demand for gas outpaces supply of crude. Then they will realize additional profits and expand plants. Alternatively, they may respond to tax incentives, if any such are introduced. I do not see any other sources of incentives.

[kevao]

Well if that is the case, we are not likely to see the building of any refineries in the current environment.

In this or any other environment. We haven't built a new refinery in this country since the 1970s. Current refineries are operating at maximum capacity. Few Americans realize that we actually import substantial amounts of refined product (gasoline) because we haven't the capacity to produce enough of our own.

[Stand Watch Listen]

...I've often wondered why people up north use oil to heat their homes. What is the difference between using natural gas (like we do) and oil up there?

FYI...

http://www.conocophillips.com/newsroom/other_resources/energyanswers/naturalgas.htm

Why aren't there more natural gas pipelines in the Northeast?

Heating oil has been the primary residential fuel in the Northeast for many years, replacing coal in most homes after World War II. Supplying this area of the country with heating oil came logically because numerous ports and rivers can readily handle fuel shipments by tanker and barge. By contrast, large scale use of natural gas for home heating began in the Midwest when pipelines were constructed from fields in Texas and Oklahoma. Eventually, large distribution lines fanned out to western and southern states. The Northeast, however, because of its distance from gas-producing areas and its well-established heating oil market, has lagged behind the rest of the nation in its consumption of natural gas.

Logistical issues also have been a deterrent to residential gas use in the region. Long-distance transmission pipelines and underground municipal distribution systems are expensive to build and can be disruptive during construction in densely populated areas. Despite these obstacles, new pipelines are being built, and demand for natural gas is increasing in the Northeast, particularly for clean-burning electric power generation plants. For example, in 2002 the natural gas industry spent an estimated $4.6 billion to construct 3,700 miles of new pipelines - a 50 percent boost in spending over the previous year.

[Roos_Girl]

See post #45

[BureaucratusMaximus]

But I guess that is what its going to take to wake everyone up.....

No...we all lived through 8 years of the Sink Emperor with no significant idealogical changes in this country...I thought 9/11 was going to be the "wake up" call...and alas...people quickly forgot. Barring another depression like there was in the '30s or another global war...people will not be waking up anytime soon. 3000 dead wasn't enough...its going to take thousands more dead and/or the economy in the tank before people wake up...I'm convinced of that.

[JoeSixPack1]

http://www.foxnews.com/story/0,2933,166352,00.html

on subject

[steveyp]

Demand hasn't decreased enough to slow the increase in price. Removing the taxes would likely push demand back up to the current levels (i.e. removing the tax does nothing for supply).

Only in the last week when it cost me $40 to fill the Ody's tank did I go from anger/frustration to taking action to reduce my demand.

[wolfcreek]

AMEN,that's a wonderful idea!

[moose2004]

I've voted Republican in every election (federal, state, and local) since 1980, I'm an entrepeuner with my own business, and I don't take people like you seriously.

[BureaucratusMaximus]

There are quite a few folks around here that do not understand supply & demand and how it affects the market price for goods and services.

And yet, this does not stop them from proposing socialist measures resulting in redistribution of wealth.

Hear Hear!

Its really not a difficult concept...the only government intervention we need is the government disinvolving themselves in every aspect of life that they, over time, have taxed, regulated, mandated, assumed power over, or brokered a level of intrusiveness that overstep the powers of the federal government and that scale back and sometimes, outright eliminate the freedoms we should enjoy, as spelled out in our Constitution.

[nicollo]

In the name of budget reduction, in 1993 Clinton added 4.3 cents to the Federal gasoline tax. Nobody noticed at the time, since the price of oil was tumbling following the Gulf War. At the time it was the only portion of the Federal gasoline tax that DID NOT go into the Highway Trust Fund. Cowing to the Republican Revolution, Clintoon signed a Highway bill that redirected those 4.3 cents to the Trust Fund. It should have been repealed altogether, but at least the principle was restored. The Trust fund is running a surplus, btw.

A couple other things about the gas tax (and taxes on truck tires and deisel and other fuels):
- The Fed. Gov takes a 5% cut on it, all for having the states collect the money, send it to Washington, then having their Reps and Senators fight over its dispursement every six years, as the bureaucrats send the money back to the states -- less the Federal commission -- along with all those lovely Federal rules.
- The apportionment by state is not tied to state contributions. CA and NY are some of the biggest losers, I believe. Alaska is a huge winner.
- I'm not sure what the figure is, but a good chunk of the Trust Fund goes to Other Than Highways: be it local pork for Congressmen or mass transit systems (thank car drivers next time you ride the DC Metro...)
Here for a House hearing on repealing the tax in order to reduce the cost of gasoline: THE IMPACT ON TRANSPORTATION PROGRAMS OF REDUCING THE FEDERAL FUEL TAX -- from back in 2000, during the Dimocrat constructed gas crisis of that election year.

[Reagan Disciple]

<> Look East young man. The Red Dragon feeds.

[hedgetrimmer]

And what do we do with our highways, let them degrade?

Too late. Besides the Department of transportation is not spending money on highways. In the early 1990s they started an initiative to an agency pushing "multi-modal" transportation. They want to force people out of their cars and into public transit. Now they are spending your tax money, not on maintaining roads, but giving it away to counties and cities to build "smart growth" developments. Those are high density housing complexes that do not have parking for cars. They are built on "transportation hubs" and have tiny government controlled business spaces so you can go downstairs from your undersized apartment to get your dinner at the taco shop on the ground floor. Then you can eat it at the park (no private balconies or back yards) then ride the bus or train (where you are always in the public eye)to where the government thinks you ought to go since they control where trains take on passengers and let them off.

The beauty of it all( if you are into a communistic ideology) is that the government controls the size of the apartments, how much water you can use, whether or not you can park a car, and what businesses can occupy the ground floor. The DOT is building housing through grants that model the soviet style housing blocs in a remarkable and frightening way.

[moose2004]

Thanks for the information.

[hedgetrimmer]

It's called supply and demand and we can't repeal it no matter what we think.

I rather doubt that. Its more like government interference in the marketplace .