Where do your gasoline dollars go? | ExxonMobil's Perspectives Blog

California has another record to be proud of. They collect $0.66 cents per gallon of gasoline - the highest tax in the United States. Taxes are even higher on diesel, which fuels commercial transportation.

There is a significant misconception about the cost of gasoline. The media and Washington D.C. would like to have you believe that it is the greedy oil companies. In truth, the average State & Federal gasoline taxes per gallan are $.48 cents on average. By contrast, Oil companies only profit $.07 per gallon (before they pay taxes on their corporate profits).

I think that the American public deserves some straight talk from our political leaders if we are going to develop good energy policy in America.

The next time you ponder our country's involvement in the politics of oil rich countries in the middle east - remember who has the most to gain by influencing the flow and pricing of oil.

Click this link to get more details.

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The DOW Now and Then

Dow Jones Industrial Average: Then 14164.5; Now 14164.5


Regular Gas Price: Then $2.75; Now $3.73


GDP Growth: Then +2.5%; Now +1.6%


Americans Unemployed (in Labor Force): Then 6.7 million; Now 13.2 million


Americans On Food Stamps: Then 26.9 million; Now 47.69 million

Size of Fed's Balance Sheet: Then $0.89 trillion; Now $3.01 trillion


US Debt as a Percentage of GDP: Then ~38%; Now 74.2%


US Deficit (LTM): Then $97 billion; Now $975.6 billion


Total US Debt Oustanding: Then $9.008 trillion; Now $16.43 trillion


US Household Debt: Then $13.5 trillion; Now 12.87 trillion


Labor Force Particpation Rate: Then 65.8%; Now 63.6%


Consumer Confidence: Then 99.5; Now 69.6


S&P Rating of the US: Then AAA; Now AA+


VIX: Then 17.5%; Now 14%


10 Year Treasury Yield: Then 4.64%; Now 1.89%


EURUSD: Then 1.4145; Now 1.3050


Gold: Then $748; Now $1583


NYSE Average LTM Volume (per day): Then 1.3 billion shares; Now 545 million shares

From Hedge Fund guy Tyler Durden

Balancing the Budget

To begin with, I feel like my blog is overly consumed by politics and economics. As the owner of two small businesses, I cannot help but to be overly conscious of these forces in America which challenge me every day in the decisions I make. Theses forces impact my family's financial future, and the future each member of my staff. Each day I gaze across a parking lot full of cars that belong to my teammates. It reminds me that our company's paid out wages make those car payments, puts gas in those cars, and feeds those families.

I am constantly burdened by the notion that 100% of the tax revenue collected by our government in taxes goes toward paying the $2.5T in Medicare, Social Security, Medicaid, and interest on our debt. These are all expenses that neither me nor my team get any benefit from. Our tax contributions are going toward funding the unpaid benefits of our forefathers. All other expenses of the federal government including military, employees, homeland security, FBI, CIA, etc equate to $1.3T. New revenue from the Fiscal Cliff deal (Expired Bush era tax cuts) will contribute $600B (Democrat number) to $650B (Republican number) to reducing the $1.3T deficit. Clearly more is needed as we are only half way home.

Taking more than you give

No matter how you look at it, Sequestration is going to hurt - and the more we delay the necessity to reduce government spending - the more it will hurt.

There is no doubt. Citizens who have been adorned with heavy handed government programs will feel the loss. Everybody will. Our economy will contract again as a result of the government spending cuts. The fed will be putting less money into the economy and the revenue of all businesses will decline. Here is the conundrum. When that happens, the secondary effect is a reduction in profits, which leads to a reduction in tax revenue, which leads to a greater deficit.

In other words, you are damned if you do, damned if you don't. 

8 years ago (3/02/05), then Fed Chairman Alan Greenspan told the House Budget Committee that the US government needed to undertake “major deficit-reducing actions.”  Greenspan said “I fear we may have already committed more physical resources to the baby-boom generation in its retirement years than our economy has the capacity to deliver” (source: Federal Reserve). 

MORE COMING OUT THAN GOING IN – An average high income American couple that retired in 2010 will pay $156,000 of lifetime Medicare taxes but receive $387,000 of Medicare benefits, i.e., for every $1 paid in taxes, the couple will receive $2.48 in benefits (source: Urban Institute).

Lois Capps votes to Raise Pay for Government Workers

Lois Capps is a Democrat that represents California District 24, and she is our representative in the House of Representatives. She does not appear to be aware that we are in a recession, and that our government spending is out of control. She voted to raise her pay, and the pay of all federal workers, adding $10B to the deficit. How could she be so clueless to the issues that face our nation.

On December 27, 2013, the President issued Executive Order #13635 that provides an across the board pay adjustment  for federal civilian employees.  The executive order was issued in anticipation of the expiration of the current freeze contained in H.J.Res. 117, the Continuing Appropriations Act, 2013, which will expire on March 27, 2013.^[i   Because of the way federal pay adjustments are calculated, the executive order triggered an automatic pay adjustment for Members of Congress in addition to federal employees and officials.^[ii]  In response to its scheduled pay adjustment, Congress continued its freeze at 2009 levels through FY 2013 in H.R. 8, the American Taxpayer Relief Act of 2012. ^[iii]

Over the last decade, the average federal civilian salary has increased by 62 percent – from $51,518 to $83,679.^[iv]  At the same time, the average private sector salary reached $51,986 in 2010.^[v]   When benefits are factored in, total compensation packages for federal employees top $126,141 compared to $62,757 in the private sector.^[vi]  The President’s announcement, which will cost taxpayers more than $10 billion over ten years, comes at a time when automatic spending cuts are scheduled to go into effect on March 1, 2013.  It is also worth noting that the President is expected to include a 1.0 percent pay adjustment in his FY 2014 budget and union leaders have called on the President to increase that percentage.^[vii]

Barbara Boxer cares more about Pakistan than California

S. 120: Malala Yousafzai Scholarship Act

Senator Boxer introduced a bill today to provide scholarships to Pakistani women to get access to education in Pakistan. Boxer requests the authorization of $400,000 for the fiscal year of 2013 and $400,000 for the fiscal year of 2014. $400,000 for the fiscal year of 2015, and $400,000 for the fiscal year of 2016.

I looked at the bill carefully. There is significant evidence that indicates that these Pakistani women are in serious need of education and that the education will improve the lives of the women in the program. But I would add, where should our tax dollars really go? To improve the lives of women in Pakistan or to improve schools here in California, where the children of American tax payers have the same needs as the women of Pakistan.

If you are a Californian, please read this bill summary. You need to really dig into the actions of your elected officials so you can make the most informed decision about who you send to the Senate.

http://www.govtrack.us/congress/bills/113/s120/text?utm_campaign=govtrack_email_update&utm_source=govtrack/email_update&utm_medium=email

Our House of Representatives Lois Capps does not think that it is important to have a balanced budget. She voted against HR 444 - To require that, if the President's fiscal year 2014 budget does not achieve balance in a fiscal year covered by such a budget, the President shall submit a supplemental unified budget by April 1st, 2013, which idnetifies a fiscal year in which balance is achieved. Here is the vote tally. You can check to see if how your House Representative voted.

Housing and Insurance are better investments than stocks

The stock market has had a bit of a run. Not bad considering that our economy is riddled with woe. Our elected officials do not seem to be able to get along and pass policy that will help us financially heal.

p.s. - I blame both political groups equally.

Now, there is a new tax that imposes a 3.5% tax surcharge on earnings from passive income like stock trades or dividends. As of January 1st, the Medicare Surtax, part of the Health Care and Education Reconciliation Act of 2010, went into effect. This act was not effected by the "fiscal cliff" tax legislation passed at the beginning of the year.

I find these things very perplexing. When I ask people if they are aware of these new taxes, everyone says "no!" Frankly, I would be in the same boat if I did not have an elite financial advisor - and pay attention to what he sends me. Fortunately, I became a client of his before he became a big deal in his industry. Otherwise, I would need to place a minimum of $5 Million under his management to get his level of services today. In other words - he would not take me as a client.

The perplexing bit is that families with old money, the newly wealthy, and super wealthy have access to financial and tax information consulting that the middle class does not. With the same tongue, our government talks about preserving and building a strong middle class in America while undermining the middle class with a tax code that is too complex to navigate without professional help. The type of professional help that the middle class cannot afford.

As many of you know, my career is focused on real estate, and real estate technology. By comparison to any financial investment category, housing is HOT! Prices are rising as much as 5% per month in some areas. Hedge funds like Carrington are buying homes in bulk from banks. They do not care if the homes do not sell because there is such a glut of rental properties available. Rents are rising in every metropolitan area. 50% of consumers took a credit hit over the past 5 years, so it will be awhile before they have the credit score and the money down to buy back into the housing market. The run should last awhile.

Don't leave your cash in the bank. CDs and other secured investments are not paying enough interest, barely hedging inflation.

Insurance may be a good buy right now. You avoid many of the tax implications of the stock market. The interest and growth rates are higher than bank rates. By the way - if you have enough money - buy insurance for your kids and other family members. It is a great way to pass along a financial legacy.

Anyway, as the old saying goes. The rich get richer and the poor get poorer. Don't believe the political rhetoric. They talk a good game, but undermine you with the tax code.

Here is another fun fact - historically, stock values double every 7 years. This has not happened during our investment life - (graduated college in 1989). Rather, our county's debt has doubled less than every 7 years.  Today, our per capita debt is $53,000 for every US citizen and child. When I was born in 1967, it was $1640.  The debt rate doubled between 1966 and 1977. Then again by 1984 (6.75 years). Then again by 1990 (6.25 years)..... you get the picture, right?

Alexandra Sparkles Lund releases demo reel

You may know that our daughter  Alexandra has a dance name of Sparkles....Thanks to the naming excellence of Tahirih Ellison, choreographer. Sparkles has been dancing since she was 4, and was invited onto the competition team at DPAC 2011. Dellos Performing Arts Center is the premier dance studio on the central coast of California and is recognized among the top studios in America.

2011 was an amazing year for us as a family. We watched in awe as our daughter took the stage in Journey of Faith, a production dance that chronicled the story of a girl as she emerged from innocence into adolescence. Alexandra played the girl as a child in the beginning of the piece. In so many ways, it was the beginning of our journey in real life.

For the 2012 season, we agreed to let Sparkles do a solo. It is a big step for an 8 year old. But she took that step with vigor, going undefeated in all competitions and being awarded Icon Dancer of the Year - National Champion! If you have not seen her solo, Watcha Want - check it out. The recognition led to her signing with The Movement Talent Agency in Los Angeles. Much love goes out to all of the coaches and choreographers and other dancers that inspire her every day - marco - mama T - Jill - Jordan - Trev - Juju - Fuego - Mocha - Miss J - the prop dads, and so many others that it would be insane to name.

She is off to a great start in the 2013 season, winning the Hollywood Connection competition in her age group in the Northern California Regional with her new solo, Watcha Need. It is crazy good. We are uber proud.

Yesterday, we had to put a dance reel together for her agent. It took 6 hours to pick the music, clips, pull video, source images, mix it all together, render it, and publish it to youtube. Alas, its done. Please check it out.