The Facts Behind The Gas Tax Holiday

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.

The top three reasons why Oil prices are so high

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.