Belle of Liberty

Letting Freedom Ring

Friday, March 23, 2012

Gas Pains

Americans are becoming increasingly worried about the rising price of gasoline.  Normally, the price wouldn’t rise until Memorial Day, when the official summer holiday begins and people use their cars more often.  Demand drives a good deal of the pricing, but so does the government’s environmentalists who want to use taxes as a means of punishing automobile drivers and force them not to drive, buy alternative fuel vehicles, or bicycle.

In fact, they want to drive us, quite literally, into communes.  That is the object of Sustainable Development/Smart Growth and whatever new nom de guerre the Socialists can think up to hide their activities until it’s too late.

F.A. Hayek’s book, Road to Serfdom, had a prescient title.  We are on the road to serfdom.  The Progressives want to force us into high density communes, where automobiles will either be discouraged or banned outright, as they are in some experimental communities in Germany.  One way to do this is to make the cost of buying and running a petroleum-fueled vehicle too expensive for the average driver.  Hence, the higher price of oil.

Here is a breakdown of gasoline prices for the week of March 12, courtesy of

Distribution and Marketing Costs and Profits                        $0.25
Crude Oil Cost                                                                        $2.92
Refinery Cost and Profits                                                       $0.45
State Underground Storage Tank Fee                                                $0.02
State and Local Sales Tax                                                       $0.10
Retail Prices                                                                            $4.38

But according to Mark Perry’s blog on, the tax ratio is somewhat different.

The map from API shows gasoline taxes by state (combined local, state and federal), which range from a low of 26.4 cents per gallon in Alaska to a high of of 66.1 cents per gallon in California, averaging 48.1 cents per gallon across all states.  How does that compare to oil company industry profits per gallon?

According to this post on Exxon Mobil’s Perspective Blog , “For every gallon of gasoline, diesel or finished products we manufactured and sold in the United States in the last three months of 2010, we earned a little more than 2 cents per gallon. That’s not a typo. Two cents.”  
What’s more, according to Exxon-Mobil’s blog, the rise in gasoline as a commodity is relatively low compared to other global commodities such as cotton, which experience a 167.7 percent increase from March 2010 to March 2011.  Silver went up 109 percent, and corn 82.7 percent thanks to, you guessed, the failed experiment of ethanol.  Another interesting commodity whose price rose significantly was uranium (56.2 percent).

ExxonMobil is one of the largest taxpayers in the United States.  Last year, their total taxes and duties to the U.S. government topped $9.8 billion, which includes an income tax expense of $1.6 billion. Over the past five years, they incurred a total U.S. tax expense of almost $59 billion, which is $18 billion more than we earned in the United States during the same period. Critics often try to ignore these facts by saying the oil and gas industry receives “subsidies.” But what they really mean is that they want to increase our taxes by taking away long-standing deductions for our industry while leaving these same deductions in place for other sectors of the economy.

What’s more, the largest producers of oil are state-owned companies, not private sector companies like Exxon-Mobil or Sunoco.  Think Saudi Arabian Oil Co. (No. 1); National Iranian Oil Co. (No. 2); Iraq National Oil Co. (No.3); Kuwait Petroleum Corp. (No. 4); and Petroleos de Venezuela, SA .  Saudian Arabian Oil Company is far and away the biggest player, with over 19 percent of the world’s reserves.

Meanwhile, the United States is sitting on plenty of oil and natural gas.  But those fuel reserves would mean freedom for American citizens, and that’s something our government, governments like Saudi Arabia, Venezuela, Russia, and China don’t want.  The Progressives talk about our dependency on oil.  But they’re the ones who created it by shutting down our refineries and our nuclear power plants.  They accuse us of being addicted to our cars.  What we’re addicted to is our freedom.

We will never see a solar-powered or electric vehicle capable of carrying us farther than the Progressives want us to go.  They intend to dictate to us what kind of company we’re going to work for, where we’re going to live, what kind of housing we’ll live in, and how we’ll get to that government-dictated job.  The Democrats here in New Jersey didn’t tax the businesses out of state for nothing.  New Jersey is the Smart Growth proving ground.  Communes have been set up in other cities in other states like Berkeley, Calif.  New Jersey will be the first test of an unwilling population.

The first phase is over:  the Democrats have driven all the private sector businesses out of the state with onerous regulations and burdensome taxes.  The residents who are still here are now at the mercy of a bureaucratic government.  Their houses are worthless.  Those who are out of work won’t be able to pay their taxes and their property will be seized.  Those who are employed will see their taxes increased to impossible rates.  Gov. Christie is doing his best, but as he said at the Monmouth County town hall meeting recently, “You need to send me a Republican legislature.”

Those who can be “greened out” of their homes are already besieged.  Lakefront properties are either being taxed excessively or regulated off their property through ridiculous wetlands rules to save the excess tax toad and the garden state turtle.  One of Sustainable Development’s goals is to give wild animals the same legal rights as human beings, with SD lawyers acting as court surrogates on their behalf.

According to Exxon-Mobil, the reality of gas prices is that for every two cents per gallon the company earns, a state, on averages, taxes the gasoline at 48.1 cents per gallon.  In New Jersey, we pay a relatively modest 32.9 cents per gallon in taxes.  In neighboring New York, the tax is 65.6 cents per gallon and in California, which has the highest gasoline taxes, motorists pay 66.6 cents per gallon in taxes.  That’s per gallon.

So we have information from Energy Cal on one hand, and Exxon-Mobil, by no means the world’s largest oil producer, on the other hand, telling us how much the government is robbing us at the gas pump, all the while pointing its oily finger at the Big Oil companies.  That’s not to mention all the taxes companies like Exxon-Mobil must pay the government.

We are on the road to serfdom, as F.A. Hayek predicted, forced just like the serfs of old to go no farther than our workplaces or our commune condos.  It's time to tell our government bureaucrats to take a hike.


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