Surprise! Obama’s Solution To Gasoline Prices
With gasoline prices at the pump approaching all time highs, even inflation adjusted highs, President Obama has just the solution: Higher taxes!
Amid rising gasoline prices at the pump, President Barack Obama urged congressional leaders Tuesday to take steps to repeal oil industry tax breaks, reiterating a call he made in his 2012 budget proposal earlier this year.
Hmm, lets see… make a company’s expenses in the course of business rise, and that is going to make their product cheaper, right?
The White House conceded his plan would do nothing in the short term to lower gas prices.
Oh. Well, so much for that. At least they didn’t try to convince us that it would help, so maybe they are starting to learn.
Now, for the record, I’m actually not against this, at least in theory. I do not think one industry, business, or entity should get any special tax consideration over another. Cities and States use this tactic all the time, however, when it comes to attracting new companies, through tax-increment financing, special laws written just to bring in or retain a certain company with extensive tax breaks. This needs to stop.
When the government, be it Federal, State, or Local, starts to give special deals to one, they are essentially choosing winners and losers in the economy. It would actually be funny, if it wasn’t so serious; the Democrats scream and throw a tantrum any time any sort of tax reductions are even proposed, but when an industry like Ford hints they may move a factory from one state to another, even the Democrat lawmakers in that state fall all over themselves to promise the moon (with no taxes!) in order to keep them there. So while they want to stick it to Big-Whatever on the campaign trail, they know it wouldn’t work, at least not if said politician wants a chance at reelection.
The thing with gasoline is that 18 and some odd cents of every gallon you pump into your car goes to the Federal government, and anywhere from 15 cents or so, up to around 75 cents (if I recall correctly, depending on the state) goes to the state coffers. What is not known or quantified, is how much has to be added to each gallon in order for Exxon or Shell to pay the corporate taxes.
There are so many levels of taxation on businesses that it’s nearly impossible to keep it straight. Heck, I have an extremely small business (with me being the only employee), and I really need the accountant I have to keep it all straight. I couldn’t even imagine how it would work for a multi-billion dollar company, with hundreds or even thousands of employees. But at the end of the day, every single product every company sells must factor all those taxes into the price of said product, the labor costs to produce it (and don’t forget the forced FICA contributions every employer must pay for every employee), etc. All that must be covered.
So while I am in complete favor of having no special carve-outs for any single industry, this is not the right time to add even more complication and dollar amounts to the oil industry. Once we get past this price spike, which I think we will, then I would be more than willing and open to the idea of at least phasing them out.
Now there is a bit of twist here, though; one major customer of the oil companies is the United States Government. It takes a lot of jet fuel, diesel, gasoline, and other fuels to keep the military going with fighters, bombers, tanks, ships, as well as Air Force One, the Presidential Limo, not to mention all the fleet cars used by everyone from Senators all the way down to lowly bureaucrats doing field work. The petroleum industry does provide goods, products, and services that are without doubt vital to our national security. So that has to be taken into consideration when having these debates and discussions.
However, if I were Mister Exxon, and saw every day that the Leader of the Free World took every opportunity to bash my industry and company, I think I would be sorely tempted to throw the switch, bring the entire line to a screeching halt, refuse to drill, ship, refine, or deliver a single drop of gasoline for at least a week. Wonder what that might do to gas prices?
Who is John Galt?