Comments on: U.S. versus European Gas Prices

By: How Much do US Citizens Pay in Taxes per Dollar of Income? | Babeled

How Much do US Citizens Pay in Taxes per Dollar of Income? | Babeled — Thu, 23 Apr 2009 01:50:17 +0000

[...] a slightly higher figure than you might think, but consider that the main excise tax is levied on gasoline. The eleven percent tax on a product that is a massive part of the American economy and way of [...]

By: Jack Gamble - Man Overboard

Jack Gamble - Man Overboard — Sun, 28 Dec 2008 20:00:35 +0000

David,

All excellent points. One thing I will add to your last comment:

Althouh taking a tax off might be a flawed justification of anger over higher prices, it is NEVER a bad idea to lower taxes. Every ounce of economic data I have ever seen argues that lower taxes is better for the economy. The government is the most poorly operated organization in the world and the less money they have to squander the better.

By: David

David — Fri, 26 Dec 2008 14:02:52 +0000

Basic economics would tell you that this isn’t as simple as you are making out. Pricing decisions are different under different tax levels, since the equilibriums shift due to changes in the price level that the market can bear (elasticity of demand). Therefore under a higher tax schedule it may well be profit maximising behaviour to price lower in order to lessen the incidence of the tax burden on consumers.

Nevertheless, the US can’t realistically be described as paying more for petrol than Europe. Aggregate demand is most strongly influenced by the final price to the consumer and therefore it is this price which is the most important.

Furthermore, the US government has made a conscious decision not to tax petrol very much for the reasons that a) the country is so heavily dependent on oil and b) it would be a political nightmare for any administration raising petrol prices.

Taking tax off is a flawed method of justifying anger at “high” prices.

By: Fuel Economy: A Guide On Buying the Most Fuel Efficient Vehicle » Babeled

Fuel Economy: A Guide On Buying the Most Fuel Efficient Vehicle » Babeled — Mon, 28 Jul 2008 23:47:04 +0000

[...] rising cost of gasoline at the pumps has caused many people to rethink their spending habits and forced them to consider [...]

By: Andrew Blanco

Andrew Blanco — Sat, 26 Jul 2008 19:04:51 +0000

Uncle,
You can’t learn morality until you make an immoral mistake.

The above plan, however perfect sounding, is unrealistic. There is just still way too much money to be made off of the current oil-driven infrastructure. That doesn’t justify our means of securing a piece of the pie (war, etc.), but it certainly explains our behavior.

Renewable energy won’t be put in place until oil runs out and profits run dry. That’s capitalism, no?

By: Uncle B

Uncle B — Sat, 26 Jul 2008 18:33:12 +0000

If the U.S. had chosen to be a moral people, and leaving Iraqi oil alone, and following Al Gore, decided to develop the South Western deserts, with the technology of the times, solar/thermal-molten sodium – electricity installations, for the same amount of money as that war cost, today, we would be tapping into the largest, renewable, sustainable, energy source the world has ever known. It would have paid every energy bill in the U.S.A. for maintenance fees only – FOREVER! It would be equal to an oil field that can NEVER run dry! Low cost electric power, and hydrogen gas for all!
After the millions of murders, and 650 billions of dollars, borrowed from our children’s futures and pissed away, with thousands of our own and others maimed and disfigured for life, millions of families utterly destroyed, ours and theirs, we are no closer to Iraqi oil production than the Iraqis are!
The next time you hear a blithering idiot spoiled brat, drunken, drug addicted, sociopath, rich Arabic saber dancing daddie’s boy, stand at a microphone and threaten YOUR safety with someone ELSE’S weapons, remember what you lost America, remember, and weep!

By: Jason Morgan

Jason Morgan — Wed, 23 Jul 2008 12:28:58 +0000

Thanks, Richard – good summation. The one thing I will say is that I believe offshore drilling can assist in a long-term increase in the value of the dollar. As the new wells become operational, the U.S. could import less foreign oil thereby reducing the trade deficit. The increase in infrastructure during construction of the offshore rigs will also provide an economic boost, increasing the dollar’s strength in the short term as well.

By: Richard

Richard — Wed, 23 Jul 2008 06:23:09 +0000

Regardless of what any other countyr pays for a gallon or liter of gasoline the bottom line according to the above article ,which is very accurate according to prices and taxes, is that the only way to see an immediate drop in the price of gasoline for americans is to raise the value of the ameerican dollar. Offshore drilling, hybrid cars or other alternative energy sources may give some relief in the future but the only immediate action I see is to increase the value of the dollar.

By: Barrie

Barrie — Tue, 22 Jul 2008 00:07:46 +0000

Hi,

I am from Australia where we are currently arguing over a tax of $1.13 per l. I just found this article when looking for a comparison of fuel taxes and prices in the US vs. Europe. The idea that Government regulation and fuel taxes are a bad idea is true only if we know that a) gasoline from petroleum will be available for ever at cheap prices and b) there are no impacts from using it that will effect the lives of future generations. The impacts of rising CO2 levels on the worlds climate, and the harmful effects on biodiversity and our ability to grow food are now almost beyond dispute. Furthermore, there is growing acceptance that we have only between 5 and 25 years before world oil production peaks, after which prices will skyrocket to perhaps 5 or 10 times their current levels. Increasing fuel taxes now, is the only way to wean people of petroleum in controlled manner before the oil shock rteally hits and to reduce our CO2 emissions from transportation. Sure a fuel tax will hurt, but the impact of a sudden, irreversible spike in prices due to supply declining while demand continues ot increase will devestate the economy and civilsation as we know it. We are already seeing the impacts of continuing to build inefficent gas-guzzling cars and trucks on our car industries. The problem could be though if we have already hit peak oil!

By: Breaking Down Taxes on Oil and Gasoline » Babeled

Breaking Down Taxes on Oil and Gasoline » Babeled — Wed, 25 Jun 2008 02:31:41 +0000

[...] was an excellent comment left by Ken Bouley a while back when I babeled on the difference between U.S. and European gas prices that got me [...]