Doyle's Gas Tax Discussed in Pennsylvania Paper: Isn't it Great When Wisconsin is Noticed for Innovation?

Governor Doyle's new gas tax idea is getting mentioned elsewhere, and other states are starting to consider the concept. Remember when Wisconsin used to get noticed for silly ideas like school choice and welfare reform? (OK, before we get too nostalgic, Wisconsin has a history filled more with ideas like this gas tax than ideas like school choice.)

HARRISBURG — To Gov. Ed Rendell, it could be a golden goose: a state tax on oil company profits that could not, by law, affect the price of gas at the pump.

Wisconsin Gov. Jim Doyle is floating a similar idea for tapping into an industry whose top five companies last year rang up more than $100 billion in profits.

The only problem: Tax lawyers and accountants say a tax with a pass-through prohibition would never work because the price of gas is dictated by a broad range of variables. “How are they going to know whether somebody who labels some increase in cost as transportation, or as crude, or as refining, is in fact passing on a tax? You tell me,” said Walter Hellerstein, a professor of taxation at the University of Georgia Law School in Athens.

How? First, you create a big bureaucracy to study and audit the gas companies, and then you pay a whole lot of trial lawyers to sue the gas companies. Even if they did nothing wrong, you will probably squeeze some more money out of them.

If the Crocodile finds something it likes, and if the prey is tasty, the rest of the crocodiles always seem to swarm around...

Update on April 23, 2007:

More coverage in Pennsylvania (in the Philadelphia Enquirer): http://www.philly.com/inquirer/business/20070423_Pa___Wis__ponder_state_tax_on_Big_Oil__without_fallout.html