Gouging Us with Shifty Eyes…

by Ryan on April 28, 2006

in Politics


Rush brings up a funny point about this idea of the oil companies “gouging” the consumers because of the record numerical profits Exxon-Mobil and other companies have seen in the first quarter this year. Rush’s point is:

  • The oil companies get 9 cents per gallon of gas in profit at the pump.
  • The Federal tax on gas is 18 cents per gallon.
  • If Exxon-Mobil made $8.4 billion in the first quarter, then the Feds must have made just under $17 billion in that same time period, while also taxing the profits Exxon-Mobil made after that.

Rush coyly asks if the Federal government isn’t, perhaps, gouging us at least a little bit. Can’t they lower the tax on gasoline? Should we have an investigation into the Federal government gouging the consumers? Microsoft’s profits are up 38% this year. Does our economy really need newer, faster computer operating systems? Shouldn’t they pay, too?

I know the Feds provide us with some important stuff (military, infrastructure, etc.), and there’s good to come out of investigating individual gas stations that may gouge, but the oil companies themselves have been watched so often for so long under such scrutiny, that the talk of investigating price gouging at the corporate level seems like simple, short-sighted political pandering.

Lower the federal gas tax and nab the creeps who gouge us locally.

Thank Oldgas.com for the pict.

{ 1 comment… read it below or add one }

Matt April 29, 2006 at 7:48 am

Here’s what I don’t understand… Why is so called “price gauging” a crime? If I’m selling a product, I should have every right to charge whatever I want for it. The price that I set will determine how many people are interested in buying my product. If I put my house on the market for $1 million, I don’t think I would get much interest… but if I put it on the market for $100,000, I would have people knocking down my door trying to buy it.

Even if all the big oil companies get together and agree to raise their prices, why is that a crime? More people will start car-pooling, or taking the train or bus to work, and sales will go down. Most of all, as Rush said on Thursday, prohibitivly high prices will spur innovation. If oil costs too much, then someone will find an alternative that will cost less. It’s simple economics.

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