With the latest outrage at the ever growing gas prices many have proposed the so called “windfall-profit” tax. Now my question is who do you think will end up paying this tax you or the corporations?
It’s a rhetorical question, the answer obviously is you.
The people that cry out for this tax fail to mention the break down of oil costs, which for a $3 a gallon price goes as follows:
- Gasoline Retailer $.01 cents per gallon
- Oil Company $.08 cents per gallon
- Refining $.29 cents per gallon
- Marketing/Distribution $.32 cents per gallon
- Taxes $.59 cents per gallon
- Cost of crude $1.71 per gallon (delivered)
That means the corporations make 8 cents (2.5%) while the government makes 59 cents (20%). Now the oil corporations are not innocent or not responsible for growing prices, but they are not the biggest cause of this price increase.
The real solution would be to try to get the companies to cut their profits for a while and at the same time to suspend the tax on gas, but this will never happen. Just think about this statistic:
- Over the last 20 years, gasoline per gallon has increased roughly 60%, which equals an annual average increase of only 3%, which is less than the average rate of inflation. While during the same 20 year period however, the salary of every member of Congress has increased 250% or 12.5% per year. More than four times the average rate of inflation.
So how can we expect our corporations to reduce their profit when the biggest beneficiary of high gas prices refuses to do so? For more on this read
the great column by JB Williams.
