Recently in Gas Prices Category

So this whole gas tax issue has been popular lately; since John McCain and Hillary Clinton both stated that removing the tax on gasoline and other fuels would be something that they would do, and something that they believe would be good for Americans; while Barack Obama opposed the idea.

I'm not going to argue whether I believe John McCain, Barack Obama, or Hillary Clinton is correct in their stance and their beliefs on the issue. What I am going to address is what exactly all of these tax payer dollars in fuel tax revenue are supposed to be going to:

You may have seen the word hypothecation used in reference to the gas tax; what that means is that the revenues from the motor fuel tax are supposed to go directly towards the infrastructure used by motor vehicles, such as roads, bridges and highways; as well as to help with the infrastructure for the fuels themselves.

Many people's main argument against both John McCain's and Hillary Clinton's idea to relieve the American people of this motor fuel tax for the summer has been that this money is indeed going towards the repair and upkeep of our roads, bridges and highways; and why would we not want better and safer roads, bridges and highways.

Yet just last summer we had two different bridges collapse right here in the United States; including the absolutely devastating Minneapolis I-35W Bridge in Minneapolis, Minnesota; which sadly cost the lives of 13 innocent Americans and hurt at least 60 more. A horrible and unnecessary travesty, that undoubtedly could have and should have been prevented.

Several independent research institutions have also pointed out several other bridges in need of repair; as well as vast stretches of other infrastructure that is in need of upkeep. So where is all of this tax money going if not on this very necessary infrastructure maintenance?

In fiscal year 2005, nearly 36 Billion Dollars in revenue from the Motor Fuel Tax was received by state and local governments across the United States. An additional 18.4 cents per gallon in Federal Tax is also currently charged; which is also the tax that the three Presidential candidates and their supporters are debating over. That is a lot of money that is supposed to be used to keep Americans safe.

The 18.4 cents per gallon Federal tax, if voided for the summer as John McCain and Hillary Clinton wish to do, would "cost" the government 10 Billion dollars. What "cost" actually means in this case is that the American people would be able to keep 10 Billion of their hard earned dollars over the summer, while the government would theoretically have 10 Billion less tax dollars to waste.

The argument of those against the tax holiday is, as I stated above, that this summer tax holiday is going to "cost" the government 10 Billion dollars, which would otherwise be going towards the upkeep of our nation's infrastructure.

Yet from our recent history, as well as simply keeping our eyes open as we drive on, ride on, and walk along our roads, we can see that our infrastructure is in terrible shape. From this we must come to the conclusion that the Billions of dollars in taxes that are supposed to be going towards our nation's infrastructure are actually being wasted. Which is not a surprise; the government wastes the vast majority of our tax dollars.

The other argument against the gas tax holiday is that it is not going to reduce prices at the pump at all. Those greedy oil companies are simply going to add another 18.4 cents per gallon to their bottom and top lines!

That argument is simply ignorance. Why? Because the Motor Fuel Tax is added onto the price of gas set by the oil companies, it has no impact on the price that fuel companies charge for their fuel. It is an added tax of 18.4 cents on every gallon of fuel sold in the United States.

That doesn't mean that the price of your gasoline will not continue to rise over the summer, as it does every summer. That is simply due to the increased demand for the product during the summer months. The tax being there or not being there is not at all relevant.

If the tax was there, then the price for gasoline over the summer would be the oil company's price plus an added 18.4 cents extra in tax. If the tax was not there, then the price of the gasoline would be 18.4 cents cheaper.

Hopefully that clears up the issue for everyone that was confused about it, and for those unsure of whether your candidate's stance is intelligent or not: Simply look at the facts and come to your own conclusion.




Why Oil Prices are So High

 

  1. The first reason that I will mention is that Oil is priced in US Dollars. That's why when you see the value of the dollar fall; you see the price of oil rise. The people that produce the oil are generally getting US dollars in return for their product. As such, when the dollar falls, they are making less money on their product, even if the amount of dollars that they receive for their oil is equal, and so the price goes up. This applies to the people buying and selling the oil beyond the producers as well, who are also simply trying to profit. There are of course several other reasons why oil continues to rise, and why the dollar continues to fall. I was just pointing out why the dollar and oil currently move together.    
  2. The second reason is that many people are and have been investing in Oil as it has had quite a run up as the US Dollar has dropped like a rock. Investors, having a good feeling that the Federal Reserve would continue to cut interest rates, have continually bought into Oil to make some profit off of the amazing bull-run that it has had. 
  3. The third is an ever increasing growth in the demand for Oil. This isn't the 1970's where we can simply stop using as much Oil here in America, and prices will fall in relation to our drop in demand. No, these days the entire world is using more and more Oil. As countries continue to develop and expand into modern times, there is an ever increasing demand for Oil. This is the key reason that Oil will never again be as it once was.

2. 

Those are the three main reasons as I see them. There are of course other factors behind the rising price of Oil, such as turmoil and lack of security in many Oil producing lands, to things such as the weather, which can cause rather large jumps in the price of Oil in its own right. But those three issues that I listed above are the key factors behind the current of Oil; they should be known and understood by everyone.

We all realize that Oil usage is a problem for us here in the US, and that we need to find a viable alternative, regardless of the current price of Oil. The heart of the issue is how we move from our high use of oil, to something better. Clearly the way that the US as a whole operates has to change, the whole car culture that we have built and glamourized to the rest of the world has to change. People need to realize how ridiculous it is in the first place, they have to realize that it is not sustainable in the long term, and that something has to be done about it, and the sooner something is done, the better off all humans will be.

I don't have all of the answers myself. But it is clear to me that more public funds need to go to public transportation, and other, better forms of transportation. A huge amount of money is spent rebuilding roads in the US every year so more and more cars can drive on them. This is an utter waste of public funding and in reality should not be done. That money should be spent towards better forms of transportation for all people, not just those that own cars. Sadly a majority of people want better roads, so they can drive their SUV's and other vehicles down the street.

Driving is a part of our culture and it's what most people want to do, but that in no way makes it right or good for the future progress of our country, or humans as a whole. I realize that driving has given people much more freedom than they previously had, and that is not a bad thing in any way. But it is an undeniable fact that there are and were better options to allow all people the freedom that they want and deserve, that is completely sustainable for a very long length of time. I can't blame past generations for wanting to drive and to exercise their freedom to travel around on their own will, as they didn't have the insight that we do in our current time. But now that we do have such information and understand that driving huge vehicles all over the country on expensive roads is a waste of resources and is not sustainable in the long term, then something must be done about it.

Every day that passes wherein people continue to go with the flow and majority feeling is setting back humanity as a whole. It's setting back our future generations by hurting our stability and our environment. We have to step up as a people and bring it to an end. We have to sit down and put our minds towards progress, rather than selfish deeds, for the good of our country and the world. We have to realize that suburban sprawl is not necessary and has only led to us having to rely more and more on our vehicles to get us away from and back to our homes.

There are better, more modern forms of transportation available to us right now. They are more efficient and are more sustainable in the long term, which will lead to a better life for our future generations. Anything at all will help; simply moving away from overly large vehicles that are completely unnecessary would be a huge improvement. And I do realize that we are beginning to move in the right direction, but there is undoubtedly resistance in many areas that we need to overcome. It has been too long already and it is time to help our fellow citizens along.

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This page is a archive of recent entries in the Gas Prices category.

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