Wednesday, April 02, 2008

A Gallon of Political Gas

Three facts that weren't widely reported when Rep. Edward Markey (D-Mass), chairman of the House Select Commitee on Energy Independence and Global Warming scourged oil industry executives yesterday.

1. The government at all levels takes an average of $.47 in direct taxes from the consumer for every gallon of gasoline sold in the U. S. This does not include billions paid in income taxes by the companies along the production chain. It is just the amount paid at the pump by the consumer. This compares to $.27 in profits per gallon that return to the "greedy" oil companies. If the major companies are greedy for collecting $.27, what does that make Rep. Markey and the other politicians who routinely raise the price of gas with their hidden taxes? Put another way, the oil companies will put gas in your tank for $.27 a gallon. What does Rep. Markey do for his take of nearly twice as much?

2. Taxes paid to the government by major oil companies routinely exceed every cent of revenue made in the U. S. For example, Mobil Exxon, the largest of the companies and the one regularly scourged for its profits, has paid the government over the last five years $19 billion more in taxes than it received in revenues from the U.S. market.

3. Nearly every energy-related action of government at every level increases the price of gas. The list is long: drilling restrictions offshore and in Alaska, refusal to license new refineries, routine harassment of executives.
One can only wish that executives would point fingers at the real culprits. When gold has reached $1,000 per ounce, corn is above $25 per bushel, and nearly ever currency in the world is setting a record price in dollars, the problem isn't with the producers. The problem is the politicians and the damage they've done to the dollar.

It's not that oil is worth so much, the bigger problem is the dollar is worth so little. Every dollar of increase in real price since 1974 has been matched by an equal amount of inflation. In other words, if only Rep. Markey and his colleagues were handling their responsibilities to guard the economy by maintaining monetary value, gasoline at the pump would cost half of what it does today.
Take this simple test: Imagine for the moment that Rep. Markey was chairman of Mobil Exxon and the company was managed by congressional staffers. Feel better?

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