Pillage People and the pandemic
"Today, the price of gas in America, on average, is $3.40 a gallon; in California, it's much higher. The impact is real." That was Joe Biden on November 23. Nearly a month later the national average is 3.361 and still "much higher" in California at $4.67 a gallon, well north of $5 in some areas.
Biden also called for an inquiry into the price of gasoline, hinting that the producers are responsible. As Utah State professor William F. Shugart notes, Biden should look in the mirror:
Since taking office, he has canceled the XL pipeline, which would have lowered the cost of moving crude extracted from shale oil deposits in Canada and the Dakotas to Gulf Coast refineries, banned further exploration and drilling on federal lands, and canceled offshore oil leases. The president's failed attempt to lessen the pain of his green energy policies by encouraging OPEC to expand production is laughable.
According to an analysis by Stillwater Associates, taxes and fees boost the price of a gallon of gasoline by $1.18. The surge in prices, along with rigors brought on by the pandemic, have not motivated state or federal politicians to reduce or eliminate any of these taxes and fees.
California also boasts the highest rate of income tax, 12.3 percent, and workers hit a rate of 9.3 percent at $61,214, hardly a stellar income. California imposes a statewide sales tax of 7.25 percent, higher in some areas. During the ravages of the pandemic, when many workers lost their jobs, politicians did not seek to provide relief by lowering or suspending sales taxes.
In similar style, despite an open letter by 153 leading economists and scholars, California politicians declined to suspend the 2019 Assembly Bill 5, which slaps severe restrictions on independent contractors, health care workers, and even freelance writers and musicians. The punitive law remains in effect, and by restricting owner-operators, the measure was partly responsible for the supply-chain crisis this year.
Supporters of AB-5 included Sen. Elizabeth Warren, Sen. Bernie Sanders, and Sen. Kamala Harris, now vice president. A similar bill has yet to take effect at the federal level, but in the throes of the pandemic, politicians have not proposed deep cuts in the mountain of federal regulations. The costs of those regulations get passed on to the workers, and that calls for reflection.
Politicians and the vast administrative state constitute America's ruling class. The pillage people tax the workers, and the revenue must trickle down through multiple layers of bureaucratic sediment. As the workers surely noticed, during the throes of the pandemic, politicians, and bureaucrats kept their jobs and their benefits, while millions of workers lost theirs.
While prices surge, the pillage people decline to take measures that would provide relief, such as cutting taxes and regulations. Joe Biden could restore the Keystone pipeline, drilling on public lands, offshore leases and other measures. He has declined to do so, even during a pandemic, and as the holiday season approaches.
If embattled workers believe that the pillage people want them to pay the higher prices, it would be hard to blame them. The late Frank Zappa was on to the basic principle: "Cause what they do in Washington, they just take care of number one. And number one ain't you. You ain't even number two."
Last month Biden said, "My effort to combat climate change is not raising the price of gas or increasing its availability." And "even after accounting for inflation our economy is bigger and our families have more money in their pockets than they did before the pandemic."
Happy holidays, everybody.
Lloyd Billingsley is a policy fellow at the Independent Institute in Oakland, Calif.
Image: Luca Giordano.
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