Taxes Make Gas Expensive
Hold on to your wallets -- the Senate is in session. Senators Grassley and Baucus plan to make your gasoline even more expensive.
A proposal to hit oil companies with $29 billion in new taxes advanced in the Senate on Tuesday, targeting the money to energy conservation, wind turbines, electric hybrid cars and clean coal technology.
The massive tax package, double what Democrats had discussed as recently as last week, is "designed to promote clean and sustainable energy," said Sen. Max Baucus, D-Mont., chairman of the Finance Committee that approved the measure by a 15-5 vote.
It is expected later this week to be added to energy legislation being considered by the full Senate.
It gets worse.
The American Petroleum Institute, the oil company trade group, said in a statement that the taxes "will discourage new domestic production, discourage new investments in refinery capacity and would lead to the loss of good-paying U.S. jobs."
As I wrote previously, Congress has been discouraging investments in refinery capacity for decades. Our already limited refinery capacity is largely responsible for the current high price of gasoline. We should be doing everything in our power to increase refinery capacity -- not decrease it more.
Baucus said he expects the oil companies to complain, but he doesn't believe the taxes "will substantially change these companies' incentives to produce energy."
Maybe not. But it will substantially change the price that these companies charge to consumers. Senator Grassley doesn't realize that -- maybe he's been smoking something green?
Grassley said the "narrow change" in tax policy "seems likely to have little if any effect on domestic production" or the price of gasoline at the pump.
Uh-huh. Raising taxes by $29 billion will have "little if any effect" on prices. How long has he been out of touch with reality? Also, does he have any plans to return to reality?
How expensive could this all get? The Heritage Foundation did some quick research and put together a state by state analysis for you. Living in Wisconsin, I could see prices rise from $3.29 a gallon (May price) to $3.60 a gallon next summer. By 2016, gasoline could rise as high as $6.62 a gallon. To Senators Grassley and Baucus: "Thanks a lot. I didn't really need that extra $113 in my monthly budget anyway."
As if this wasn't bad enough, Congress would like to make your car more dangerous.
Despite Congress' repeated efforts to repeal the laws of physics in favor of something more politically correct, the fact remains that bigger is safer when it comes to vehicle size. Supporters of increasing Corporate Average Fuel Economy (CAFE) standards ignore what millions of minivan and SUV drivers already know: They stand a much better chance of surviving an accident than drivers of lighter, more fuel-efficient subcompacts. The problem is that significantly improving fuel economy means cutting average vehicle weight. The curb weight of a typical family sedan can be reduced from the present 3,200 pounds to, say, 2,800 pounds. But maintaining the same level of safety with advanced air bags, refined crush zones and other technological fixes could make the lighter family sedan unaffordable for middle-class buyers.
Advocates of higher CAFE standards claim that the smaller vehicles will pollute the air less and consume fewer natural resources. As a result, from a global perspective, such vehicles will do less damage to the environment and fewer people will die or get sick as a result of emissions-related causes. But most Americans with families to transport and businesses to move see a much more immediate and concrete health and safety benefit in driving vehicles that serve their purposes without putting at risk their lives and those of their loved ones. Only through force and coercion will they trade their practical vehicles for the smaller, less useful and often more expensive "green" vehicles favored by higher CAFE advocates.
The land of the free -- she ain't quite what she used to be.