Just saw this. Will read after sharing. (Using Italics way too much)
https://www.kcra.com/article/gov-new...anies/41560952
E-conomics: . . . , that's it.
Originally Posted by eccieuser9500
I'd say welcome back amigo, except I'm kind of on sabbatical right now.
Gallagher and Wong make more sense. I looked into this not long ago. I'm too lazy to look up the links. But from memory, California only produces about 29% of the oil it consumes. The majority is imported from other countries and some comes from Alaska. Production is California is way down from the mid 1980's, from around 1 million BOPD to 350,000 BOPD at present. Part of this is because of state regulatory restrictions. Right now, there's a ban on fracking for example.
So what I'm getting at is that they're not going to raise much money from a tax on the California oil producers, because California is no longer a big oil producer. And some kind of windfall profits tax would just discourage the companies from investing money to maintain or increase production.
So then the other option is to look to raise money from the refiners. For the entire USA, the longer term, after tax profit margin for independent refiners and marketers is about 2.2%. However, the margin in the 2nd and 3rd quarters of this year, was double that, about 4.4%. So say California puts a tax on refiners, equal to, say, 2% of revenues, which would bring margins back closer to long term levels. That wouldn't raise much money. 2% of $5.00 a gallon is only $0.10 a gallon, which doesn't make much of a difference in what the consumer has to pay.
California charges total taxes and fees on gasoline of about $1.00 a gallon. So, like Gallagher and Wong say, dropping that back is probably about the only way California has of making a significant dent in the price at the pump. Another thing it could do is remove the restrictions on the type of gasoline that can be sold at the pump. California has special formulations to reduce smog that aren't required in the rest of the USA and the world. So, when you have refinery shutdowns for maintenance in California, which I understand is part of the problem right now, you can't simply import gasoline from other places to meet demand and lower prices.
If you do lower the gasoline tax and lift restrictions on reformulated gasoline, you could reasonably argue those moves should be temporary, to help people who are having problems coping with the higher cost of gasoline right now. A higher gasoline price should reduce consumption and thus reduce carbon emissions, and the special formulations do help with air quality. While as you know I'm not a fan of higher taxes, you do have to tax something. And a gasoline tax IMHO makes more sense than mandates, like for example California's move to go entirely to EV's. Let the market work.
