Posted on 05/23/2008 5:46:26 AM PDT by coffee260
Q:
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Does the government really make more in taxes from the sale of a gallon of gasoline than the oil companies do?
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A:
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Possibly. Both taxes and profits account for a large share, but which is larger depends on too many unknown factors to allow for a clear answer.
Lets start with the basics. According to the Energy Information Administration, in February 2008 state and federal excise taxes accounted for 13 percent of the average price per gallon of regular gasoline sold in the U.S.
![]() And even these figures dont account for income taxes that the companies pay on their profits. Those taxes would drive the tax total higher yet, but we know of no authoritative source that has attempted to break down how much income tax should be allocated to each gallon of gasoline. One big problem in trying to calculate such a per-gallon amount is that income can be earned on the sale of any number of products besides gasoline, such as diesel, home heating fuel, jet fuel, natural gas, crude oil and whatever else a company might sell. The same goes for profits. The EIA does not attempt to calculate an average figure for the profit earned on each gallon of gasoline. "Its not that these guys [the oil companies] are obfuscating; its that the processes are intertwined," EIA economist Neal Davis told FactCheck.org. He added that trying to reduce profit figures to a per-gallon average for gasoline would be "heroic at best" and "sadly misinformed at worst." Nevertheless, the oil industry has tried to do something close to that. A publication from the American Petroleum Institute, the industrys principal lobbying arm, displays a graphic stating that "taxes" made up 15 percent of the price of gasoline at the pump in 2007 (that figure comes from EIA) and showing a figure for "earnings" (a measurement API prefers to straight "profit") of 8.3 percent. This figure is the average earnings for the industry per dollar of sales. On closer examination, however, that 8.3 percent earnings figure turns out to be after-tax income. The pre-tax profit margin would be considerably higher. And thats only an average. The profits of any particular oil company could be higher or lower. For example, in 2007, ExxonMobil's after-tax earnings were 10.4 percent, much higher than the industry average. Furthermore, any particular gallon of gasoline might have passed through several companies as the product moved from the oil well to the refiner to the retailer that owns the pump. Another complicating factor is that the percentages change from month to month, sometimes dramatically. State and federal excise taxes are generally fixed at a certain number of pennies per gallon, so as the price of gasoline rises, the percentage paid in excise taxes goes down. As shown in this breakdown, state and federal excise taxes made up 32 percent of what motorists paid at the pump in January 2000, when the average price for regular was only $1.29. "Unfortunately, theres no real simple answer," says Lucian Pugliaresi, president of the Energy Policy Research Foundation, which conducts economic analyses of energy issues and is supported by oil companies. It depends on when the gasoline was purchased. "If you bought it right now, Id say the government is making more." If the gasoline was purchased a month ago or last year, that may not have been the case. And the answer further depends on what type of company the question refers to. Refineries, Pugliaresi says, are hurting right now. "If youre an independent refinery, the answer is definitely theyre making a lot less than the government." So, to the question of whether motorists pay more per gallon to the government than to oil-company profits, we can say only this: The answer depends on the state in which the fuel is purchased, the company that produced it and sold it, and when the motorist bought it. -Lori Robertson |
How can we say it is all profit for the government unless we know the cost of building and maintaining the highway system.
If the gas tax is eliminated, it will be replaced by higher taxes somewhere else.
We will always pay until government waste and services are cut
I’m available for adoption if you are needing children.
I meant in the US. sorry
Little Eddie Haskell aka Dick Durbin, held up a picture stating Chicago gas highest in nation, what he did not tell you is that there is 79 cents worth of tax in that price, now who is making the money. Blogs, the Governor, stated he was fine with that, as it will bring in about 225mm in extra money.
ferv888
( Why do you think that? )
Well after going back and reading what i wrote. It didn’t make much sense, did it? Sorry! Too much coffee this morning.
Actually, it has taken 35 years to get here. They have NOT been “easy” years by any stretch. ($10 per barrel was near poverty for most of us.)
The current trend is not looking good for expansion either.
What does the government produce? Nothing. They confiscate money through taxes. Period. If you want to call public works a form of productivity have at it. But I don’t think what they do with tax dollars, while necessary in many ways, justifies the legal theft of private property. You want to maintain roads and infrastructure? Fine. But when the government does something, including maintenance, they are insufficient and wasteful.
Complain to your Congress critters.
Government takes their cut and pisses it away.
That is why our government will do noting to allow drilling. Oil companies make a nice handsome profit for their stock holders, and the government brings in terrific tax revenue....Oh, forgot to mention, many in the government, their family and friends, own oil stock paying the nice dividends, growing in value. No conflict there. The lip service on taxing oil companies, perhaps opening up some drilling, building some refineries will continue, but nothing will be done. The way it stands now, it's a win/win for oil and government. The only losers are the poor schlubs who have to fill up their gas tanks. I suppose I can be a hypocrite, buy oil stocks, and contribute to the destruction of our economy by supporting this nonsense.
Please supply a definition of "gouging" that includes the basic law of supply and demand doesn't includes some twisted, self-serving concept of "fairness".
I was looking for that information.
Yes, and those of us in Arizona were screwed because the allocation was based on the census population (1970) figures. The actual population has risen by a HUGE percentage and that did NOT include the winter visitors (snowbirds) who swell the numbers by dozens of thousands.
A friend of mine owned a gas station in the snowbird area. He had lines stretching as long as 1/4 mile. He pumped gas into a a lady from the ‘blue-haired, bloody mary’ crowd and commented that he thought he had seen her earlier in the day.
She replied, “Yes but I went to the store across the street and wanted to make sure I was full!”
He shut down the station and never reopened. Turned it into a garage.
Price fixing, as defined when all competitors conspire to set a price that does not represent what the true market would be (which I cannot give an example of ever happening) should be governed. As for gouging, it is well-accepted that in times of natural disaster, companies are under the watchful eye of government (at all levels) for repair work and resources.
Note that I am definitely not saying that oil companies are engaging in any of the above.
Moreover, during times of natural disaster, companies should be able to make any amount of money they can off the disaster.
It's the same here in the states. We get royalty checks monthly from just this kind of situation. We own the land, the oil companies drilled, we get a small percentage. If we declined their offer, they would just go to another section close by and drill there to get to the oil on our land.
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