WEBCommentary Guest

Author: Bruce Walker
Date:  April 26, 2006

Topic category:  Other/General

Instant Solution to High Gas Prices


If oil prices at the gas pump are the big burden for consumers in an otherwise booming economy, and if all political leaders what to do what they can to end this burden, which falls disproportionately on the poor and middle class, then I have a proposal.

If oil prices at the gas pump are the big burden for consumers in an otherwise booming economy, and if all political leaders what to do what they can to end this burden, which falls disproportionately on the poor and middle class, then I have a proposal.

Sean Hannity and others, in fairness, have made similar proposals recently, but my proposal has a couple of twists to it.  A substantial part of the price of gasoline at the pump is the federal excise tax on gasoline.  Repealing the federal excise tax would immediately reduce the price of gasoline at the pump for consumers by twenty cents a gallon, and that should be mandated for all retailers after a thirty day period.

But that is only part of the picture.  State and local taxes also have very high taxes on gasoline, averaging twenty-two cents a gallon and also a percentage tax of as high as six percent (which would be another eighteen cents per gallon on every gallon of gas paid for by a consumer at the pump.)

What could the federal government do about state and local taxes?  Pre-empt them, of course!  One of the very few areas in which Congress has explicit and delegated powers in Article I of the Constitution is to regulate interstate commerce.  It is hard to imagine an area of national policy today which more profoundly affects interstate commerce that state and local taxes on gasoline.

Simply mandating a repeal of those prices would almost instantly reduce the price of gasoline at the pump to consumers by about eighty cents, enough to make a real different in the lives of the poor and middle class.  But the tax cuts should do more.  These tax cuts should be available only to those retailers of gasoline who limit their profit on the sale of gasoline to three percent. 

Given Leftist rhetoric about the oil companies gouging consumers by twenty-five percent windfall profits, gasoline sold at the pump with these repealed taxes and self-imposed (if they wanted to sell without the state and federal taxes), then the price of gasoline at the pump should drop by about forty to fifty percent.   

Would every oil company accept this restriction?  No, only every oil company that wanted to sell gasoline to any consumers (which is to say:  yes, every oil company would voluntarily limit their profit margin dramatically.)   That provision takes the bogeyman of big oil out of the picture.

Would this lead to more consumption of gasoline?  Some, but probably not much.  Gasoline, like food and medicine, is something that everyone buys and the problem of demand right now is not a lot of joy riding middle class Americans.  To the extent that people did drive more, it would help many other areas of the national economy, more than offsetting the loss of tax revenue to federal, state and local governments.

This federal law should have a sunset provision of two years, so that it gives our nation time to deal without economic intimidation from Iran and other nations, which would in turn free our hand to solve their international problems without worrying about what the voters back home thought and how the price of oil might spike or not.

A sunset provision of two years would also place it nicely in front of the 2008 presidential race, with one candidate supporting making this tax cut permanent and one candidate whining about alternative sources of energy – which candidate do you think will have greater appeal with the American people?

At the same time, America should pursue nuclear power, pursue drilling for oil everywhere it can be found (perhaps if President Bush issued an executive order that in time of war oil must be drilled for whether it can be found, that would be supported by the Supreme Court), and tinker with all the innovations that Americans have always loved, like wind power.

Meanwhile this summer, Republicans would have solved one of the two major concerns of the American people before the November elections or, if the problem was not solved, placed forth a very simple and easy to understand plan ready to go into effect immediately to dramatically reduce the price of gasoline at the pump, and left Democrats to explain why they wish the poor and middle class to pay four dollars a gallon for gasoline.

Bruce Walker


Biography - Bruce Walker

Bruce Walker has been a published author in print and in electronic media since 1990. He is a regular contributor to WebCommentary, Conservative Truth, American Daily, Enter Stage Right, Intellectual Conservative, NewsByUs and MenŐs News Daily. His first book, Sinisterism: Secular Religion of the Lie by Outskirts Press was published in January 2006.


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