Many in Washington would like motorists to think the high prices they are paying at the pump these days are flowing directly into the pockets of ExxonMobil and other oil companies. This misperception helps fuel the demonization of “Big Oil” and the misguided notion that energy prices can be solved by raising taxes on the oil industry.
- Through the combination of state and federal taxes, the government collects an average 48 cents on each gallon of gasoline sold in the United States.
- Gasoline taxes are far higher in some states, such as California and New York, where motorists pay about 66 cents. Taxes are even higher on diesel, which fuels commercial transportation.
- By contrast, during the first three months of this year, for every gallon of gasoline and other products ExxonMobil refined and sold in the United States, we earned about 7 cents.
My point here isn’t to criticize gasoline taxes or their purpose. I just think that when it comes to addressing the rising price of commodities, including gasoline, we need to deal with facts. The American public deserves some straight talk from our political leaders if we are going to have a sensible discussion about energy policy in this country.
All the talk in Washington about how we can lower energy prices by raising taxes on the U.S. oil industry is misleading – and, as the Wall Street Journal noted last week, “junk economic theory.”