As you well know, Congressional Democrats are trying their darndest to get a massive $3.5 trillion spending bill passed. They say it’s to save the economy and rebuild the nation into something better, starting with basic infrastructures like roads, bridges, and low-income housing.
However, a closer look at the bill reveals all sorts of pork, a term used to describe hidden or rather useless ideas and policies.
One such fatty item is the creation of $6 billion in new taxes on the oil and gas industry. The basic idea, of course, is to get more income for the federal government, supposedly in the hopes of paying off debts and lowing the extremely high national debt. However, as several gas and oil-related explained in a recent letter to the House Natural Resources Committee, in doing so, it could cause massive problems for not only the economy as a whole but the entire gas and oil and industry.
Western Energy Alliance, the US Oil and Gas Association, the International Association of Drilling Contractors, and the Energy Workforce & Technology Council wrote that with the “ill-conceived and punitive fees, royalties, and penalties in an effort to raise just six billion dollars in revenue” would eventually end up limiting the supply of some 6,000 everyday and household items currently on the market.
In addition, it would only raise gas and oil prices. And all of it would lead to higher-than-average adverse effects on the elderly, Native Americans, and low-income families.
As for how it will raise gas prices, that one’s a bit obvious. Anytime you place a tax or raise current taxes on one industry or item, the products affected by those are more than likely to go up. And since the legislation would raise taxes on oil and gas, it means gas companies will undoubtedly be forced to raise their prices to make up for those losses.
As economist Stephen Stanley explained back in 2014 for a CNN article, every penny taken off the national gas price equals about a full $1 billion in “tax cuts” for Americans. By the same logic, it means that the opposite is also true, that every penny added to the national gas price increases Americans spending by about $1 billion.
And as current data from the AAA says, the price of gas nationwide has risen some $1.17 in the last year. That means about $117 billion being taken out of Americans’ pockets, with no sign of that being decreased.
Now, let’s talk about how this tax raise would affect the global market and national economy.
As Just the News reported, crude oil is used for many things in the United States. Of course, we have the obvious ones like finished motor gasoline, distillate fuel or heating oil and diesel fuel, and jet fuel. But then we have “13 other types of petroleum” made. And these various resources are used to create a massive amount of products, from your water bottle and cleaning supplies to the clothes on your back and the medicine you take.
As Just the News said, “To put this into perspective, one 42 gallon barrel of oil creates 19.4 gallons of gasoline. The remaining half of the barrel is used to make more than 6,000 products.”
That’s six thousand products that, when heavily taxed, are no longer available to the American public – at least not in the quantities they once were.
And while this might most definitely affect your household on some level, others will be affected more. You know, like the small businesses who depend on these products, either for sales or the creation of their products.
Or what about the rural communities who depend on those small businesses’ success? When those mom-and-pop shops close their doors for good, the community takes a major loss, and some may not recover.
Neither will the families of the “tens of thousands,” including minorities, who lose their jobs over these higher taxes.
And don’t even get me started on the many Native American tribes and nations who depend on an oil-rich market and economy. As the letter states, “Tribal budgets will be eviscerated and the Native American allottees who receive royalty payments will lose those payments each month, trapping them in poverty.”
But, of course, Biden and his ilk have thought about any of that. Instead, they only see the dollar signs that could be rolling their way if they were to just step on the fingers of those hanging on for dear life just a bit more.