There is so much hype out there in the media, and so many people that get their information from just a few sources. I feel compelled to give another side to the debate over the price of gas and how the oil companies are somehow gouging us. This is the teacher in me coming out. Class, you will need to stay for an extra few minutes, there's something important we need to discuss.
First of all, the oil companies' average profit margin is about 9 percent, meaning that 9 cents out of every dollar is clear profit for the oil companies. With gas at $4 per gallon, that translates into about 36 cents per gallon of profit. Think of all of the gas being pumped this instant ... wow! However, that 9 percent is totally in line with most aspects of business. In fact, drug and pharmaceutical companies rake in almost three times that percentage. Even manufacturing, if one takes away the awful automotive industry, compares favorably to that 9 percent.
It isn't the oil companies' fault that they provide one of the world's most demanded commodities.
And secondly, think about what the oil companies do to make those profits. They either buy the crude oil or find it and drill it themselves; then they transport it, refine it, transport it again, market it, research and develop it, and deliver it to the consumer. In other words, they do all of the work. In a capitalist system, when your commodity is highly sought after and you do all of the work in providing that commodity, you are supposed to make a killing. That's what capitalism is all about. That's the incentive. Bill Gates did all of the work and provided a product better than anyone else, and he became the richest man in America. You don't hear anyone complaining about that (unless they bought Vista).
That brings us to gasoline taxes. Here in Illinois, the gas tax is about 58 cents per gallon; which includes state and federal taxes. That puts us about fourth in the country, behind California, Connecticut and New York. So while the oil companies are making 36 cents a gallon, the government is making 58 cents a gallon. And what do they do to earn their share? Nothing. They do nothing!
Who is really doing the gouging here? The oil companies that do all of the work, or the government that does none of the work?
Besides taxing the consumer for the gasoline he or she buys, the government also taxes the crap out of the companies' profits, then taxes the workers and executives for the salaries they make. That's all well and good one might say, but ask yourself what is the government doing with all of that money that they have done nothing to earn? I say again at least the executives are doing something to earn their pay. But we condemn them and look to the government for help. Most often the government's response is, OK, we'll punish them, and tax them some more. I bet you will! Can I get in on that?
The oil companies do all of the things in the capitalist system you are supposed to do; and the government, with our blessing, wants to punish them. Folks, you must see the error and the harm in this.
And I say again, what are we getting for all of this money that we pour into the government coffers? I for one have given up on Washington bureaucrats completely. I guess what really burns my butt is that many people -- the same ones who get their information from limited sources and believe they are being gouged by oil companies -- really believe that if they elect a different Washington bureaucrat that somehow their lives will improve.
All we can truly expect from these bureaucrats is the same and more of the same. It's my firm opinion that no candidate for president has the time or desire to think about me or my family or what will happen to this country down the road if we don't make some huge changes. They are too busy being politicians, in a never-ending search for power. Either way, as long as we put our trust in men and government, we will be sorely disappointed.
No comments:
Post a Comment