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Letter: Stamford Rep. Explains Gas Prices

STAMFORD, Conn. — The following letter from Michael Molgano, a Republican state representative from Stamford, explains how state and federal taxes on gas have caused prices to go up. The Daily Stamford accepts letters from all of our readers. To submit a letter to the editor, email reporter Anthony Buzzeo at tbuzzeo@TheDailyStamford.com .

Connecticut currently has the highest prices on gasoline in the Northeast. But the blame for the all the pain at the pump is not just from fluctuations in the market or tensions in the Middle East. Our state’s citizens are paying the highest price for gas simply because of the combined state and federal taxes.

This state imposes two taxes on gasoline: a state excise tax and a tax called the gross receipts tax.

The state’s excise tax holds at a flat rate of 25 cents per gallon. While that price seems high, overall the tax stays relatively even with the surrounding states.

What actually hurts our state’s commuters the most is the state’s illusive gross receipts tax - a 7.53 percent rate on the gross earnings of the first sale of specific petroleum products within Connecticut.

Connecticut’s gross receipts tax is collected at the wholesale level. The gasoline retailers who purchase the fuel from wholesalers ultimately pass the cost of the gross receipts tax they pay onto consumers.

While the excise tax stays at 25 cents per gallon, the amount collected from the gross receipts tax grows exponentially, almost doubling the amount paid at the pump.

In simpler terms, as the price of gasoline increases, so does the tax.

As of the end of January, Connecticut taxpayers were paying an average of $3.68 per gallon, according to AAA. The price includes the state’s 25 cents per gallon gas tax and roughly another 22 cents per gallon with the gross receipts tax.

Along with all of the rumors circulating about the cost of gas getting ready to skyrocket, the gross receipts tax rate is also currently scheduled to increase from 7.53 percent to 8.1 percent in 2013, adding insult to injury.

There is no debating that the further rise of the price of gasoline in Connecticut will negatively affect every aspect of living and doing business in Connecticut.

In the end, higher gas prices mean less fuel in your tank and less cash in your wallet. And while you suffer at the pump, Connecticut brings in more and more revenue.

After a long, unsuccessful fight to end the tax all together, Republican legislators have fought ruthlessly to do what they can toward capping the gross receipts tax in effort to help businesses and families who are currently struggling. It’s unfortunate that the majority party in the legislature seemed to share a different view on the issue.

How can we expect to bring back any type of economic recovery when the price of gas will keep hitting our citizens and business owners harder and harder?

My fellow Republican legislators in the General Assembly will continue to fight for the commuters who have been struggling to fill their tanks day after day. It’s time for my colleagues on the other side of aisle to re-evaluate their position on this hidden tax scheme. The real road back to economic development involves putting more money in the hands of our state’s taxpayers rather than finding more ways to take it out.

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