Wednesday, May 03, 2006

I shred an Ann Coulter argument

In her latest column, Ann Coulter writes the following:

"The Democrats' only objection to current gas prices is that the federal government's cut is a mere 18.4 cents a gallon. States like New York get another 44 cents per gallon in taxes. The Democratic brain processes the fact that "big oil companies" get nearly 9 cents a gallon and thinks: WE SHOULD HAVE ALL THAT MONEY!"

Her point is that this current situation is unjust: oil companies get only 9 cents on every dollar of gas that's sold, while the federal government gets 18.4 cents.

This is total BS.

First, that 9 cents is the oil companies' PROFIT per dollar. I don't know what amount they "get" (we call this revenue), which then goes back for R&D, salaries, paying for equipment, etc. Ann Coulter doesn't know either. It's a complicated equation. Second, everybody acts these days like tax money just evaporates. This is not the case. I will be the first to admit that the tax system today is ridiculously complicated and unjust, but this doesn't mean that tax money just goes away. As I've argued before, how much your taxes benefit you is nearly 100% determined by WHAT YOU DO and not HOW MUCH YOU MAKE. Neither I nor Ann Coulter knows how much of that 18.4 cents per gallon goes right back to the oil companies in deferred taxes, subsidies, uncollected royalties, and money in the pocket of consumers who can then buy more gas.

The clear example I gave in the past is as follows: taxes that pay for education benefit software companies greatly, because such taxes give schools and colleges more money to spend on software and computers. Microsoft benefits enormously from property taxes. Other people don't. To figure out exactly who benefits from what tax is time-consuming, difficult, and requires lots of research.

That's why Ann Coulter writes columns like the above.


At 7:08 PM, Anonymous dadman said...

As we used to say back in the day, this is a righteous post.

At 11:25 PM, Blogger Jackscolon said...

So... the government still makes twice as much profit on each gallon of gas as the oil company, since their cost in collecting the tax is basically negligible. Unfair.

So when ExxonMobile makes a record $10 billion dollar profit, the government makes... $20 bil?

But seriously, I don't even really care about how much the government makes- the only thing I find retarded is a proposed tax on oil companies when the stimulus is high prices at the pump. Will taxes make the price of gas less? No, it won't.

If we want to try to screw the oil companies because we're poor and jealous and feel entitled to what they sell, that's fine. But let's call it that. I'm all for screwing people better off than I am, that's what human nature is all about. So later, after we screw the oil company by imposing a tax, we can sit back and watch the price of gas double when they cut production to avoid the tax.

But, yeah, Ann Coulter is an idiot, we all agree there.

At 7:54 AM, Blogger CharlesPeirce said...

jacks, I think you commented before you read my post. The government doesn't "make" $20 billion the same way that Exxon makes $10 billion. The gas tax largely pays for roads and such infrastructure, which (1) uses lots of gas and oil to construct and (2) allows people to drive more. So the gas tax actually facilitates higher profits by the oil companies.

At 10:25 AM, Blogger Jackscolon said...

No, I read it, and I'm fine with your argument. I'm not calling for a reduction of taxes on gas. I'm not saying every single dollar of revenue for the government is (A)wasted and (B) doesn't make its way back into the economy.

I just think that proposing an increased tax on oil companies is counterproductive if the consumer is what we really care about. In this case, either politicians are (1) greedy, in which Ann Coulter's argument has some merit, if not nuance, or (2) idiots, which is unlikely considering most of these people are millionares, Ivy League grads, etc...

At 10:34 AM, Blogger CharlesPeirce said...

You're not calling for a reduction in gas taxes, and I'm not calling for an increase--the current gas and oil situation is not one in need of being poked and prodded by partisan politicians. (+4)

As for your question about politicians, I don't think they're greedy or idiotic. They're largely concerned with reelection. See the post below this one.

At 11:06 AM, Blogger RedHurt said...

I'd like to propose a tax on people with gas.

At 11:06 AM, Blogger RedHurt said...

gonads in the lightning!


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