June 21, 2007
Weak-kneed Republican senators have joined Democrats to impose $29 billion in new taxes on oil companies because prices at the pump are so high. Unfortunately, these new taxes will only make them higher, says Investor's Business Daily (IBD).
According to a Heritage Foundation analysis, the resulting price increases will be substantial:
- Gas consumers can expect to pay between $3.16 and $3.79 a gallon for gas in 2008 due to the Senate energy bill.
- By 2016, all states can expect gas prices in excess of $6; consumers would spend an average of $1,445 more per year on gasoline in 2016 than in 2008.
The idea is for Big Oil to foot the bill for huge tax credits and incentives for wind and solar power, hybrid vehicles and biofuel. But while alternatives to fossil fuels are worth developing for the long term, says IBD, it is childish on the part of Senators to believe fuels like ethanol will help in any meaningful way. Consider:
- It takes more energy to make ethanol than it provides as fuel, and ethanol's CO2 output is similar to gasoline's -- yet Washington subsidizes domestic ethanol with a 51-cents-a-gallon tax credit.
- That tariff actually contributes to high gas prices and to our energy dependence on the oil of foreign enemies in the Middle East and Venezuela's Hugo Chavez.
As British Petroleum Chief Executive Tony Hayward recently told the Houston Chronicle, "What the world needs is a plant that grows fast, doesn't need water" and contains "lots of sugar." Ethanol from corn is not it, and scientists as of yet haven't created one.
Source: Editorial, "Taxmen Gougeth," Investor's Business Daily, June 21, 2007.
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