Beware: What John McCain Wants to Give Back, Jim Doyle Will Try to Take Away

Presidential candidate John McCain proposed, in a speech at Carnegie Mellon University this morning, that the federal government help to stimulate the economy by not collecting gasoline taxes from Memorial Day to Labor Day. The federal gas tax is 18.4 cents per gallon (24.4 cents per gallon of diesel). A good idea.

But beware. Considering the state's budget shortfall, and Jim Doyle's penchant for raising gas taxes, it would come as no surprise if Doyle or his friends in the Senate push to increase the state's gas tax by the amount of the savings. After all, the result would be a no net loss to Wisconsin consumers. It would, however, push Wisconsin from the 8th highest taxing state when it comes to gas taxes to the highest.

McCain's Senate colleagues should ensure that any such legislation offered in the Senate contains a provision that the gas tax moratorium would not apply in any state that raises its own gas tax in the year of the moratorium. McCain's proposal is intended as an economic stimulus, not a federal revenue sharing program.

Wasserman and the Budget: Does Milwaukee Have any Real Journalists?

Rep. Sheldon Wasserman (D-Milwaukee) voted with his Democrat colleagues against the Republican Assembly budget package. No surprise there.

But, Wasserman is one of only two Assembly Democrats to sign the Americans for Tax Reform pledge against raising taxes. The other, Rep. Bob Ziegelbauer (D-Manitowoc), has at least publicly spoken about why he voted against the bill, and he has a track record of bucking the Democrats on some budgetary issues. I suspect, at the end of the day, Ziegelbauer's budget votes will be more more closely in accord with he Assembly budget than the Senate's or Governor's budget proposals.

So, what is Wasserman's reason for voting against a no-tax-increase budget? What would have needed to change for him to have voted for the Assembly budget bill? No one knows. It does not appear anyone has asked him.

Funny, because Wasserman plans to embark on one of the most expensive, or the most expensive, State Senate races in Wisconsin history. Doesn't anyone want to know his position?

Does Milwaukee have any real journalists?

The Truth Behind Wisconsin's Oil Company Tax: Why You'll Pay More at the Pump

As we know, Governor Doyle has proposed a tax on "big oil." The legislation would prohibit the oil companies from passing the tax on to consumers. It does not work.

You knew it. I knew it. People in other parts of the country knew it (and wrote about it). Everyone with a brain knew it.

So did the Governor (but, as is his habit, he told us differently).

From a January 30, 2007 memo delivered to the Governor's office that was prepared by Governor Doyle's own Department of Revenue:

Arbitrary Nature of Audits
Sec. 77.9982(4) provides that no supplier shall take any action to increase or influence the selling price of motor vehicle fuel in order to recover the amount of the assessment. A supplier could argue that any number of factors other than oil company assessment were the cause of a price increase. Prices are determined by a complex, interdependent set of economic factors. The Department's auditors may have no rational basis to isolate the cause of a price increase as the oil company assessment. The supplier may recover the assessment from purchasers by a gradual increase in the price and in some cases may not be able to bread down all the reasons why the price is increased. Therefore, actions to penalize suppliers for passing the tax through to purchasers may not be sustained.

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