Sunday, July 27, 2008

Indiana's Surplus; Where did it come from?

Governor Mitch Daniel’s is proud Indiana has a balanced budget. I think it is great as well, but we need some truth in government here. We have all seen the dramatic increase in the price of gas. Two years ago it was under $2 a gallon. Today it is hovering at $4 per gallon. The increase in the sales tax has aided the surplus dramatically. The sales tax going from 6% to 7% increased revenues from gasoline by 16% alone even if the price of gas had stayed below $2. But with the increase to $4 the state of Indiana has a huge windfall.

Just how much of an increase is the sate receiving? Assuming $2 a gallon gas in 2006 and $4 today the increase in gas tax revenues is 133%. The average driver with a 25 gpm is paying $76.80 more per year in just gas tax. With millions of cars on the road in Indiana, it is no wonder the state has a surplus.

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