Utterly Meaningless » Blog Archive » DUMB IDEA OF THE DAY

    Filed at 4:27 am under by dcobranchi

    From the NYT:

    One way to do that would be to establish a price floor of $3.50 per gallon on gasoline. If the price drops below that, as it recently has, the federal government would impose a variable tax to bring the price up to $3.50. If the price goes above $3.50, then the tax disappears. The money raised by the variable tax would be used, at least in the short term, to provide loan guarantees to the auto companies. (To ease the burden of higher gasoline prices on low-income taxpayers, some of the revenue would be provided to them as tax credits or vouchers.)

    This proposal would make the oil companies VERY happy. They would always charge a minimum of $3.50 for their gasoline, even if oil dropped to $10/barrel. Talk about windfall profits! And the government would never see a dime of the direct taxes. And I’m sure ExxonMobil has oodles of really smart tax attorneys and accountants on staff so that they would get out of paying income tax on the windfall, too.

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