Gasoline

“Our Dependence”
James L Bradley
April 27th, 2008

I’m not aware of what you have been paying at the square metal box sitting under a metal
awning near your home, only being assured that you know it is a bit much, and is taking a lot of
your disposable income – far too much? That last little blurb I send out dealt with some
comparisons across the globe, this one. Our usage and some tax rates.
The latest available figures say that the consumption of gasoline per day in the USA is
running around 129.99 million gallons per day (less than half-gallon for every registered citizen,
a little less if you count the illegal immigrants).
Concentrating just on the Western USA, California is leading the usage by around 15.9 mil
gals per day, which in the way of Fed and State tax the driver is paying approximately $5.8 mil
per day in taxes, accumulating to approximately $2.1 billion per year.
In Washington, where the State Fuel tax is the highest in the nation at $0.36 per gal, (diesel
tax is the same / $0.36), the consumption of gasoline is about 2.8 mil gals per day and the drivers
are paying an average of $1.5 mil per day in Fed and State tax, and around $552 million per year
in combined taxes with the State slipping into their pocket around $366 mil per year.
Oregon consumes around 1.6 mil gal per day with their drivers shelling out $683,435 per day
to the State and Fed tax man, with each year the State of Oregon collecting around $249 million
in combined taxes.

Between the three states the collected combined taxes equals $2.9 billion with California
receiving the bulk at 72%.
In Washington, the price of a gallon is bouncing around $3.70 for the cheap stuff, unless you
making above $200K per year I imagine you are buying the low-octane stuff and paying about
14.6% of a gallons cost towards the State coffers. And overall some are dipping into their wallets
and paying about $10.29 million per day for gasoline. The medium income (averaged) in the
State of Washington is around $63,705 and if a typical family drives at least 12 miles per day

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back and forth to work, another 5 per day to the store and visit grandma’s during the weekend
driving another 17 miles and the gas mileage averages around 19.5 MPG they will spend $33 per
week for petrol which will average out at $1,700 per year about 3% of their income (@$63K).
By the way the one state that pays the lowest in gas tax is Alaska at $0.08 per gallon; see the
state gas tax per state at this URL: http://www.taxadmin.org/fta/rate/motor_fl.html
If its any solace for you, the consumer isn’t the only part of the chain that is suffering with
the high cost of a barrel of oil, where on Friday it closed at $118.53 per barrel, the refineries have
watched their refining margin shrink to 8.8% from 10.4% at the beginning of the year, albeit I
don’t feel to sorry for them realizing that most other corporations that are maintaining a margin
close to 5% think themselves in pig heaven [except banks]. Well maybe not that low, but pretty
close, I read where Mazda (affiliate of Ford) is expecting a profit of around $670.6 million based
on a sales volume of $28.74 billion which hangs in there around with a 2.33% margin and they’re
happy as two leprechauns dancing around on a pot of gold!
The question becomes when does or will the American consumer bellow out that “enough is
enough!” We’re not even close to the people that live and work in Argentina, especially the
farmers who are now protesting the high export taxes in their country and have set up web sites,
cellphone organizations, satellite unions forming a communications network linking farms in
their all out push to remove the unfair taxes, which albeit this seems distant to our lifestyle we are
no longer getting beef from them, soy-beans, corn and wheat, and it is not effecting us? In the
USA some independent truckers stopped for one-day (small % of them) and we all cheered them
on while most gassed up their SUV’s and read or watched the local headlines that “BlackBerry’s
Quest was to fend off the iPhone” – yup, we’re into it!
I seemed to have drifted away from gasoline and taxes, but as long as I’m here let me touch
base on something you probably don’t know (or care to know). Bringing up the mess that the
investment bankers on Wall Street have created, did you know that the fella’s that run these
investment banks (according to David Einhorn) had a strong incentive to maximize their assets
and leverage themselves into deep trouble because their pay is a “function” of how much debt
they can pile on – in other words, if they use low-interest debt to generate “slightly” higher-
returns, the firms earn a few pennies more as do the leaders. If you give a hoot’n holla take a
look at this address: http://www.nytimes.com/2008/04/27/business/27every.html?
_r=1&ref=business&oref=slogin

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