Day by Day

Thursday, May 22, 2008

Posted as commentary

To Steve B.'s post below:

That's right folks, the oil companies make an average of 8% profit from a gallon of gas. The government, on the other hand, makes anywhere from 35-45% profit.

They do not search for the oil.
They do not drill for the oil.
They do not pump the oil.
They do not refine the oil.
They do not transport the oil.
They do not sell the oil.

Yet they make 35-45 cents of every dollar of gasoline sold on the market. So you tell me: Who benefits more from the high cost of gas?

Graphic found at Michelle Malkin.

UPDATE AND CORRECTION: From mailgeek in the comments:

While the government does make more per gallon than the oil companies I must correct your facts. The government makes 35+ cents per gallon, not per dollar as our gas taxes are taxes/gallon. That said 9x4 = 36 so even with the current high prices the state and federal governments are making more than the BIG BAD EVIL oil corporations who search, drill, pump, refine, etc. They also employ a lot of people while doing so who also pay taxes on their incomes.

Consider that on top of the direct taxes on our gasoline (that per gallon tax at the pump) there are "hidden" taxes. The oil companies are paying 25% corporate taxes on their pre-tax profit (so without those taxes the companies are "making" 11-12% so those taxes are another 3 or so percent of the total cost. Then consider that some of the pretax profit is paying employees who pay SS and income taxes. Then consider that part of the POST-tax dollars are paid to shareholders (that would be a majority of Americans in one way or another) in dividends which are taxed again. Then consider that when you sell oil company stocks the increase in price is taxed.

All of this leads to the conclusion that the government will still be making more per gallon of gas purchased than the BIG BAD EVIL companies that allow us to get to work with gas prices north of $8/gallon.

You know what? That's even worse.

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