Canthook

Over the course of a year, the US consumes 140 billion gallons of gasoline. Over the 90 days of summer, we'll consume about 40 billion gallons.

At 18c per gallon, that's $7.2 billion dollars of excise taxes, used to build and maintain bridges and highways.

If we're not to end up with lots of potholes and fallen bridges, we need to replace that tax money somehow. Senator Clinton wants to use a windfall profits tax on oil companies.

So if the oil companies pays $7.2 billion less in taxes on a per-gallon basis, but pay $7.2 billion in taxes on their profits, what's the net difference to the oil companies? Zero.

And how will this affect prices? They won't change.

There actually will be a slight difference to the oil companies. They'll need to a little more manpower to figure out their taxes. That means the price of gasoline might go up a penny.

And there's a cost at the federal government level, too, because they will have to figure out and print a lot of tax forms, and write software to process them. In order to net enough extra money from the excess profits tax to pay for the foregone excise taxes. That could force the price of gasoline up still another penny.

Thanks, Senators McCain and Clinton! Got any more good ideas? Like maybe keeping out troops in Iraq for another century, or expanding the war into Iran?

"Rich people, god bless us. We deserve all the opportunities" - Hillary Clinton.

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18c - gasoline - government - highways - prices - taxes - windfall