Those awful oil company profits

They pay for all those neat things the government spends money on:

Politicians calling oil companies "greedy" is more than a little ironic. Tax Foundation studies have shown that state and federal treasuries profit handsomely from oil industry sales. The average American motorist pays taxes of 46 cents a gallon on gasoline, of which 18.4 cents a gallon goes to the federal government. States and localities pocket the rest.

The nation's energy companies are already providing a "windfall" of taxes. According to Department of Energy data, from 1977 to 2004, federal and state governments extracted $397 billion by taxing the profits of the largest oil companies and an additional $1.1 trillion in taxes at the pump. In today's dollars, that's $2.2 trillion — enough to buy a Toyota Prius for every household in the nation.

In fact, oil companies have paid in taxes more than three times what they earned in profits during those 28 years.

At both the state and federal level, the government loves to vilify those evil companies that fill our gas tanks but not so much to take drastic (and unpopular) steps to curtail consumption such as raising CAFE standards. George Will noted the same duplicity with tobacco taxes: the government wants taxes just high enough so that the cigarette tax gravy train will keep on rollin’:

If smoking policy were still primarily a public health policy, cigarette taxes would be calibrated to produce ``sticker shock'' just short of what stimulates smuggling, and to produce revenues trending toward zero. But with states facing their worst budget problems in a decade, many are becoming as addicted to cigarette tax revenues as some smokers are to cigarettes. These states have a large interest in preserving a large number of smokers.

If Americans were not paying $6 or more in taxes at each fill-up, we may not be in the midst of a price uproar. But taxes never go down and, in fact, the government calibrates them to extract maximum revenue. Ironically, that kind of “profit taking” is A-OK.