 |
| Source HERE |
Thank you for visiting my blog. I post things I think will be of interest to high school students and teachers of economics/government/civics etc. Please leave a comment if what you find here has been useful to you. THANK YOU!
Friday, October 22, 2010
Gas prices getting you down? It could be worse---imagine filling your Hummer in Paris or Rome. And I don't mean those cities in Texas...
US gasoline prices relative to European gasoline prices. Big difference, eh? What accounts for a majority of the difference? Gas taxes across Europe are MUCH higher than the US. In Texas the state tax per gallon a is $.20 and the Federal tax per gallon is $.194 (19.4 cents) for a total of $.39.4 cents assessed on each gallon you purchase. Gas taxes in Europe range between $5.00 and $7.00. The ACTUAL price per gallon is about the same, but taxes create the chasm. Why do European countries assess such high taxes on gasoline? Extra credit on the next test for good responses...
trgwertger
Subscribe to:
Post Comments (Atom)
European countries that assess such high taxes on gas may have many reasons for doing so. However, many of these are not very good reasons and are not thought out. They may put taxes so high in order to try and keep the country from going into bankruptcy. They may be raising taxes to try and get more people to use the superior European public transit systems. Then there are some people that say that the European governments are raising taxes in order to lessen the demand for gas and at the same time bring down the wholesale price of the money hungry oil companies. If this is the case then either the person making the statement or the government needs to rethink this plan. This is another cases of Bastiat's good economist versus a bad economist. You may lower demand and at the same time lower wholesale prices, but is that really a good thing for your country long term? This may take money away from the oil company, but then all of the middle men that haves jobs in your country suddenly go out of business. The sales reps, the gas station owners, and everyone else in your country that you don't think about. So in the long run you might take money from oil companies, but at the same time are costing yourself thousands of jobs and putting a further strain on a already suffering economy. So there are many reasons why Europeans might have such high taxes on their gas, but the question is, are they good reasons?
ReplyDelete