Published: May 18, 2008 08:51 pm            

READER LETTER: Fuel and taxes

Currently, the federal, state and local governments are floating the idea of eliminating tax on gas for the summer months. We don’t need a temporary band-aid to fix the price of fuel, we need a long-term solution. Of course the real long-term solution is to drill in the eastern Gulf of Mexico and build more refineries, but I will stick to the tax issue. The government makes almost 70 cents profit on a gallon of gasoline, even though it contributes nothing to the process of making the gasoline, while the evil oil companies make roughly eight cents profit on the same gallon. The trouble with this band-aid proposal is that people will adjust to the tax-free gas price and then in September, cold hard reality will hit when gas prices jump 80 cents overnight. This kind of drastic price change will be a hard adjustment.

What the government needs to do is to place tax on a per gallon basis instead of a per dollar basis. Let’s take our county, which is currently making 15 cents per gallon in sales tax. This revenue is needed by the county to operate and, like us, they should not be expected to deal with drastic changes in income. We need an incremental solution to the problem. The county should put a straight tax of eight to 10 cents on a gallon of gasoline, diesel fuel, propane, natural gas and fuel oil, allowing them to adjust to the revenues. Then, over the next few years, take one to two cents off this tax until they finally reach a tax of four cents per gallon. By incrementally doing this, the county budgets could adapt to the change and we get a long-term solution to the outrageous taxes on fuel.

If the federal and state governments did this too, we would get long-term lower prices, a capitalistic solution with government not making more of a profit on a commodity than the companies producing the products and we would get instant long-term tax stimulus package. Watch the pennies and the dollars take care of themselves.

Donald Allport

Gaines

        

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