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“Rewarding” Gas Stations to Sell Ethanol? Bad Idea

We already know ethanol burns at a lower octane than gasoline, yields lower gas mileage, is heavily subsidized by the federal government, and causes higher prices for food because it is a corn based product. For all these reasons, the consumer just isn’t buying. They don’t like the lower performance and lower gas mileage.

Now comes a bill in the State Senate to provide an incentive for gas stations to sell more ethanol! SB622 will give gas stations a minimum threshold of product to sell. Anything they sell above that will qualify them for a Michigan Business Tax Credit (subsidy) of up to 6 cents per gallon. It will come to the merchant in the form of a check.

This is wrong on so many levels, but one obvious question that has to be asked is, if the state wants to incentivize the sale of ethanol, why don’t they just repeal the 6 percent sales tax currently being imposed on the sale of gas at the pump? This would mean a reduction of 6 percent of the selling price today. In other words, at $3.00 per gallon, the price could be reduced by 18 cents!

I guess this is just too simple a solution. We would rather have the merchant collect it, then fill out the paperwork, submit it to the state, and then have them cut a check to the merchant for the refund.

Michigan is one of few states that charge a sales tax at the pump on top of federal and state fuel taxes. Its a “triple whammy” for consumers and it makes Michigan one of the highest taxed states in the country for gasoline.

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