The Virginia state senators passed a resolution raising the state gas tax another 6 cents. Though Republicans in the House of Delegates are determined to stop the resolution there, the measure highlights a continuing trend across the country. As crude oil prices spike past $140 per barrel, even the government seems unable to help the problem.
Los Angeles Mayor Antonio Villaraigosa announced Wednesday that he wants a half-cent increase for his city. West Virginia has a planned 6-cent gas tax increase scheduled for January 1, 2009. Even New Jersey, with the nations third lowest gas tax rate, is hesitantly considering a hike.
Governments claim they need the gas money to fund new transportation projects. Lawmakers blame the oil companies for the high prices, and many don’t feel government work should stop just because business “greed” has set a high price.
A look at the statistics though, shows that it’s actually state and federal treasuries who earn more—twice as much over the past 25-years—from tax revenues than the big oil companies do from their profits. While Exxon and their bandit gang have been earning their billions, the government has been taking in trillions.
Democratic candidate Barack Obama supports the current federal gas taxes, and has called for more corporate taxes on the oil companies themselves. He said earlier this month, “I’ll make oil companies like Exxon pay a tax on their windfall profits and we’ll use the money to help families pay for their skyrocketing energy costs and other bills,” though it’s unclear how he’ll keep those companies from passing on their increased costs to the consumer at the pump.
Karl Rove countered Obama further in a Wall Street Journal op-ed June 20. He said that oil companies only make about 8.3-cents in gross profit from each dollar sale. The electronics industry’s 14.5-cent profit per dollar sale and the Microsoft margin at 27.5-cents.
On the flip side of the issue, John McCain has proposed an 18.5-cent cut in gasoline rates and a 24.5-cent cut on diesel fuel, which will bring in less money for the government and hypothetically force it to curb spending. And ignoring its fellow states, Arkansas voted down a fuel tax increase, instead choosing to issue bonds to fund its road projects.