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Platapus · 05-04-08, 05:14 PM

Just removing the $0.18 federal taxes on gasoline won't automatically lower the cost of Gas.

Where it is mandated that if the federal tax on gas is removed that this will result in the cost of a gallon of gas to be lowered by $0.18? This is an assumption and not a logical one at that.

The oil companies could just immediately raise their selling price by $0.18 as it is their product and they can sell it at what ever price the market will bear. They probably won't raise it the full $0.18 but increase it a dime? Why not? Then when the federal tax holiday of over our gas prices will go up again. This time it will be on top of the additional $0.10 profit (or what ever the oil companies think they can get away with).

Or

The oil companies will keep their prices the same but the distribution station owners will raise their prices (after all, they can sell the gas at what ever price they wish). If all the distributors agree amongst themselves to help themselves to the "extra" profit, what can we do about it?

This is the flaw with such political ideas. If the federal government lowers taxes why would this automatically mean that companies will not raise their price? Because they are nice people? They are not. Oil companies are in business for business. profit is profit and more profit is what is desired.

If my customer is used to paying $3.30 per gallon + $0.18 tax and the $0.18 tax is eliminated, why would I keep my product at $3.30. Clearly there was a market for $3.48 right? If the government is nice enough not to take more of my customer's money, why would I not step in and take it for them? Profit is profit. It is not like people won't buy my gas at $3.49 as they already are! If the government does not want the usual $0.18 why wouldn't I take it?

If you were an oil company, would you pass up on an extra profit on your product?

It would be great if the oil companies were nice guys interested in the best for society. But they aint. They are in business to make a profit. Normal economic customs call for earning the most profit the market can bear.

Unless there is some way to mandate that the oil companies will indeed keep their prices the same, these political solutions may not have the results they intended (other than convince gullible people to vote for them)

05-04-08, 05:14 PM	#10
Platapus Fleet Admiral Join Date: Oct 2006 Posts: 19,401 Downloads: 63 Uploads: 0	Just removing the $0.18 federal taxes on gasoline won't automatically lower the cost of Gas. Where it is mandated that if the federal tax on gas is removed that this will result in the cost of a gallon of gas to be lowered by $0.18? This is an assumption and not a logical one at that. The oil companies could just immediately raise their selling price by $0.18 as it is their product and they can sell it at what ever price the market will bear. They probably won't raise it the full $0.18 but increase it a dime? Why not? Then when the federal tax holiday of over our gas prices will go up again. This time it will be on top of the additional $0.10 profit (or what ever the oil companies think they can get away with). Or The oil companies will keep their prices the same but the distribution station owners will raise their prices (after all, they can sell the gas at what ever price they wish). If all the distributors agree amongst themselves to help themselves to the "extra" profit, what can we do about it? This is the flaw with such political ideas. If the federal government lowers taxes why would this automatically mean that companies will not raise their price? Because they are nice people? They are not. Oil companies are in business for business. profit is profit and more profit is what is desired. If my customer is used to paying $3.30 per gallon + $0.18 tax and the $0.18 tax is eliminated, why would I keep my product at $3.30. Clearly there was a market for $3.48 right? If the government is nice enough not to take more of my customer's money, why would I not step in and take it for them? Profit is profit. It is not like people won't buy my gas at $3.49 as they already are! If the government does not want the usual $0.18 why wouldn't I take it? If you were an oil company, would you pass up on an extra profit on your product? It would be great if the oil companies were nice guys interested in the best for society. But they aint. They are in business to make a profit. Normal economic customs call for earning the most profit the market can bear. Unless there is some way to mandate that the oil companies will indeed keep their prices the same, these political solutions may not have the results they intended (other than convince gullible people to vote for them) __________________ abusus non tollit usum - A right should NOT be withheld from people on the basis that some tend to abuse that right.