THE EXCISE TAX ON GAS AND DIESEL—A VERY REGRESSIVE TAX
The first federal excise tax on gasoline was one cent when it was first instituted in 1932. Since 1993, it has been 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel fuel. It has not been adjusted for the approximately 73% of inflation. This means that it takes $1.73 in today’s dollars to purchase $1.00 of goods in 1993.
Of course, the states have seen the excise taxes on gasoline and diesel to be very lucrative sources of revenue. According to the American Petroleum Institute the following are some of the low and high state excise taxes on gasoline and the excise taxes on diesel and the total tax:
| STATE | STATE GAS TAX | FEDERAL GAS TAX | TOTAL | STATE DIESEL TAX |
FEDERAL DIESEL TAX |
TOTAL |
| California | $.5518 | $.184 | $.7358 | $.8583 | $.244 | $1.1023 |
New York |
$.4535 |
$.184 |
$.6375 |
$.4532 |
$.244 |
$.6972 |
| New Jersey | $.414 | $.184 | $.598 | $.485 | $.244 | $.729 |
| Connecticut | $.3685 | $.184 | $.5525 | $.439 | $.244 | $.683 |
| Illinois | $.3687 | $.184 | $.5527 | $.3902 | $.244 | $.6342 |
| Florida | $.4199 | $.184 | $.603 | $.3497 | $.244 | $.5937 |
| Texas | $.20 | $.184 | $.384 | $.20 | $.244 | $.444 |
| Arkansas | $.218 | $.184 | $.412 | $.2218 | $.244 | $.4622 |
| South Carolina | $.2075 | $.184 | $.3879 | $.2075 | $.244 | $.4515 |
The next time you wonder about the price of gas or diesel, look at the pump and see how much your state is adding to the price. It is easy to do the math and see what would be saved if you just paid for the fuel with no taxes.
What are the reasons state and federal politicians like the fuel tax? Here are some:
- Almost 60% of the value of all goods transported in the U.S. is carried by 18 wheel trucks;
- These 18 wheelers average between 4.5 to 6.53 miles per gallon and purchase a lot of fuel.
- The taxes paid by the 18 wheelers are passed along to the purchasers of the goods being transported and are hidden from consumers—a thing that politicians love.
- Politicians can blame the oil companies for the high price of fuel, knowing that almost no consumer will look at the amount of taxes listed on the fuel tank.
- Sometimes for work and sometimes for pleasure, almost every one of us purchases fuel and pays the tax.
- Politicians can chide anyone that protests about fuel taxes by explaining that it is a charge paid by people who use the roads, and if you don’t use the roads you don’t have to pay the tax.
- A fuel tax is difficult to evade because it is collected by the oil companies in the price of the fuel that we pay and is then forwarded to the appropriate government authority and is almost impossible to evade.
Why is the Fuel Tax Regressive?
Investopedia defines a regressive tax as …a tax applied uniformly, taking a larger percentage of income from low-income earners than from high-income earners.
Here are some reasons that the state and federal fuel taxes are regressive and punish lower income Americans:
- Lower income people almost always drive older cars which get less miles per gallon than newer cars, meaning that these drivers pay more fuel taxes than people getting more miles per gallon but driving the same number of miles.
- Lower income people spend a greater percentage of their income on fuel taxes than a higher income person who drives the same number of miles.
- Like the equally regressive payroll tax, it does not matter if the person purchasing fuel and paying the fuel taxes has one child or ten children.
TALKING OUT OF BOTH SIDES OF THEIR MOUTH AND HOPING NO ONE FIGURES IT OUT
Many politicians believe that if they say the right things it is not necessary to do the right things.
For example, it seems to be a requirement of politicians to say that they are concerned about increasing the budget deficit and why it is important that all of the new expenses be paid fromnew or existing revenues.
Of course, all of us understand that the most important thing to the politicians and the Swamp is for us to think that our representatives have provided “benefits” to the rest of us, This is not new. Politicians in Rome were staging gladiator fights and providing bread to placate the citizens up until the time that Rome collapsed.
Speaker Pelosi and Minority Leader Schumer represent California and New York. They regularly make statements about how we need to show more compassion for the less fortunate. However, they have two of the highest state fuel tax rates in the nation. They are adversely affecting the people that they say we need to help.
In fact, they are doubling down. President Trump, Speaker Pelosi and Senator Schumer recently met and announced that they were in general agreement on an infrastructure package. Pelosi and Schumer apparently are advocating that the federal fuel tax rates be increased to help pay for the infrastructure enhancements they are advocating.
AN ALTERNATIVE AND NON-REGRESSIVE WAY OF FUNDING INFRASTRUCTURE
Imagine the discussion over funding the proposed infrastructure package if the FAIRtax replaced the present income/payroll tax system:
- Congressional leaders and the President meet and determine the cost of the infrastructure package.
- A calculation would be made of the annual budget needed.
- Assuming that the cost could not be paid from current income, the U.S. Treasury would calculate the amount that the 23% FAIRtax rate will need to be increased.
- Then the Congressional leaders can draft legislation to fund the infrastructure package by increasing the FAIRtax rate to a specified percentage and get the agreement of the President.
- The next step will be for Members of Congress and the President to go around the country and convince the voters that the proposed infrastructure package and the addition to the FAIRtax rate was in their best interest.
- At the next election, the people will decide if the Members and the President were right to increase the FAIRtax rate to pay for the infrastructure package.
CONCLUSION
Everything stated above is contrary to the way that the Swamp and most Members of Congress think. You can see them looking at the above statements as not only improper but rash and dangerous.
Let the people see the actual cost of the law Congress enacted and how it affects their personal consumption by seeing the increase in the FAIRtax rate in every purchase. Horrifying.
They may have to answer questions about why the costs for implementing the actions specified in the law seem so much higher that what others pay for the same service This is frightening because then the special deals that the Swamp and Members of Congress have made for their friends will be challenged.
You ask, “Won’t the increase in the FAIRtax rate be regressive?” The answer is simple—no. Congress can just increase the monthly prebate (tax credit) by an amount to ensure that people do not pay the increased amount until they spend more on new goods and retail services than the poverty level for their family size. This additional cost will be included in the calculation of the addition to the FAIRtax rate.
Most people will agree that the best way for a government to treat its people is to be frank and honest with them about the things for which the people are being asked to pay.
Most people will also agree that the Swamp and Congress will resist this attempt to empower people to allow them to truly be the rulers of their destiny and not the mindless slaves of the Swamp and some of the Members of Congress.
The author George Bernard Shaw said these words in a play he wrote, You see things; and you say “Why?” But I dream things that never were; and I say “Why not?”
Isn’t it time for us to ask, “Why not?”
Isn’t it time to take back control from D.C.?
President Trump, “Embrace the FAIRtax and real tax reform! Stand up to the Swamp. They will oppose you anyway because they see you as a threat. What have you got to lose?”
It is time to PASS THE FAIRTAX!
The truth is the truth. Remember, if we don't continue to tell the truth and demand a change, then this quote from George Orwell's 1984 may foretell our children's future:
“If you want a picture of the future, imagine a boot stamping on a human face—forever.”
WHAT CAN EACH OF US DO
Call up the local or D.C. offices of your House Member and two Senators and you can use the following script:
- I am sure that Representative ____ or Senator ____ is in favor of everyone obeying the income tax laws.
- After they assure you that their boss is not in favor of anyone breaking the law, ask if they are aware of the Cebula study showing $9 trillion of evaded income/payroll taxes over the next ten years.
- Since most will say they don’t believe their boss has seen the study, either drop off a copy or get an email address and send a copy to them for their boss.
- Say you are going to call back in a week and ask what the Representative or Senator is going to do to stop this evasion.
- In a week, call back and ask specifically what the Representative or Senator is going to do to enforce the law.
- They probably will say their boss believes that simplifying the income tax will handle the problem.
- Explain that when people evade income taxes, they are also evading the 15.3% payroll/Medicare tax and state income tax. So it is unlikely that they are going to pay 30% or 40% when they were paying 0% because they have already decided it is okay to cheat.
- Say that the only way to reduce evasion is to increase by tens or hundreds of thousands the number of comprehensive IRS audits done each year.
- Point out that Evaders do not self-identify by putting an “E” on their income tax return.
- 80% of the people likely to be audited are trying to comply, but they will be forced to endure these IRS audits as well.
- Ask if the Member is in favor of this?
- If they say no, then ask again how the Member proposes to stop people breaking the income tax laws.
- Then explain that the way to handle evasion without unleashing the IRS audits is the FAIRtax.
If you can see your Member or attend a town hall and ask these questions, you can be even more effective.
FAIRTAX POWER RADIO PODCAST & DIGITAL TV SHOW
#158 Corporations Don’t Pay Taxes - You Do!
There have been a number of reports in the news of large, profitable corporations that paid no federal income tax in a certain year. One report listed 60 companies in this category. And many of the authors of these articles are incensed at these companies.
The FAIRtax Guys ask “Did they do anything illegal?” If they were guilty of tax fraud, the IRS certainly would have fined them and this would have made the news. If the IRS did not find anything wrong with their tax returns, then just how can they avoid paying the federal income tax?
The answer lies in the phrase “federal income tax.” Yes, that complicated, Byzantine system that sees hardworking Americans pay their taxes while making it possible for large companies to legally pay little or no taxes is what makes this possible.
How was this tax system foisted upon the American public, who is responsible and how do we solve this massive problem? Listen to this episode to find the answers. But be forewarned - it’s not pretty!
The FAIRtax Guys break it down for you and, not surprisingly, offer the FAIRtax as the solution to our impossible federal tax problems. Listen to the podcast and/or watch the digital TV show.
We have yet another way for you to enjoy FAIRtax Power Radio/TV. And you don’t have to “join” anything or “subscribe” to any site. Just go to fairtaxguys.com to see our latest effort in getting the FAIRtax news spread far and wide.
If you believe the FAIRtax is good for America, PLEASE let others know by turning them onto FAIRtax Power Radio - the ONLY weekly FAIRtax digital TV show in the country! Watch every Wednesday at 11:30am (ET) on Facebook LIVE (www.facebook.com/fairtax). If you can’t watch live or you don’t use Facebook, go to fairtaxguys.com to watch the show and keep up with the latest events.
FTPR podcasts for each show are posted on Spreaker (http://bit.ly/2oesbk7), iTunes & iHeart Radio every Friday morning. Since it’s a podcast, you can download it and play it whenever it’s convenient for you. A free FAIRtax Power Radio app is available for iOS and Android.
The FTPR weekly video episodes are Shared to a number of Facebook pages: FAIRtax Official (https://www.facebook.com/FairTax/), The FAIRtax Guys (https://www.facebook.com/thefairtaxguys/), Democrats for FAIRtax (https://www.facebook.com/DemocratsForFairTax/) and many others. And don’t forget the new website that is not on Facebook: fairtaxguys.com
Please help us educate as many Americans about the FAIRtax as possible. Be sure to tell everyone you know about this great format for FAIRtax Power Radio. Whether you watch the weekly TV show or listen to the weekly podcast, this is a great way for more Americans to learn about the best tax reform plan in Congress at this time.
Remember, FTPR digital TV every Wednesday at 11:30 AM (ET) followed by the podcast on Friday morning and the new website (fairtaxguys.com) anytime. Please watch, listen and tell everyone you know about FAIRtax Power Radio. The FAIRtax: Once You Understand It, You’ll Demand It!
LINKS TO MORE INFORMATION
These links will help you promote and support the FAIRtax, make yourself familiar with the links below. We always do our best to keep our AFFT community up to date, and you can stay ahead of the curve using these convenient sites.
- The website of Americans for Fair Taxation (www.fairtax.org)
- Welcome to the Online FAIRtax Community (member.fairtax.org)
- The website at which you can help make it happen. (www.bigsolution.org)
- The free website of The FAIRtax Guys. (fairtaxguys.com)
- The Facebook page for Americans for Fair Taxation
- The Facebook page for The FAIRtax Guys
- The Twitter page for Americans for Fair Taxation
- PopVox - The People’s Voice on all things legislative.
- YouTube channel for AFFT
- YouTube channel for The FAIRtax Guys
- The Official FAIRtax Logo Store (www.fairtaxlogostore.org)
- Read the Summary of the Evasion Study.
AMERICA’S BIG SOLUTION - THE FAIRTAX PRIMER AMERICA NEEDS
Hard to believe but there still are people who have not heard of the FAIRtax.
For those people, America’s Big Solution provides a starting point in their study the FAIRtax and is meant for people of any age. And you can download it to your tablet or smartphone right now. It’s also available in print form. See below.
Do you know someone who would like an introduction to the FAIRtax and would prefer to read about it in a booklet rather than search online for Tweets, Posts and Shares? If so, America’s Big Solution is their best choice.
America’s Big Solution is an introduction to the FAIRtax written by Terry Tibbetts, author of A Spartan Game: The Life and Loss of Don Holleder, with help from Ron Maiellaro, President of the Florida FAIRtax Educational Association.
You can buy an electronic version of ABS as follows: AMERICA’S BIG SOLUTION is available for only $2.99 for the Amazon Kindle (http://amzn.to/1WIRHry), the Barnes & Noble Nook (http://bit.ly/1XeG8bH) and Apple iOS (http://apple.co/1tnqK0P).
You can purchase a print copy at the same Amazon link above for $9.25. Regardless of whether you choose the electronic format or the print format, you’ll find AMERICA’S BIG SOLUTION will give someone the boost they need to begin their study of the FAIRtax and the suggested resources to learn more. Buy AMERICA’S BIG SOLUTION now!
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