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Who Pays Gas Taxes?

I'm from Wisconsin originally; here's a typical cartoon which illustrates the breathtaking economic ignorance so prevalent in the media:

Let me ask you a question: If the Governor raises taxes on all companies which sell gasoline in Wisconsin, do you think they will:

1. All, together, cut their profits and decide they didn't need that extra money, OR
2. Simply pass along the extra cost to consumers?

For those who reflexively vote for things with a (D) next to their name, the answer is #2: the fellow on the right will pay Governor Doyle's added tax -- not the oil companies. I guess he wants to shell out even more for that gas he's pumping.

Comments

Good followup, though I'm not sure I buy the second consequence you suggest. Oil companies don't care about "overhead" per se so much as profit. And it doesn't hurt their bottom line if a gasoline pump in Sheboygan adds 30 instead of 20 cents to what the customer pays -- drivers still needs the gas, so demand won't decrease (much), and having the reseller (the gas station) punch in a higher tax number isn't any huge overhead.

Although if he's trying to institute a separate tax mechanism, I can see a little of the effect you're referencing. But probably not enough to drive the company out of the state, to avoid dealing with compliance.

So, all in all, if I were the guy pumping gas, I'd be irate and ask for a picket.

Notice how carefully-drawn the characters are. The "GOP" character wears a bowtie and suit (indicative, no doubt of "old money" -- he probably has ties to the oil companies!) and small intellectual-looking glasses. The ordinary guy (wearing a Milwaukee Brewers' T-shirt) of course espouses the Democrats' view that higher taxes are good, or at least won't cost him more.

So the message of GOP-bad, protesting-is-bad is instead subtly communicated to the reader's social sense: Hey, don't think about costs to you; remember: these guys are greedy dweebs. Don't you hate their smug arrogance?

Propaganda in the purest sense.

The funny thing is, I'm familliar with the Milwaukee area, and it is the older (and wealthier) urban voters (the guy on the left) who tend to support the Democratic party (in fact, I know an ardent Democrat who looks a lot like that, round glasses, suits, and all).

In contrast, the comparatively younger working-class family people (the guy on the right), have generally moved to the county next door (Waukesha County) and tend to support Republicans.

Amusingly, here's the cartoonist's bio and pic; you decide who he most resembles...

His work has appeared in The New York Times, Newsweek, The Washington Post, Barron's, Playboy magazine and on ABC News' "Nightline." Carlson lives in a maintenance-intensive Victorian house in Milwaukee...

Posted by: Tim (Random Observations) on June 2, 2007 10:22 AM

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