Governor Markell in a distraction to focus attention away from Charter Schools breaking all sorts of statutes, has proposed a controversial 10 cent tax increase on each gallon of gas…

If you are like me at all, and I’m sure a large number of you are, when you first heard that you probably echoed my words or something to it.  “Are you effin crazy?  We just finally got prices back down under $3.33 a gallon (the feel good mark since $10 will buy you 3 gallons which will get you 60 miles or 150 in you have a 50 mpg car…. )!!!

Seriously, how are we going to get back on our feet?

Then I saw the car in front of me swerve and I didn’t and hit the pot hole digging it out another inch… Someone’s got to fix those I said…

Light bulb.

Now I have to get an alignment….  The cheapest alignment in Delaware is $69.95…  but I know the guy.  He charges everyone else $89.95…   So I asked myself how often to I have to get an alignment?  The correct answer if I was being truthful to myself?…. every time I hit a pot hole.  How much does it cost me if I don’t get alignments?  At $150 per tire, $600 dollars.  $300 if I just do the front…

I don’t know if you have noticed but there are an awful lot of potholes that just showed up this week.  i can name locations of about 20, some of which are pretty scary.

Is it cheaper for me to  pay 10 cents a gallon I wondered instead of buying new tires?   So I turned off Rick Jensen and did the math.

At 10 cents a gallon, my cheap alignment would equal  699.5 gallons.   Meaning if I didn’t pay the tax and suffered paying alignments, I would have to  burn up 699 gallons to break even… At  gallon 700, the cost  of the alignment becomes cheaper than the tax on the gas.  And that is a cheap alignment.  The $89.95 version would cost you 899 gallons of gas.  When you burn gallon 900, no tax and the allignment becomes cheaper.

How far does 899 gallons take you?… At 20 miles per gallon, it would carry you 17,980 miles….   if you get 25 mpg, it takes you up to 22,475 miles.  That is almost 2 years of driving in a leased car…. It is almost a year of driving for a normal family car with teen age kids.

So  if you don’t pay taxes on gas at 10 cents a gallon and just pay for alignments, at mile 22,476 you break even.  How many alignments will you have over that time? Bad as roads are today, possibly 4. at 3 month intervals…   Therefore by saving 10 cents a gallon, you would be spending  the amount for 4 alignments, or $359… in 22,476 miles…   So which would you rather pay?  $89.95 or $359 each year?

So what if you buck it and skip the alignments and just buy tires when the metal pokes through?  Well,  in two days since the pothole incident, I’ve lost all the tread off the corners of my tires, or about 50,000 miles worth.  The centers are still like new so at that rate, it would probably be a month before I have to buy two new front tires, and the going rate for big tires on sale is near $150 each installed, some more, some less of course. That equals 3 alignments right there…

So what if I don’t pay 10 cents a gallon tax, and never hit a pot hole… What happens then?   Fat chance that will ever happen, but if such a miracle ever were to occur, it would have saved you  $89.95 across every 22,475 miles…..

===

Now I certainly understand the emotional side of putting ones foot down and saying no to paying 10 cents more per gallon.   if you are like me you watched gas go up after George Bush was elected, and climb, and climb, and climb, and climb, and climb, and then, when the speculators had to cover their margins, it dropped to $1.40 a gallon.  Remember that?  Today the sell-shorts are larger than the sell-longs. That means BIG money is betting on the price of oil to fall over time, not rise.  Prices will continue to be near this level for a long time.  It sort amounts to a savings for us when we fill up at the pump.  A weeks driving at $4.00 cost us $100.  Now it costs us $83.25…  We have $16.75 to spend on other things,  Like 5.67th Rita Water Ices….which honestly, we wouldn’t have bought if gas was $4.00 a gallon….

I understand the emotional backlash.

It’s like being frustrated and behind, frustrated and behind, frustrated and behind, and finally there is an opening, a break going our way, and someone is trying to scoop that up away from us… How dare they!..Makes perfect sense….. that is on an emotional level….

But, what if you had a leaky roof?

Would you, when money finally came into your possession after a long drought, say, well we need to have some fun, lets blow it, whoopee?

Maybe… but if you had a roof that dripped, and could never have afforded the cost of a patch or replacement, and fatalistically accepted your plight in life with buckets mapped out in precise arrangements every time precipitation was announced,  would that change your calculations?  Would it make sense to first use that first extra money coming in, to fix that roof now, instead of letting it go, increasing its future repair cost with each month it goes unfixed?  Wouldn’t it be wise to put off going to the beach and use more extra money, instead of going now on the little bit you have, and having the roof cost more later?

That is where we are with this 10 cents a gallon controversy.  We want to spend our money at the beach this summer, and let the roof go.  But we should fix the roof first, and we all know it…  we just don’t want to do it…..

Politics aside, this is just a smart decision.  Putting a tiny bit aside now from everyone, to prevent a huge cost later in the future.  If you look at the costs of doing nothing, this 10 cents a gallon saves us money…. It really doesn’t hurt us; it really does help us save beaucoup de dollars…

Between last Thursday night and last Friday morning, the price of gas jumped 12 cents. from $3.27 up to $3.39.   Has anyone complained vociferously?  Have you heard anyone complain vociferously?  Have you seen any news media outlets running stories on the corporate price hike that was 20% HIGHER than the proposed gas tax increase?…. No.

Because it really isn’t that big of a deal.  Compare that to how many people you tell when you buy tires and get the sticker shock!  Because that is a big deal…

There are 1 million people in Delaware.  But 70 times that, 70 million come into Delaware every summer to visit our beaches…  Mathematically that  means the gas tax will be paid by 1 million Delawareans for 52 weeks a year and 70 million for one week a year while they are here on vacation.  So if we use 50 gallons of gas per week, per person (imagine little babies driving cars, lol)  that $5 of extra tax would be generate from Delaware’s citizenry, ($5.00 X i million X 52 weeks per year) or  $260 million each year, and from the visitors, ($5.00 X 70 million X 1 week)  or $350 million would be added to our coffers.  So the total  would be $260 of which came from us, and $350 which comes from our visitors.

Delaware then gets a benefit of $610 million dollars while coughing up $260 million… which as we said above, really doesn’t hurt us at all on an individual scale.  So if people were cars, we’d have $610 million.  But, the ratios opf in-state and out-of-state automobiles remain the same, since the allotment of vehicles is similarly proportioned to the amount of people.  Just with Motor Vehicle data I didn’t bother to look for, we can make a very close calculation in dollar figures which should closely mirror the  42% of the total received revenue that Delawareans would actually pay…..

It is very rare when one finds a tax where it costs one less to pay, than not to pay….  This one is…

Advertisements