Latest FITE Newsletter

Newsletter #27

Re: corruption, taxes, and gas prices

Remember all those tax cuts that “benefited American families?” Most American families saved around $450. But the gains have been more than erased by the more than $500 extra paid annually for gasoline and heating oil. Then again, they were already erased by increases in local taxes and fees in the same time period.

We have explained in previous newsletters how Bush’s irresponsible tax cuts and profligate spending caused OPEC to increase oil prices. But the price of crude is only one part of the story. Refiners are making the biggest profits in a long time, and a lot of that has to do with the fact that the Bush administration allowed 33 refinery mergers after the refineries dumped $3.5 million into Bush campaign coffers. The mergers translate into less competition and higher prices.

The refinery-Bush love fest will get even “better” if Bush is reelected because the new energy bill, providing some $25 billion in tax breaks, will likely pass after a Bush win.

Democrats Urge Bush To Act on Gasoline Prices

Oil Company Profits Go Through the Roof–Arianna Huffington

At the same time car owners are having to consider taking out a second mortgage in order to fill up their tanks, oil companies are raking in record profits.ConocoPhillips, for example, the United States’ largest oil refiner, recently reported its largest first-quarter profits ever. And Exxon Mobil just posted its highest first-quarter refining earnings in 13 years.

Coincidentally, these companies and their oil and gas industry brethren have a highly profitable habit of greasing the receptive palms of their friend George Bush—doling out more than $3.5 million to his 2000 and 2004 presidential runs.

So for American consumers, payback is a bitch. And over two bucks a gallon at the gas pump.

–Center on Budget and Policy Priorities

The tax-cut package the President signed into law May 28 carries an “official” cost of $350 billion through 2013, but does so only through the massive use of budget gimmicks. Every provision in the bill but one expires between the end of 2004 and the end of 2008, and most or all of these provisions are nearly certain to be extended. If the provisions are extended, the cost of the legislation through 2013 will be $807 billion to $1.06 trillion.[1]In addition, the bill is heavily tilted toward the upper end of the income scale, with households that make over $1 million a year receiving an average tax cut or $93,500 in 2003, while households in the middle of the income spectrum receive an average tax cut of $217. Some 36 percent of households will receive no tax cut at all; 53 percent will receive $100 or less. Because the bill provides the preponderance of its tax cuts to higher-income tax filers, a group more likely to save rather than spend its tax benefits than middle- or low-income households, the bill also is likely to be highly inefficient in boosting the economy in the near term.

Charles Palson

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