Bill Archer: “the motion to recommit attempts to regulate the market price of motor fuels with the threat of monetary penalties for…”

“the motion to recommit attempts to regulate the market price of motor fuels with the threat of monetary penalties for failure to pass on the motor fuels tax reduction to customers. The mechanics of the motion offered by Mr. Rangel are flawed. More importantly the motion lacks a fundamental confidence in our free market system which has served us so well. Instead the motion smacks of price controls and the long-hand of gargantuan government. Even before I speak to the bad economics of this motion, let me explain why the provisions before us do not work. First, Federal taxes on gasoline are paid well before the customer pulls into the gas station. These taxes are paid at some 1,700 bulk storage terminals. From there, some 15,000 wholesale dealers or jobbers buy the product which then is delivered to retail service stations which total over 195,000 nationwide and sell nearly 200 brands of gasoline. Keeping this universe in mind, the Rangel motion would essentially make 600 taxpayers, those at the terminal facilities, pay penalties equal to all or part of the tax reduction which does not flow to customers. Very simply, the terminal taxpayers will pay dearly if even one of the nearly 210,000 wholesale dealers and gas station operators fail to pass-through the tax reduction. The motion raises basic fairness questions since taxpayers are held responsible for another person's inability to account for a tax reduction.”