On today's Hannity radio show, he made the statement that states make $0.50 per gallon of gasoline, in the form of taxes, whereas the big oil companies make a mere $0.08. The implication being that the high price of gas is due much more to the liberal tax/spend policies rather than any so-called price gouging by big oil.
Yikes! Is this guy in bed with big oil or what???
Anyway, I haven't sorted out all the facts, but here's what I've been able to figure out so far:
1. $0.50/gal in taxes. This is an exaggeration of about 15%. The true tax burden per gallon in the US is an average of $0.434/gal. Source:
http://www.api.org/aboutoilgas/gasoline/upload/State-Motor-Fuel-Tax-Rates.pdf
2. How can we compare tax revenue to corporate profit? That is an apples-to-oranges comparison.
Gas taxes go to build new roads and maintain old ones. In some states I'm sure gasoline taxes are siphoned off to other, non-transportation related funds. But even in those cases, the money is
spent - ie, it is not kicked back to any shareholders, it is reinvested. Hence, tax revenue should never be considered profit, since 100% of it is reinvested in government programs (eg, building/maintaining roads) and is not distributed to shareholders.
But those meager $0.08/gal earned by the big oil? That, I'm assuming, is profit. This isn't a fair comparison to taxes. The former is the profit, ie, revenue after expenses and reinvestments are subtracted. The later is simply revenue without any subtractions at all.
3. That figure of $0.08/gal that was quoted on the show??? WRONG. It is more like $0.095/dollar (ie, not per gal). Hence, for a $3.26/gal cost of gas, big oil is pulling in 3.26*9.5 = $0.32/gal. This is a factor of FOUR greater than what Hannity stated on the show.
SUMMARY:
1. over-exaggerated taxes per gallon by 15%
2. under-reported big oil profit per gallon by 400%
3. not valid to compare tax revenue to profit. Should compare tax revenue to corporate revenue.
