Friday, May 9, 2008

Income Tax or Gas Tax? Your choice!

We are paying $3.7/gallon currently. CNN cited a survey that 8-9 out of 10 Americans now expecting to pay $5/gallon at the pump in future.

So let's say they are right, they do pay $5/gallon, but instead they start paying it now, with 30% of $5 going towards gas tax. So how much are we talking about?

Americans consume 140B gallons gas a year. So gas tax revenue comes at $200B. This is enough for an income tax rebate for every American of $600. Or it can be used as public transportation credits and investment, energy conservation credits and green energy credit.

Now if Americans are willing to pay the European rate of $7-8 starting today. Gas tax revenue becomes $400B. That's enough for income tax rebate of $1200. And if Americans are willing to pay $10/gallons, gas tax revenue becomes $800B, almost enough to give an income tax holiday for lower/middle class Americans for a whole year.

Interestingly, there are already talks of $10/gallon. People increasingly expect it, the only difference is you will be paying the $10 all to OPEC and refiners, and still have to pay Uncle Sam. You do the math.

Sign our petition if you would like to see our gas tax hiked

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