Another Government Program Won’t Ease The Burden Of High Gas Prices – Pacific Research Institute

Another Government Program Won’t Ease The Burden Of High Gas Prices

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The ignorance of economics – or the eagerness to ignore them for politics – is staggering. Prices fall – isn’t this what Newsom ostensibly wants to happen at the gas pump? – only when companies produce more of something at a lower cost. But punitive taxes and obstructive regulation, both common in California, are barriers to increased production.

Further confirmation that California is on the wrong side of the rabbit hole came on the last day of September, when Gov. Gavin Newsom called for a new tax on oil companies in response to the high cost of gasoline.

“​​Oil companies are ripping you off,” he tweeted. “Their record profits are coming at your expense at the pump.

“I’m calling for a NEW windfall tax exclusively on oil companies. If they won’t lower their prices, we will do it for them.

“The $$ will go directly back to you.”

So, if we have this straight, under the plan, the state will levy an additional tax on oil companies to punish them for prices that are skewed by California public policy, then send those taxed dollars, minus of course Sacramento’s “handling fee,” back to consumers.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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