Duckwizard.com

Like most Americans, I have been outraged at the merciless rise of gasoline prices. Oil companies get richer while working Americans get poorer, right? Naturally, when congress began introducing bills to grab huge chunks of oil companies’ record profits, it seemed like a good idea to me. Why should they get to gouge me?

Then I started to think about the oil companies’ shareholders. These are not just a bunch of fat cats who are pocketing your gas money. Many of them are middle-class Americans who invested smartly and are counting on the success of their mutual funds for their retirement efforts. If the government decides they can take “excess profits” from the oil companies, they are artificially turning these people’s successful investments into mediocre or poor ones, as oil futures plummet in response.

Nevertheless, the price of gasoline is hurting anyone who has to commute - which is most working Americans. What can the government do? The legalization of new drilling would ease speculation while maintaining the growth of oil stocks. But this would come at the cost of the environment - so I don’t see this as the solution. Instead, there are some existing legal measures that could be used to help solve this crisis, without the federal government “stealing” people’s investment value:

First: if the oil companies are, in fact, colluding to artificially inflate the price at the pump - as some have alleged - then they are acting illegally and should be slapped with an antitrust suit. Sure, this would hurt their stock prices - but in this case, it’s all part of the free market, and nothing unfair is taking place.

Next: full-time employees in the U.S. are forbidden from including gasoline used to commute as an itemized expense. For some braindead reason, only the self-employed (i.e. freelancers) with a “home office” are able to deduct the cost of their commute. The IRS should recognize that the purpose of deductions is that only available income is taxed. Any income that goes directly and non-optionally to maintaining employment is not available income, and it should be allowed to be deducted. This might hurt tax revenues, but since the U.S. Government is content to waste trillions in Iraq, I must conclude that they have too much money anyhow. I think this would be a pretty good measure - it doesn’t encourage commuting and polluting, but gives a break to those who must.

Of course, in a free market, the price of gasoline must have a de-facto cap. At some point, alternatives will be more cost-effective, and there will be vast amounts of money to be made in manufacturing and supplying them. Necessity is the mother of invention, and there are smart people out there figuring out how to turn unwanted turkey parts into fuel. Once there is a widely available alternative to keep the oil companies in check, gas prices won’t be a problem anymore. So hang in there. Personally, I’m cutting my commute by moving to sunny San Clemente, near my office. What a shame; I’ll have to live by the beach and bike to work. Because of gas prices.