Democrats Propose A Federal Tax Holiday for Gasoline
A sixty day Federal tax holiday is being proposed.
This from the Raw Story:
The measure, proposed by Sen. Bob Menendez (D-NJ), would reduce the cost of gas
by $0.184 per gallon and the cost of diesel by $0.244 per gallon. The move,
aides say, will provide $100 million dollars per day in relief.
Democrats say the money will be made up by cutting six billion dollars
in tax breaks to oil firms. Currently, the money from the federal gas tax goes
to the Highway Trust fund.
Will this happen most likely not, go to the Raw Story to read the rest of the story.
posted by B O B @ 9:29 AM
2 comments
2 Comments:
I'm all for a tax cut, even if it comes from the Democrats as a politically disingenuous move. Now, if only the government would cut spending as well we wouldn't be saddling our kids with so much debt.
Did anyone catch what Nancy Pelosi said?
"We have two oilmen in the White House ... The logical ... follow-up from that is $3-a-gallon gasoline. There is no accident. It is a cause and effect ... a cause and effect."
What an idiot. Just when I think I despise Bush and what he has done to the Republican party, along comes this moron to show me how stupid the Democrats can be. When will a viable third party candidate arise?
It all seems so simple, tax the oil companies more in the form of an income tax increase, while reducing what they pay per gallon sold. Problem is, there is no law saying that they can't collect all taxes imposed upon from those they sell to.
In the oil business, there are extractors, refiners, distributors, and retailers. This tax credit they are talking about would affect extractors and refiners, their cost would go up. They collect all costs from those they sell to. Do you think they won't increase what they charge the distributor to collect this increased cost? Just because the retailer will no longer have to send the fed 18c per gallon doesn't mean then, that the price at the pump will go down, it will remain about the same because tax policy INCREASED THE COST up the supply chain.
This all feels good, but won't work without price controls. This legislation would lower a cost in one place, and increase it in another. Tax policy cannot fix this problem, oil is a COMMODITY, a scarce one, and its ultimate price is going to be fixed by the market, as long as there is one.
High profits in any industry will bring more investment, and new players. Entry into the oil market is difficult, but not impossible. Banking and pharmaceuticals yield more than twice the net profit to sales compared to the oil industry. We need to leave this alone, this fix is worse than the problem.
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