GasPricesToday, the American people find themselves once again victims of rocketing gas prices. We are victims not because our demand is out of control…it is actually down; not because there is a shortage…as a result of a record warm winter domestic supplies are ample. It is not because the exports are up; they are actually significantly down from prior years.

With domestic production up, domestic demand down, why are the American people taking it on the chin? Iran is doing sabre rattling, but we do not buy from them and have not for years. We are being told that we are taking it on the chin because oil is a commodity and because it trades on a global market we have to pay for other countries’ consumption and Iran’s sabre rattling.

This rationale is pure bull. Yes, a free market will always seek the highest returns but it is important for the Government to develop an environment that promotes domestic prosperity not encourage an oligopoly market to rape the American people. By taxing income, we encourage corporations to be indifferent to the local markets. If we taxed consumption…with a twist, a favorable domestic market could be established. In a consumption-based market, exports generally do not carry any tax basically trading jobs for tax revenues, very similar to a VAT tax. A tweak to the consumption tax to include a tax on raw materials, lumber, coal, oil etc. may create a favorable domestic market for commodity consumption. If the consumption tax is applied to the export of commodities, the domestic market could receive up to 20%+ percent advantage over the global market on domestically produced commodities. A 20%+ advantage represents 80 cents per gallon benefit on $4 gas. Deciding how to apply the consumption tax would require some judgment but targeting nonrenewable natural resources would make the most sense.

The role of government is not to tax and spend but create an optimal nation to encourage prosperity.

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