Reality Check: Eliminating The Federal Gas Tax - Cincinnati News, Weather, Sports from FOX19 NOW-WXIX

Reality Check: Eliminating The Federal Gas Tax

By Ben Swann email | bio

(FOX19) - Right now for lawmakers it's popular to talk about greedy oil companies and how we've got to get rid of tax breaks for those companies because they are ripping off the American people.

A new plan from Kentucky Senator Rand Paul flips that idea on its head.  He wants to eliminate the federal gasoline tax.

"They say lets go after those greedy oil companies because they are making a profit.  Of all the money you spend at the pump about 7 cents is profit to the oil companies."  Sen. Paul told members of Congress.

That is true.

From every reasonable source I have found, the amount of money in profit that oil companies make on a gallon of gasoline, ranges from 7 to 10 cents.

But there are a lot of other people with their hands in the pie.

The feds take 2 to 3 times that amount.  The federal gasoline tax is 18.4 cents per gallon.

And then the states get in there too.  The state of Ohio takes an additional 26 cents per gallon in tax.  Indiana adds on 18 cents.

Kentucky adds on a 15 cent tax per gallon.

"Lets have a gas tax holiday.  Lets get rid of the 18 cents for the next four months, though the summer season.  It will cost the treasury. There will be less money coming into the treasury."  says Sen. Paul.

That is also true.

So how much tax revenue do the feds take in each year from us filling our gas tanks?  Around $30 to $35 billion dollars each year which goes into the federal highway trust fund.

That money is used to maintain bridges and interstate highways.

Senator Paul wants to get rid of the gas tax for four months, which means we would have to make up for 10 to 12 Billion in lost revenue.

"I would just ask Sen. Paul how we're ever going to do the Brent Spence Bridge, how we're ever going to do the kind of infrastructure that we need on 71 and 75."  says Ohio Senator Sherrod Brown.

And that's a fair question.

But it is one that Senator Paul has answered.

"Lets eliminate our gas tax.  Lets take the money from foreign aid and lets give it back to the American people who have worked hard to earn it.  You can't do it forever but you can do it for 4 months and get rid of foreign aid." says Sen. Paul.

Right now the U.S. spends roughly $30 billion dollars in foreign aid.

This goes to a number of countries throughout the world.  Senator Paul makes the argument that we could use that money to fix our own roads and bridges rather than building them in other countries.

Here's what you need to know.

The idea of getting rid of the federal tax on gasoline might be popular among Americans.  A Rassmussen poll shows that 44 percent of Americans say drop the federal tax.

But that probably won't happen because talking about getting rid of a tax in Washington D.C., after all, that's crazy talk.

While Sen. Rand Paul wants to get rid of the gas tax, there are other politicians talking about a new driving tax, where you would be taxed on the mileage on your car, to pay for highways.

The way politicians like to spend, that scenario is more likely.

And that is Reality Check. 

http://www.nacsonline.com/NACS/Resources/campaigns/GasPrices_2011/Pages/StatisticsDefinitions.aspx 

http://www.exxonmobil.com/corporate/files/news_pub_fo_2007.pdf

http://www.gaspricewatch.com/usgastaxes.asp

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