Who is Profiting?

Many people believe that the oil companies are making huge profits on gasoline but they do not understand that the oil companies only make 8 to 11 cents in profits per gallon of gasoline. They survey, research, drill, transport, refine (24 different blends of gasoline) and transport it to the pump. After all this they only make 8 to 11 cents in profits per gallon. Yet, when we go to the gas station to fill up our vehicles, most of us do not realize that over half of what you pay goes to the government in taxes. The federal government adds an excise tax of 18.3 cents on every gallon of gas. The states then add an additional excise tax that averaging 19.4 cents per gallon. This adds up to a total of 37.7 cents per gallon. Based on recent price data from the Energy Information Administration of the U.S. Department of Energy, these taxes account for about 28 percent of what you pay for a gallon of gas. The Tax Foundation estimates that the average American household will spend over $400 this year on these taxes alone. But that is not all. The government imposes 43 different direct and indirect taxes on the production and distribution of gas. The total tax burden amounts to 54 percent of the price of a gallon of gas; that means if you pay $3.80 per gallon, the government collects $2.05. The government does nothing to produce gasoline; yet, they make a 54 percent profit on each gallon of gasoline. So why are there politicians who want to have a windfall profit tax on the oil companies? How about we cut the amount of money the government steals from us? These politicians think that by stealing profits from the oil companies it will lower the price of gasoline, this is idiotic. If they attack the profits of the oil companies it will cause these companies to reduce production which will in­crease gasoline prices; further, it will effect the retirement and mutual funds that have stocks in these oil companies. These retirement funds hold approximately 30 percent of the oil companies' shares and mutual funds hold approximately 40 percent of the shares. So, if the government steals these profits from the oil companies it will affect millions

of people's retirement and mutual funds. How will this help the American people? The government is the real thief in the oil business, not the oil companies. The government produces no energy; yet, they profit the most by taxing oil companies and the American people.

If the government really wanted to help the American people they would stop crippling the oil companies with their destructive energy restrictions and policies. Restrictions like not allowing the oil companies to drill within 250 miles of the coast of Florida. Meanwhile, the Chinese and Cubans are drilling just 50 miles from the coast of Florida. Con­gress also gave ethanol subsidies to farmers to grow corn for ethanol and in turn they cut corn production for food. This greatly increased the price for corn feed and cut production of wheat, rice and other grains; which along rising fuel costs has caused food prices to skyrocket. The government's energy policies have failed and we are paying for their failures.

Ssg. Wynn S. Allen, USA (Ret.), Westport

Editor's Note: The above letter writer should not be confused with Winston (Win) E. Allen of Burritts Landing.