- Democrats want to tax oil companies and give tax breaks on gas to working families.
- Republicans want to tap ANWR and other currently off-limits domestic sources of oil to increase supply.
The Democrats want to tax oil companies (or reduce their tax breaks). NPR said that the petroleum industry receives $17B in tax breaks, but they didn't specify over what time period that was. Let's assume the best-case scenario (for consumers):
- The $17B/year would be distributed back to taxpayers directly.
- The profits of the three largest oil industry profits ($71B/year in 2007) would be returned to taxpayers.
U.S. Oil Reserves
I don't need to construct a long argument for this one: currently available U.S. oil reserves would last about three years at current rates of consumption. Tapping currently off-limits areas would approximately double that. Band-Aid? You bet.
Let me suggest a third option to add to the two lousy choices reported on NPR:
- Reduce demand for petroleum, or face up to the high (and rising) prices.
Of course, politicians know that telling people the truth about economics doesn't get you elected—most of them, anyway. I've been very impressed with Barack Obama's position that we should not lower the gas tax. He argues that it doesn't make sense, and he's right. He's a politician who's arguing for what's right and reasonable instead of what's popular right now. That's impressive.
(As a side note, I took this post's photo in August 2006 and labeled it "Crazy gas prices in St. Mary, Montana" because the price was the highest I had seen in my life. These days, that price is "crazy" again, but because it's crazy cheap, not crazy expensive!)