. August 10, 2007 SouthAmerica: Yesterday, when President Bush rejected increasing the federal gasoline tax by 5 cents per gallon for three years, and he said this increase in gas tax could affect economic growth, and his usual Blah, Blah, Blah⦠He was actually saying to House Transportation and Infrastructure Committee chairman James Oberstar, D-Minn., and also to the American people: You have the nerve to make a proposal to cut into the already âmeagerâ profits that the American Oil Companies are making, for example Exxon/Mobil alone made US$ 40 billion dollars in profits after tax in 2006. Never mind the money made by the entire oil producing industry. How do you expect companies such as Exxon/Mobil to survive as a viable corporation and also the rest of the oil producing companies when the 5 cent gas tax it is going to cut into their profits all the way to the bone. Then Bush ended his speech by saying: â Besides Dick Cheney and I are heavily involved with the oil industry and we are going to fight tooth and nail to keep the profits where they belong - in the coffers of the oil companies. Screw the bridges and the infrastructure around the US, and the American people should find another way to move aroundâ¦. - just avoid using the bridges. Quoting from the article that follows: âHouse Transportation and Infrastructure Committee chairman James Oberstar, D-Minn., on Wednesday proposed increasing the federal gasoline tax by 5 cents per gallon for three years to raise $25 billion to fix bridges around the country. More than 73,000 bridges in the U.S. are rated "structurally deficient" by the Transportation Department.â By the way, the US$ 25 billion dollars for 3 years translates to a little over US$ 8 billion dollars per year. ************** âBush rejects gas tax for bridge fixesâ The Dallas Morning News â August 10, 2007 WASHINGTON â President Bush on Thursday rejected a gasoline tax increase to repair thousands of structurally deficient bridges like the one that collapsed in Minneapolis, pointing the finger instead at Congress for what he called misguided spending policies that have neglected high priorities in favor of pork politics. The president's broadside triggered a furious reaction from congressional Democrats, who complained that he was in no position to lecture anyone on priorities. â¦Mr. Bush was at his most cutting on the Minneapolis bridge issue. House Transportation and Infrastructure Committee chairman James Oberstar, D-Minn., on Wednesday proposed increasing the federal gasoline tax by 5 cents per gallon for three years to raise $25 billion to fix bridges around the country. More than 73,000 bridges in the U.S. are rated "structurally deficient" by the Transportation Department. "My suggestion would be that they revisit the process by which they spend gasoline money in the first place," Mr. Bush said. Noting that committee members designate funds for pet projects, while the rest is set by formula, the president said: "That's not the right way to prioritize the people's money. So before we raise taxes, which could affect economic growth, I would strongly urge the Congress to examine how they set priorities. And if bridges are a priority, let's make sure we set that priority first and foremost before we raise taxes." ⦠Source: The Washington Post and The New York Times contributed to this report. http://www.dallasnews.com/sharedcontent/dws/news/nation/stories/081007dnnatbushtaxes.3805f53.html ************ âBush Dismisses Proposal to Raise Gas Taxâ By JENNIFER LOVEN The Associated Press â August 9, 2007 WASHINGTON - A week after a deadly bridge collapse in Minneapolis, President Bush on Thursday dismissed raising the federal gasoline tax to repair bridges at least until Congress changes how it spends highway money. "The way it seems to have worked is that each member on that (Transportation) committee gets to set his or her own priorities first," Bush said. "That's not the right way to prioritize the people's money. Before we raise taxes, which could affect economic growth, I would strongly urge the Congress to examine how they set priorities." About $24 billion, or 8 percent of the last $286 billion highway bill, was devoted to highway and bridge projects singled out by lawmakers. The balance is distributed through grants to states, which decide how it will be spent. Federal money accounts for about 45 percent of all infrastructure spending. The Democratic chairman of the House Transportation Committee proposed a 5-cent increase in the 18.3 cents-a-gallon federal gasoline tax to establish a new trust fund for repairing or replacing structurally deficient highway bridges. More than 70,000 of the nation's bridges are rated structurally deficient, including the bridge that collapsed over the Mississippi River last Wednesday. The American Society of Civil Engineers says repairing them all would require spending at least $9.4 billion a year for 20 years. Rep. Jim Oberstar, D-Minn., says his tax-increase proposal would raise about $25 billion over three yearsâ¦. Source: http://www.forbes.com/feeds/ap/2007/08/09/ap4005074.html .
Bush is wrong. Again. Demand for gasoline is largely inelastic. Over the past few years we've seen gas go up and down by more than 50 cents a gallon without any apparent impact to the economy. If the price of gas were raised by 5 cents it would be virtually unnoticed -- the refiners would still sell the same number of gallons (inelasticity) and the economy would remain unchanged. On the other hand, revenue from the gas tax -- if it is spent wisely on bridges that really need to be fixed and without pork barrel 'pet' projects -- the economy would see a net gain through domestic hiring, stimulating demand for materials and a long-term boost from transportation efficiencies. The only reason Bush is against the tax is so he can say he didn't raise taxes on his watch. It's dumb politics at the expense of what's right for the country.
. August 17, 2007 SouthAmerica: Reply to Jamis359 You hit the nail right on the head. I was being sarcastic on the above posting, but you got the idea of what I was trying to say. You said: âOver the past few years we've seen gas go up and down by more than 50 cents a gallon without any apparent impact to the economy.â Here in New Jersey the price fluctuation at the gas pump has been around $ 1.00 in the last 2 years. For example: gas price it did reach $ 1.99 per gallon on the eve of last November elections. The following day right after the elections the gas prices at the pump started moving up once again, and reached a price of over $ 3.00 per gallon at the beginning of this summer. The major oil companies knows how to play all kinds of games year after year such as shutdown refineries for maintenance, and so onâ¦.to manipulate the price of gas the consumers pay at the pump. There is no question about that in reality the 5 cents that we are talking about can go to one of two places: 1) To the coffers of the major oil companies (as it is the case today) 2) A 5-cent gas tax â could go to fund the US transportation infrastructure. ******* SouthAmerica: Reply to Reneqen No. The gas taxes should go to maintain the current and also build new infrastructure related to transportation, such as roads, bridges, tunnels and so onâ¦. .
. SouthAmerica: Reply to Kin2 I am talking about this specific 5-cent gas tax. This 5-cent would be an addition to the gas tax that we are already paying at the pump - if I remember correctly the gas tax in New Jersey it is lower than the current gas tax that people pay in New York state. Some of the gas tax are already being used to subsidize other types of mass transit. .
So what is the price for gasoline in the states? In the Netherlands, the current rate is about 1.35/1.40 EURO a liter. Which is about 5.10/5.30 EURO a gallon. The price in the states is much lower, right?
I've heard the oil companies make about 9 cents profit per gallon of gasoline. Whereas the federal and state taxes are around 50 cents per gallon. Perhaps instead of talking about "big oil" its time to start talking about "big government."
Well.... that's what the oil companies want you to believe. The cost to explore and lift oil runs about $30/bbl. The market price is around $70. That's about 50 cents profit per gallon of gasoline. When they compute the gasoline profit, they use the $70 oil figure. That's fine if the refinery procured the oil on the spot market, but what if the refinery is owned by an oil company that lifted their own oil at $30? Now you're talking 60 cents at least per gallon of gas. ExxonMobil has $32 billion in cash on hand -- it had to come from somewhere, and I'm sure it didn't trickle in at 9 cents per gallon.
. August 18, 2007 SouthAmerica: Here is the answer for some of your questions. In August of 2007 the federal gas tax alone equals 18.4 cents for every gallon purchased. On top of that we have the state gas tax of each individual state. Each state has its own gas tax rate as you can see below on a table showing the rates as of April of 1993. Since then many states changed their gas tax rate for example the enclosed article mentioned the current gas tax rate in New Jersey at 14.5 cents a gallon is the second lowest in the country. The Average Total Gas Tax as of April 1993 was 32.9 ¢/gallon. The Tax Foundation reported on September 13, 2005 that the Average Total Gas Tax had increased to 45.9 ¢/gallon. (Reminder: In addition to federal and statewide taxes, often consumers pay local excise taxes on gasoline purchases.) *** United States of America The first U.S. state tax on fuel was introduced in February 1919 in Oregon. It was a 1 cent per U.S. gallon (0.3¢/L) tax. In the following decade, all of the U.S. states (48 at the time), along with the District of Columbia, introduced a gasoline tax. By 1939, an average tax of 3.8¢/gal (1¢/L) of fuel was levied by the individual states. While state fuel taxes had been around for more than a decade, the first federal gasoline tax in the United States was created on June 6, 1932 with the enactment of the Revenue Act of 1932 with a tax of 1 cent/gal (0.3¢/L). The U.S. federal gasoline tax as of 2005 was 18.4¢/gal (4.86¢/L), and the gasoline taxes in the various states range from 10 cents to 33 cents, with an average about 22 cents per U.S. gallon (5.8¢/L), making the average combined tax on gasoline 42¢/gal. Unlike most goods in the U.S., the price displayed includes all taxes, rather than being calculated at the point of purchase. Record gasoline prices are constantly in the headlines, which leaves many asking why prices are so high. While supply and demand are the primary determinants of gasoline prices, a significant portion of the price consumers pay at the pump can be attributed to gasoline taxes. In fact, the federal gas tax alone equals 18.4 cents for every gallon purchased. In 1932, the federal government imposed the first federal gas tax. It began as a temporary levy with a rate of just 1 cent per gallon. Over the years, the tax burden has increased significantly. The Revenue Act of 1941 made the federal gas tax permanent and increased the rate to 1.5 cents per gallon to help fund the war effort. A decade later in 1951, the tax was increased to 2 cents per gallon to assist in the funding of the Korean War. After President Eisenhowerâs idea of an interstate highway system had been instituted, the federal gas tax was raised to 4 cents per gallon in 1959. As recent as 1981, the federal gas tax remained at 4 cents per gallon. Significant tax increases in 1982, 1990 and 1993 increased the federal gas tax by 14.4 cents per gallon, or 360 percent from 1981 levels. In 1919, Oregon became the first state in the nation to place a tax on gasoline and every state has subsequently adopted this form of taxation. This year, according to the Energy Information Administration the average state gas tax is 20.8 cents per gallon. In addition to statewide taxes, often consumers pay local excise taxes on gasoline purchases. How is this tax money spent? The head of the U.S. Dept. of Transportation stated on 15 Aug. 2007 that only about 60% of our federal gas taxes are used for highway and bridge construction. The remaining 40% goes to other, unrelated uses. ************** âN.J. gas tax hike debate continuesâ By Trish Graber August 11, 2007 New Jersey legislators are considering whether to push forward what may be an unpopular solution to fund an estimated $7 billion in bridge repairs: raising the gas tax. New Jersey's gas tax was last raised in 1988. It remains at 14.5 cents a gallon, the second lowest in the country, according to the Tax Foundation, a Washington, D.C.-based research organization. The tax helps fund transportation projects through the state's Transportation Trust Fund. A single penny increase would bring in an estimated $53 million annually, which could expedite some repairs. The trust fund is set to expire in 2011. Senate Minority Leader Leonard Lance said the state must act. "I don't like to raise taxes," said Lance, R-Warren/Hunterdon counties. "We have to analyze the Transportation Trust Fund." Sen. Stephen Sweeney said if all else fails, he would not rule out a gasoline tax increase. But he would only support a proposal if the funds were constitutionally dedicated to road and bridge repairs. Last week, the New Jersey Department of Transportation found that 700 of the state's 6,400 bridges are structurally deficient and 1,500 are obsolete. Corzine has said it could take up to $7 billion to fix the deficient bridges. Assemblyman Mike Doherty blamed the state's situation on continuous spending on what he believes are non-essential initiatives, such as attempting to bond $450 million for stem cell research -- which the public will be asked to approve in November. Doherty, R-Warren/Hunterdon, believes if the state invests in bridge repairs over time, a gas tax hike is avoidable. "I think it can be done," he said. "It's a matter of priorities." "I think there's a larger role for the federal government to play in these transportation issues," Assemblyman John Burzichelli, D-Paulsboro, said. "Every time the state acquiesces and does something the federal government should do, they just go and spend money somewhere else." In Congress, officials last week proposed a 5-cent increase in the 18.3-cent-a-gallon federal gasoline tax to create a new fund for repairing or replacing structurally deficient highway bridges. President Bush dismissed the idea, at least until Congress changes the way it spends highway money -- 8 percent of which was spent on individual projects in the last $286 billion highway bill, the Associated Press reported. Gov. Jon Corzine has not said how the state will pay for bridge repairs. He has proposed making money off the state's toll roads through a financial deal he has yet to unveil. Source: http://blog.pennlive.com/lvbreakingnews/2007/08/nj_gas_tax_hike_debate_continu.html **************** Comparison of State and Federal Gasoline Taxes State Gas Tax Rate as of April, 1993 (cents per gallon) Alabama 18¢ Alaska 8¢ Arizona 18¢ Arkansas I8.7¢ California 17¢ Colorado 22¢ Connecticut 28¢ Delaware 19¢ DC 20¢ Florida 11 .6¢ Georgia 7.5¢ Hawaii 24 .8¢ Idaho 21¢ Illinois 19¢ Indiana 15¢ Iowa 20¢ Kansas 18¢ Kentucky 15 .4¢ Louisiana 20¢ Maine 19¢ Maryland 23 .5¢ Massachusetts 21¢ Michigan 15¢ Minnesota 20¢ Mississippi 18 .2¢ Missouri 13¢ Montana 21 .4¢ Nebraska 23.3¢ Nevada 24¢ New Hampshire 18 .6¢ New Jersey 10 .5¢ New Mexico 17¢ New York 22.9¢ North Carolina 22.3¢ North Dakota 17¢ Ohio 21¢ Oklahoma 17¢ Oregon 24¢ Pennsylvania 22 .4¢ Rhode Island 26¢ South Carolina 16¢ South Dakota 18¢ Tennessee 20¢ Texas 20¢ Utah 19¢ Vermont 16¢ Virginia 17.5¢ Washington 23¢ West Virginia 20.4¢ Wisconsin 23.2¢ Wyoming 9¢ Average 18 .8¢ State Average Rate = 18 .8 ¢/gallon Federal Gas Tax Rate = 14 .1 ¢/gallon Average Total Gas Tax = 32.9 ¢/gallon Source : Tax Foundation computations based on Federal Highway Administration data . .