Monday, May 5, 2008

give me a break. not the oil companies

I haven't been able to get over the fact that 66.66% of the prospective leaders of our country are pushing to get rid of the gas tax this summer. There is an election going on and I am going to be a bit idealistic and have faith in our government that this wouldn't happen any other year.
Getting rid of any tax gets the masses nice and complacent in the voting booth.

The oil companies have no obligation to pass the savings on to the consumer. My best case scenario sees Shell not having to fork over 20% to pay for the roads that there product is waring down and prices staying at right about three and a quarter at the least for the duration of the summer. That means Exxon's profits are up 20%. I don't see how this could be a good thing: while the oil and gas biz is booming, the rest of us are in a recession (or at least a very slow growth period +.6% GDP last time I heard). Sure, let's throw these guys a party for the next three months while many people are barely paying rent with unemployment checks or worse, moving in with their cousin because their house has been repossessed.

Some may argue that there never should have been a tax or that the roads should have been privatized long ago. However, taxes are not going to go away completely any time soon and this is certainly not the place to start. Also, when would the market ever move away from a cash cow such as this precious fossil fuel of ours and towards alternate sources of energy(please don't get me started on ethanol: see next blog)? There is not a whole lot of incentive when you have fat cash in hand and the folks running the show don't let externalities into the equation. As that supply goes down the demand and price are going to blow up in every ones' faces regardless of whether or not the tax gets lifted.

2 comments:

Jeffrey said...

It will 'feel' good when they remove the gas tax for the summer. That's exactly what it is. A 'feel' good move. The bigger problem, will be when they bring it back. It will be impossible to bring it back without a pretty big hit to the economy.

Moriah said...

Exactly. I sincerely hope the people in this country aren't stupid enough to think this is the "new and improved" Republican....