So, Exxon Mobil broke corporate records last week, posting a $9 billion profit on $100 billion in revenue in the third quarter. Right on cue, Democrats demanded that Washington confiscate some of those profits. Are they predictable or what?
Want to know who is making a bigger windfall than oil companies are making from the prices paid by the poor gasoline consumer? It’s good old Uncle Sam and his 51 little brothers.
Refining costs and profits combined make up about 15 percent of the cost of a gallon of gasoline, according to the U.S. Energy Department. State and local taxes make up almost double that, about 27 percent. (New Hampshire’s 18 cents per gallon fuel tax accounted for 7.2 percent of last week’s average gas price of $2.49 a gallon.)
State and local gas tax collections exceed oil industry profits by a large margin, according to a Tax Foundation study released last week. Since 1977, consumers have paid $1.34 trillion in gas taxes — more than twice the profits of all major U.S. oil companies combined during that same period. Last year, state and federal gas taxes took in $58.4 billion. Major U.S. oil company profits last year totaled $42.6 billion.
Want to make an immediate dent in gas prices? Cut gas taxes.
But of course cutting the fat from local, state, and federal bureaucracies isn’t the answer. It’s confiscation of private industry profits!
[Emphasis added. –R]