Bill would nearly double federal gasoline tax

By Keith Laing December 02, 2013

Rep. Earl Blumenauer (D-Ore.) is introducing legislation that would nearly double the 18.4-cents-per-gallon federal gas tax that is traditionally used to pay for federal transportation projects.    Blumenauer's bill would increase the gas tax by 15 cents, matching a proposal that was included in the 2011 Simpson-Bowles budget reform recommendations.

The legislation would result in drivers paying an extra 33.4 cents per gallon on their purchases, in addition to state taxes.   Transportation advocates have pushed for a gas tax increase to close an approximately $20 billion shortfall in infrastructure funding that has developed as cars have grown more fuel efficient.  The current tax of 18.4 cents per gallon brings in about $35 billion per year. The last transportation bill that was passed by Congress included approximately $54 billion in funding per year, which transportation advocates said was barely enough to cover the repair needs of the current U.S. infrastructure system. ….To Read More…..

My Take – Well, so much for those evil greedy oil companies!  It amazes me how corrupt these politicians are.  When the price of gas goes up for legitimate reasons they accuse the oil companies of collusion, corruption and criminal behavior, in spite of the fact that every investigation into those allegations has been proven false for decades.  And they know that, which really makes these charges despicable.  But when they want to extort more via taxes - it isn’t greed, corruption or criminal - it’s for the public good, and the resulting rise in price is perfectly acceptable to these clowns. 

Let’s take a look at this.  According to the U.S. Department of Energy, here's an approximation of where each dollar you spend on gas goes:

Taxes: 13 cents

Distribution and Marketing: 8 cents

Refining: 14 cents

Crude oil: 65 cents

Okay, let’s do a really quick bit of math.  The numbers 8, 13, 14, and 65 total 100, so where’s the profit?  It’s added in those costs.  What is the real profit to the oil companies?  First off, let’s question this a bit.  Where does the vast majority of crude oil come from?  And the answer isn’t from private companies.  Somewhere around 90% of all the crude is produced by government owned entities, largely, socialist states or governments, like Venezuela, and they determine the price of crude oil, not the oil companies.   

In Ohio we pay approximately 46.4 cents a gallon in taxes, including the 18.4 cent federal tax.  Currently I pay about $3.20 a gallon.  That means the price at my station would go up to at least 3.38 overnight, bringing up the total tax to 83.2 cents.  If my math is right that means these various governments collectively have - approximately - a 25% profit margin from gasoline.  Gasoline produced from oil they have no part in finding, drilling, shipping, refining, transporting to the stations or selling to the public.  The privately owned stations make almost nothing on gasoline.  The gasoline companies make about 10% and they still have to find more oil, drill for it, refine it….etc….out of that 10%.  What do governments do with the money they extort?  Since the roads and bridges are falling apart all over the nation - who knows where that money goes - and the federal government wants to double that money, of which they have no idea where it goes. 

What could be more reasonable than that?