Skip to comments.The Real Gas Price Gouger (Imagine you had to spend50c in taxes for every $1 you spent on groceries)
Posted on 03/16/2006 1:38:18 AM PST by nickcarraway
When gas prices jump by 50 cents (or more) per gallon, many people get angry at "Big Oil" -- and decry what they consider "price gouging" at their expense. But how come no one gets upset about the 50-70 cents (or more) per gallon in taxes imposed by government?
Federal (18.4 cents per gallon), state (35-50 cents per gallon), and local motor fuels taxes (anywhere from 5-10 cents or more per gallon) account for at least one-third of the per-gallon cost of gasoline -- an outrageous levy in both absolute terms and as a percentage of the purchase price of the item being taxed. Imagine, for instance, if you had to fork over 50 cents in taxes for every $1 or so of groceries you purchased.
And gasoline is no less an "essential" than food for most people.
These taxes are also viciously regressive -- that is, they take more as a percentage of disposal income from the least able to pay. After all, most of us have no choice about driving, regardless of our income. People in areas outside of major cities (where there is no public transport system) especially. The "rich" (a frequent whipping boy of class warfare types) may be able to afford the exactions without it affecting their day to day lives. But what of the person of modest means?
Let's assume a gas tax (all levels) of 50 cents per gallon. (A lowball figure, by the way; in some states, e.g. Connecticut and New York, combined motor fuels taxes imposed by all levels of government can push $1 per gallon or even more.) A purchase of 15 gallons of fuel (the amount it takes to fill the typical new car's tank) would entail $7.50 in taxes alone. Most people burn a tank of fuel per week (at least), so that means $30 per month down the rathole, just for gas taxes -- or $360 per year.
How many people do you know who can afford to lose nearly $400 annually without it affecting their budgets?
The gas tax alone pretty much vitiates the Bush tax cuts all by itself -- and generates in excess of $50 billion annually in "revenue" for our friends in government.
And yet, they (our friends in government) hunger for even more.
Since 1997, 14 state legislatures have voted to raise their state gas taxes a total of 17 times; these increases ranged from 1 cent per gallon in North Dakota to 6 cents a gallon in Ohio. Many local (county/city) governments around the country tack on "inspection fees" and other nit-picky taxes -- including a "seawall tax" in Mississippi and a "special petroleum tax" in Tennessee. (Click here for more details.)
There is talk of adding a nickel (or more) to the federal gas tax, too. Some lawmakers want another 50 cents per gallon (or even more than that).
And yet, no one complains much about this endless, brazen highway robbery -- which comes after, let us not forget, federal and state income taxes which together snatch anywhere from 15-40 cents of every dollar we earn right off the bat. So with the change left over, we're compelled to pay yet again -- and then again. And at confiscatory rates, too.
Of course, we're supposed to be calmed by the rationale that all this money being extracted from us is used for the upkeep and expansion of our transportation infrastructure -- building new roads and maintaining existing ones. But our roads are in disrepair and increasingly over-crowded. Our money doesn't seem to be going very far. (Or perhaps it is merely going into the pockets of well-connected no-bid contractors?) At least part of that $50 billion extraction is diverted into "safety" programs -- whatever that means.
Regardless, there's little outrage, despite huge costs imposed with increasingly budgetel-looking results. Meanwhile, most of us are also paying those extortionate federal and state and local (and property and sales and annual decal and countless other) taxes... for, what exactly?
It's something to think about the next time prices rise -- and the Greek chorus begins anew about the supposed depredations of a chimera called "Big Oil."
Eric Peters is an automotive columnist and author of Automotive Atrocities: Cars We Love to Hate (MBI).
Get a smaller car, get a smaller house closer to work.
I was wondering when someone was going to bring this up.
Ok, I'm sort of with you on the gas usage (SUV) thing. I agree that you probably shouldn't complain if have the choice to buy a more efficient vehicle but instead you drive the ford excursion. Even then, some folks are worried about the safety of children and desire a 'tank'.
I don't think living further from work is the same argument. I can't afford to live close to work. I live 25 miles away and I drive and hour each way, at least.
Many people live further from work for the same reason they don't drive an inefficient vehicle, they can't afford that vehicle to begin with, or afford to live closer. In this area, and I'm guessing many others, the housing is more expensive the closer you get to the jobs. Location, location...you know. Those with less cash, must drive the furthest.
Not that I'm complaining about gas. I drive a 95 civic and I often carpool. I think carpooling is a pain in the butt,and it's not easy to schedule if you have kids to pick up, but it really saves a lot of money and stress. my .02
I still remember laughing at one lady who was holding a bottle of Evian, filling a 50,000 SUV and bitching about gas prices. I asked her if she liked the $7.00/gallon water better.
My point is that I meet people who complain about higher fuel costs and tell me that they commute 40 miles because they wanted a bigger house on a larger lot. This has happened on more than one occasion. Granted, I once commuted 55 miles when I got my first job (lived at my parents house at the time), but I got a little apartment close to work after three months of misery.
There are some cases where long commutes may be necessary. In many cases, however, the guy/gal whining about high fuel prices and his/her long commute should have thought about such factors first before falling in love with the idea of a "large house on a big lot."
BWAHAAA! Or the woman in South Florida who bitched to me at the car wash about the high cost of gas when she was wearing thousand-dollar Manolo Blahnik shoes and enough REAL jewelry to make Sammy Davis jealous.
Folks that "complain" about the price of gas sold their VLO too early....
Americans that complain about the cost of gas would get a real dose if they came to Europe.
Gas here is an average of $6.00 per gallon, and in the UK, can run up to $8.00. Most of the cost is in taxes.
It is the reason that most people have small cars, and do not drive great distances, as in the US.
IF gas taxes were used strictly for infrastructure maintenance and improvement, I would have no problem with it. It works out like a user fee and is probably the best way to apportion the cost of road maintenance.
If it were paid for from general funds, the burden would not be placed fairly, wherein drivers of smaller more efficient vehicles would pay as much as operators of over the road haulers.
Ill say... its split and its still like 55$ or so. If I was in on that action, I wouldbe smiling all the way to the bank, and never mind what ti cost me to get there.
Theres little outrage because the money is taken away in small parcels.
"How many people do you know who can afford to lose nearly $400 annually without it affecting their budgets? "
That comes to about 34$ a month. I can see A LOT of people not even noticing it.
While I don't disagree, how much of what we are paying now versus a year ago is taxes?We know when our elected reps increase the tax and that has not been a part of the increase over the past year.More sales tax, yes, since it is a percentage of the per gallon cost, but, other than that where I live the last year of increases is going somewhere else.
If she saw the markup on retail jewelry she'd have a cartwheeling fit! (unless she was in the business, of course, then it would be a 'reasonable profit')
I sense that you may be on the younger side of an average lifetime.
"If I see one more person complain about "high oil prices" when they drive an SUV or commute more than 15 miles to work, I'm going to go postal on their a-s.
Get a smaller car, get a smaller house closer to work."
HEY!! I do drive a small car and a "smaller" house close to work would cost most people twice as much as their larger house since work is in the cities. I know that a small house near where I work would be 3 times the cost of my house ... plus should people move every time they change jobs?
Please ... the Feds/States are sticking it to us in the kiester big time and no one complains too much ... the guy is right.
I bet you these same "poor" people spend twice that amount in lottery tickets :o)
Thanks for your input. I'm very glad you are not in charge today.
Both oil and government are gouging the consumers.
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