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February 17, 2011

Oil Holiday Tax? Relief From High Oil Prices

An oil tax holiday is not the answer for high gas prices. While this may seem like something that is desirable, it really is not. Not to mention, cutting taxes on oil is a great way to give oil producers a break. Sure, it will seem like a huge relief because any reduction in gas prices seems that way, but really, what will that accomplish in the long run? The oil tax holiday can not last forever so what happens when it is over? The gas prices go back to normal.

Before cutting the oil tax or being in favor of that, you should know what the tax on oil pays for. In the U.S. the taxes on oil help pay for road restoration throughout the country. After a harsh winter there are plenty of roads that need repairs. Cutting the tax on oil would reduce the amount of road work that could be done. Also, a gas tax holiday will encourage people to drive more, thus, making oil producers more money and pushing the demand for oil up higher. More pollution, more oil demand and eventually, oil prices would increase because of the higher demand.

Although I do not like paying as much for gas as I have been paying in the past few weeks, it has made me cut down on my driving. If I can walk, car pool or complete all of my errands that require me to drive in one trip, I do. The price of gas has forced me to consider other ways of getting around town and that is a good thing. We know that emissions are detrimental to the environment and coming up with greener ways to get travel is important. The higher gas prices are, the more apt we are to consider not buying as much gas.

An oil tax holiday could also plunge the oil industry into a crisis. A drop in oil prices during the summer could lead to higher demand than oil industry can keep up with. This also would not be a good thing. The bottom line on the oil tax holiday is that not only does it not solve the gas cost issue, it could actually make it worse.

Having an oil tax holiday is something that consumers want to hear so some politicians are going to say it. However, it is important to be able to recognize smoke in mirrors. Who is suffering the most from the higher gas prices? SUV owners and people that do not walk anywhere. Of course there is the argument that poor people are suffering form gas prices but that is not the case for the most part. Poor people are very resilient and most of them do not have big expensive cars that guzzle gas. In fact many poor people do not have cars at all and they use the public transit system or ride with others. So really, the people that are very angry about gas prices are the ones that have the huge, gas guzzling, environmentally unfriendly cars. If you want a vehicle that is the size of a small house, you will have to pay the price for having it.

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