Letters to the Editor
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The devil's in the details...
The federal tax is on the producers, regardless of where they sell the gas or who sells it. It is embedded in the wholesale price of gas sold at the refinery. The Illinois tax was a form of sales tax collected at the pump.
In a competitive industry, the refiner doesn't say, "Lessee, it cost me x dollars for the oil, y dollars to refine it (calculating the cost to refine a barrel of oil is itself complex), z dollars in federal tax, and my profit is p, so the wholesale price I'm going to charge is x+y+z+p." Things simply don't get priced that way. If McCain's proposal became law, would the price of gas go down 18.1 cents? No, but it would probably go down, at least temporarily. If Three Name's proposal became law, the price of gas wouldn't go down at all because from the oil company's perspective what's the difference? Tax the gas or tax the oil, it's still a cost of doing business and it will be passed on to the consumers. And by the way, getting into the producer's accounting system to try to enforce the x+y+z+p scheme has another name - the Communist Command Economy. We should all know how well that worked.
A sales tax, collected from the seller is different. If the seller doesn't have to pay it, he doesn't have to collect it. The price of gas will go down.