Ethanol is in our fuel for only one reason...tax breaks. The state sales tax is reduced by 20% and the federal motor fuel tax is reduced by 5.4 cents per gallon. The 20% reduction in sales taxes applies to all sales taxes, state, city, and county. This means that the ethanol subsidy is fed by the state and also by any city or county collecting sales tax on gasoline. We suspect that cities and counties have no idea that this subsidy impacts their tax collections. See our links to several web sites with lengthy but good discussions regarding ethanol. It should make any tax payer very angry as this is politics at its worst. We just finished our sales tax return for May 2000. The combined breaks federal and state reduced the tax collections by over $10,000 for May 2000. This was offset by the increased price of ethanol. The government gets less money. Ethanol producers and oil companies pick up the tax savings. Consumers lose two ways because 10% ethanol in gasoline reduces mileage by about 3% and they are footing the tax bill for this subsidy. Politicians win by giving us the false hope that ethanol is a viable alternative fuel.
below and check out our flow chart describing the process of getting ethanol in your tank. You can arrive at your own conclusion regarding the claims that ethanol is a viable form of alterative energy Download this pdf
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