Tuesday, April 01, 2008

Congress Poised to Raise Gas Prices

You haven't seen that headline, have you? But the recent hearings being held by Congress on how the tax laws benefit the oil companies gives me every reason to believe that they are looking at legislation that will close "loopholes" in the tax system. Closing those loopholes will, in turn lead to price increases. Why do I come to that conclusion? Because corporations don't pay taxes, they are merely tax collectors.

Simply put, businesses are not philanthropic, but are in the business of making a profit. Taxes on business are always absorbed by their customers either through high prices or lower quality (or both). High taxes will eventually lead those businesses to pursue those options are relocate.

If Congress is doing more than election year rhetoric (a huge possibility, of course), than expect them to raise your prices through what essentially will be a tax increase. Because "closing loopholes" has that exact same effect.

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Kevin Price is Host of the Houston Business Show (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at HoustonBusinessShow.com. Visit the archive of past shows here.

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Anonymous Ryan Ford said...

What do you expect? Congress doesn't produce anything but regulations, taxes, and heart ache for those trying to make a difference in their lives.

8:50 PM  
Anonymous Anonymous said...

I'm not sure I understand. If Congress takes away the loopholes, the oil companies will raise prices?

9:21 AM  

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