TAX TIME REMINDS AMERICANS ABOUT GOVERNMENT'S COST

Bob Tippee
Editor

At this time of year more than any other, Americans feel the costs of government.

By Apr. 15, Americans with income must produce documents guessing at their 2005 tax liabilities, along with whatever payments may be in order. They guess because lawmakers doing favors for narrow interests have made an impenetrable hash of tax law.

Many Americans employ specialists to sort it all out and might not notice how perplexing tax preparation has become. Most who do notice steam about it awhile only to retreat into their own, more comprehensible affairs until reminded again the following April.

Meanwhile, the army of tax specialists grows, never losing its focus on the exemption-riddled, means-tested, endlessly cross-referenced confusion on which it feeds, ready to lobby any suggestion for change into oblivion.

Angry yet? Good. This item is about how much Congress—author of the Tax Code—will cost the US Treasury with its ethanol mandate for gasoline.

In a footnote to a report issued last July, the US Energy Information Administration calculated that every gallon of fuel ethanol reduces federal excise tax revenue by 44.9¢. A gallon of ethanol displaces two thirds of a gallon of gasoline and enjoys a tax benefit of a net 32.6¢. That's the difference between the federal gasoline excise of 18.4¢ and the ethanol tax credit of 51¢. Adding 12.3¢ of federal tax forgone on two thirds of a gallon of gasoline yields 44.9¢.

The Energy Policy Act of 2005 requires fuel ethanol sales of 4 billion gal in 2006, 4.7 billion gal in 2007, 5.4 billion gal in 2008, 6.1 billion gal in 2009, 6.8 billion gal in 2010, 7.4 billion gal in 2011, and 7.5 billion gal in 2012.

That's 41.9 billion gal during the mandate's phase-in for a reduction in federal revenue of $18.8 billion, an average of $2.7 billion/year. After 2011, the cost is $3.4 billion/year.

Against the whole federal budget, that's not much. But the government won't do without the money.

And it's money Americans otherwise could put to productive use such as paying strangers to guess how much tax they owe.

(Online Apr. 7, 2006; author's e-mail: bobt@ogjonline.com)

Related Articles

Speaker suggests how Russian regime change might occur

02/27/2015

Speculative details about regime change in Russia have emerged from an especially interesting source.

Chevron wins again in Ecuador case as moneyman recants

02/23/2015 With another triumph in its long battle against litigious gold-digging involving Ecuador, Chevron Corp. again demonstrates the goodness of corporat...

Oil forecasts need a new asterisk for supply instability

02/13/2015

Do projections of worldwide oil supply need another asterisk?

EPA offers new, twisted excuse to stall Keystone XL

02/05/2015 Anyone puzzled by the delay in approval of the Keystone XL pipeline border crossing—running 6 years now, and counting—should read the Obama adminis...

After Keystone nod, Congress should okay ANWR leasing

01/30/2015 Now that it has passed legislation supporting the Keystone XL pipeline, Congress should approve oil and gas leasing of the Arctic National Wildlife...

Data refute Lew’s claims about taxes paid by producers

01/23/2015

On the subject of taxation, administration officials count on the public to believe anything.

Market watchers’ adjustments offer hints of recovery

01/16/2015 Because markets look ahead, changes in standard forecasts offer potentially important signals during storms such as the one now pummeling the oil a...

Study probes link between US dollar’s value and oil price

01/09/2015

While the US dollar’s value against other currencies influences the price of oil, the relationship is complicated.

Condensate export status a problem with easy solution

01/02/2015 Some perplexing problems have simple solutions. A problem perplexing US producers and regulators is the status of condensate relative to the longst...
White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST



On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected