oil prices

Anton Sherwood (dasher@netcom.com)
Thu, 11 Dec 1997 18:34:47 -0800 (PST)

Wayne Hayes posted a piece purporting to demonstrate
that Americans pay too little for gasoline:

}First is the $3.3 to $10.9 billion of tax breaks to the oil companies.
}They have convinced Congress to grant them a whole list of tax
}subsidies from the oil depletion allowance to accelerated depreciation
}and a bunch of other breaks given to no other industry.

This is valid. Without those strange tax rules, drilling
practices (and therefore prices) would be different.

}... Taxes that the oil companies don't pay means that other
}taxpayers---or our grandchildren in the form of debt---do pay.

Ha. How often has the government ever lowered a tax rate
because it took in too much?

On the other hand, the extra money collected if they oil companies
were "fully" taxed would probably be used by regulators to make us

}It's not just federal taxes that are being tapped to meet our
}petroleum addiction, but also local property taxes. ISLR estimated
}that if the transportation taxes paid it's full freight in
}Minneapolis, rather than some of the burden being paid by property
}taxes, gasoline would cost another 18 cents/gallon.

For what, upkeep of Minneapolis streets? I benefit from good streets
if I walk or ride a bicycle. Merchants benefit, through customer
access, even if they never buy a gallon of gasoline. Why put the
entire load on gasoline?

}Second, taxpayers spend $26.6 to $70.7 billion to pay for military
}protection in the Middle East and elsewhere. ...

This is partly valid. Libertarians would say, let the oil companies
do their own fighting. On another hand, the Gulf War was hardly needed
to keep the oil flowing; what was Saddam going to do with the oil he
grabbed, eat it?

}Third, and the hardest to quantify precisely-but likely the most
}expensive of all-is the estimated $25.5 to $267 billion annual costs
}in the form of environmental and health costs associated with

Putting those costs in gasoline tax would externalize any benefit
from designing a cleaner engine. Technology exists to identify
the gross polluters on the road; find them and tax *them*.

Anton Sherwood *\\* +1 415 267 0685 *\\* DASher@netcom.com