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A Gasoline Tax We Shouldn't Pay

By January 13, 2009
James Poch

Annually, the United States pays between $86 to $95 billion to secure the passage of oil through six "choke-points".

When we drive our vehicles, an accepted cost is the taxation needed to build the roads and bridges that we utilize.  Every time South Carolinians pump gas, the state collects 16.8 cents per gallon while the federal government collects 18.4 cents.

Another tax we often forget is the money spent to secure the safe passage of foreign oil to our country.  We now have a reliable estimate of this amount from the Rand Corporation.  They published a study, which calculates the costs of securing the world's six, oil "choke-points".  It does not include the cost of warfare.

According to this study, each day, 50% of the world's oil is transported through these six, narrow, shipping channels in unstable regions in the world.  For example, the Strait of Hormuz, on the Iranian coast, is only 29 miles wide and is responsible for the transport of 20% of the world's oil.  Even an attempt to close this passage could cause the cost of gas to skyrocket and drag our economy to a halt. 

To reduce this risk, our military patrols these vulnerable passages, year after year, decade after decade, to ensure oil's safe passage.  Though this benefits the world, the United States taxpayer is the primary supporter.  The RAND Corporation estimates the U.S. contribution to secure these choke points to be between $67.5 billion and $83 billion annually.

So does our gas really cost $2.69 per gallon?  Or our oil $73 a barrel?  Hardly.  Even setting aside the environmental and economic costs of relying on foreign oil, it would be accurate to say the price of a barrel of oil costs at least $90 when the world price is listed at $73.  Other taxation more difficult to calculate includes the consequences of financially supporting countries like Nigeria, Russia, Venezuela, and those in the Middle East.  

At the end of this year, we'll begin to have a choice in choosing electric and partially electric vehicles (see a list of vehicles at http://www.pluginamerica.org/vehicles/ ).  Our nation has enough off-peak electric capacity to power 73 percent of our passenger and light-duty truck fleet today.  This capacity can utilize a diverse portfolio of generation powered by wind, solar, natural gas, nuclear, and domestic coal.    Fair questions will arise over subsidies and costs of electric vehicles.  Please keep in mind and spread the word that we have been subsidizing oil and our enemies for decades.  What will your role be in changing this?  Consider a vehicle that accelerates more quickly, drives more quietly, handles more smoothly, and makes our way of life much more secure.

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Post Date:
January 13, 2009
Posted By:
James Poch

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