Gas Tax Increase

On July 1, the Democratic controlled Connecticut Legislature will impose another insult to the Connecticut taxpayer. The Connecticut’s gross receipts tax on petroleum products will increase to 7.5% from 7%. According to the state Office of Policy and Management, for Fiscal 2008, which ends June 30, the state originally project­ed collecting $297 million from the gross receipts tax. It recent­ly revised that figure to $350 million — an increase of $53 million, or 18 percent. Our Connecticut legislatures in Washington are promoting a windfall profits tax on oil companies. But the windfall profits are being made by the state. Only 38% of the money goes to the transportation fund. The rest goes to the general fund. Diesel fuel also will get an 8 cent boost. The oil companies make about 8-10% profit. The value of the dollar has a large affect. But the state and federal government should give the taxpayer a break and cut spending like the taxpayer has to do.

Energy Bill

The most recent energy bill passed by Congress will increase ethanol production to a point where 25% of the U.S. corn crop will be used to create a fuel that is not as efficient as gasoline, cannot be shipped by pipeline, and uses huge amount of water to produce. This is not a 'green' fuel. Large commercial farms that average $200,000 in annual income and $2 million in net worth get subsidies, and the bill allows a single farmer to earn more than $1 million before cutting subsidies. The farm bill will cost taxpayers nearly $300 billion, including $5 billion for direct payments each year to farmers, regardless of whether they grow anything. Buried within its hundreds of pages is $93 million in tax breaks for race horses, a $4 billion trust fund for disaster payments on top of subsidized crop insurance that is supposed to take care of such "disasters". Of course this is business as usual for a Congress seeking re-election no matter what party. The addiction to farm subsidies causes prices to rise to the consumer. Unfortunately, many voters ignore these bills and vote not on a candidates record but rather on what they promise, which rarely is fulfilled.

Student Loans

A recent Wall Street Journal article highlighted a problem caused by the intervention of Congress into the free market. It seems that some Democrats in Congress felt that lenders were taking advantage students who wanted to go to college and needed loans. So last September they passed the "College Cost Reduction and Access Act' ostensibly to make college more affordable. It probably would have been quite attractive to the younger voters.

The law reduced the interest rates borrowers pay on federally insured student loans. Backed by the Federal Family Education Loan Program, these loans account for more than 70% of education lending. Taxpayers will fork over $7 billion by 2012 to pay for the rate cuts.
But Congress didn't stop there. Convinced that the private lenders who make these loans were reaping too much profit, Congress also cut the yield on each loan. The return on the popular Stafford loan for undergrads was reduced by 70 basis points. For loan consolidations, Congress cut returns by 65 basis points.

Then along comes the credit crunch with lenders like market leader Sallie Mae saying it now loses money on every new federal education loan. As a result, some lenders are backing out of this loan market. A third of the nation's top 100 lenders to students in 2007 have temporarily suspended new loan originations or exited the business altogether.

So to not look weak especially on big bad business, the same man who authored last year's bill to cut lenders' returns has crafted a new bill to subsidize those same lenders. ,Education and Labor Chairman George Miller got a bill passed to give the Department of Education new authority to purchase loans directly from lenders. Of course the Senate needs to approve the bill as well. In the meantime, to show they are doing something faster, some Democratic Senators are asking the Fed to accept student loans as collateral under the Fed's new Term Securities Lending Facility. They sent a similar letter to Treasury Secretary Paulson asking him to order the Federal Financing Bank to buy student-loan-backed securities.

So Congress has tangled with the free market and really messed it up. The cover-up is in process that costs the taxpayer even more money. Don't trust Congress to watch your money like you would.

Moral: If you mess with the free market, it will bit you.

http://online.wsj.com/article/SB120899430294839827.html

Cost of Gasoline

I received a newsletter from Rep Chris Murphy about his efforts on the cost of gas. He stated their is little that can be done and touted the mandating of renewable energy generation as a good thing and that the President as opposed that. Just like ethanol, renewable energy cost more than current forms of energy to produce. Mandating the use of energy generated by renewable sources will drive the price of energy to the consumer. These forms of energy generation will need to be subsidized until they are large enough to compete with current forms of generation. Ethanol is a giveaway to big farmers which is a popular tactic in an election year. But it only drives up food costs. Other ideas form Rep. Murphy include not adding to the Strategic Petroleum Reserve which I can't argue with at this time. Also stop gas price gouging which all studies seem to indicate is not occuring. And prevent price fixing by OPEC. A lot good that will do. What are going to do not buy from them?
Since the 70's, Democrats controlled Congress for all but 8 years. During that time there was little done to get us of the oil addiction. Environmentalists have prevented refinery construction since '76. Drilling offshore and in ANWR have been turned back. Windfall profits tax has been threatened even though the oil industry average profit is 8.3% which is comparable to other industries. But facts never stop a good thrashing during an election year and big oil is the target. The gov't needs to back nuclear plant construction which has been used extensively by France for electricty generation but has been stalled here by costs and environmental reviews. We need a group of experts to establish a path to energy independence.
The Democrats have no new ideas. Senator McCain has suggested rolling back the Federal Gas Tax for the summer. If the state legislature added their tax it would cut 62 cents from a gallon. Sounds like a good idea to me.

CT Legislature's Ideas

In the last couple of weeks the Connecticut legislature has come up with some interesting ideas. The first was the package tax. No one seem to know how it works, what would be taxed, how it would be collected, or just how much it would bring in.

The other idea is the fine for idling a gas engine for greater the 3 minutes. The latest idea would move enforcement from DEP to the police. Just what our police need to be doing. I don't know if it also includes my lawnmower.

It really makes me wonder what our Democrat controlled legislature is thinking. Maybe they should be thinking of reducing the taxes on gasoline to make it affordable to travel. Or maybe they can think about reducing the budget so Connecticut can stop the flight of businesses. Maybe they can look into why the UCONN campus at Storrs has fire code violations.
Instead they look for more revenue which will be passed on to the consumer and more work for the local police to do. Just think of what they could think of if they were full time lawmakers.

F and S Oil

I unfortunately was one of the victims of the F&S Oil default having paid in advance for 1000 gallons of oil. Fortunately, my pre-pay was done by credit card and I am happy to report that my credit card company has refunded to me the reminder of the value of the contract. So for those that did pay with a credit card, petition your company and in the future, people should use their credit cards for this type of purchase.

CT Gas Tax

State Senator David J. Cappiello, R-Danbury, today said that legislation that he proposed to stop the scheduled July 1st increase to the gross receipts tax on gasoline has cleared the legislature’s General Law Committee and is on the way to the Senate. Since 2005 the state has taken in an additional $141 million from the gross receipts tax. In 2008, the state expects to take in a record $320 million from the tax. The current tax rate is 7%, up from 6.3% last year. The scheduled July 1st increase would raise the rate up to 7.5%. Since it is percentage based, as the price of gas increases so does the tax. Maybe the Attorney General should investigate this price gouging of citizens who are already subjected to the highest gas taxes in the Northeast. A large amount of these funds go to general revenue and not necessarily to the roads and bridges for which it is intended. This needs to be stopped and even rolled back to give some relief to drivers and businesses.
http://www.senaterepublicans.ct.gov/press/cappiello/2008/031808.htm