My friend Jonathan Williams at the American Legislative Exchange Council (ALEC) recently wrote an article that I finally picked up and read today, about how “Big Government Profits Most From Gasoline.”
Lately, we are all hurting at the pump, and there are many reasons. Everyone is quick to blame the oil companies, especially when reports about their profits come in. In this article, Jonathan points out that “In all the crusading against oil profits, one very important fact is being neglected: The biggest winner from high gasoline prices is none other than government.”
“For starters, American motorists pay an average of 47 cents per gallon in state and federal gasoline taxes. If your vehicle uses diesel fuel, you pay more than 53 cents per gallon on average. Taxes on gasoline don’t end there. The government collects billions from energy companies in corporate income taxes, off-shore royalties, severance taxes, property taxes, payroll taxes, the list goes on. According to Department of Energy data, from 1977 to 2004, federal and state governments extracted $397 billion by taxing the profits of the largest oil companies and an additional $1.1 trillion in taxes at the pump—that’s nearly three times what the oil industry made in profits over that same period.”
Wow. If you want relief at the gas pump, stop pointing your fingers to “Big Oil” and start taking a closer look at Uncle Sam.