Who is the greater profiteer in regards to oil? Is it the oil companies? The refiner? The gas stations? The government, Federal and State? The answer according to the US Energy Information Administration is…..New York State, followed by the Federal Government. You would not know it if you followed the blather of this Administration and the Democrat Party. Remember their playbook on class warfare depends on misdirection.
Using the New York City average of $4.04 per gallon, here is how it plays out. Lowest on the totem pole is the refiner. After expenses they net 2 cents. The gas station, 3 cents. The oil company, 19 cents. Sitting on top is the Federal Government at 18.4 cents and leading the nation (yes, even more than California) is New York State at 52 cents a gallon. Now you may not think it fair that the oil company makes more than the Federal Government (1 cent), however who is doing all the work and making the necessary investments and taking all the risk?
Remember those tax credits Obama and the Democratic Party wish to demonize are on investment and depreciation. The same as any other business is entitled to. Eliminating them would only increase the take the Federal Government gets without lowering prices to the consumer. It would not produce one extra barrel of oil. More likely than not, it would produce less as the incentive to invest in exploration would be negated. It would probably raise prices as the additional costs would be passed down to the consumer.
Also remember higher prices is the stated goal of this President and his Energy Secretary. Forget their new found positions, they are simply poll driven. It is their actions in tightening access to supplies that reveal the truth. The only growth in production is on private land which they have no control over, such as the lower half of the Keystone XL pipeline and in North Dakota, which they wish to take credit for. That which they control, federal leases are down 19% since 2009.
Out of New York State’s take of 52 cents per gallon, 8 cents goes to the dedicated Highway and Bridge Trust Fund. The truth is that fund is broke as both branches of government in Albany have raided billions from that fund to put in the general fund to make it look like they are balancing the budget.
Regarding the state, city and local sales tax of a combined 24.9 cents, a portion, about 15 cents, goes to the MTA. This alone put the lie to the need of a dedicated separate tax for the MTA. The MTA always had dedicated funds. Not only on gas, but cell phones, land lines and cable bills. The reality is people who do not use mass transit or do not derive any benefit of it have always subsidized it. The actual user only pays 25% towards the cost.
The point of all this is to put the lie to all this class warfare you are hearing this election cycle. Yes, the oil companies reap huge profits as do the commodities investors if they play their cards right. However, they also do all the work and make all the investments and take all the risks. In spite of the rhetoric, profit is not a crime, and who is to say how much is too much? Be careful before you travel down that road. The real profiteers and squanderers of your money is the Federal and New York State governments. The reality is class warfare is a classless act. Do not reward those who play that card with your vote. This is my opinion, you may beg to differ.
Anthony. J. Bazzo
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