The commodity price for gasoline right now looks to be about 2 USD per gallon. Retail gasoline in the USA is at least a dollar more due to taxes and markup.
Subsidies may play a role as well, but the taxes in some countries are extreme by American standards. My take on it is that a fuel tax is effectively neutral if it brings in enough revenue to pay for the road system.
The fuel tax isn’t enough to cover the damage to the environment and quality of life, though. That’s why taxes are that high in many other places. Same way cigarettes are taxed to help discourage use and to help cover the increased healthcare costs it puts on everyone
Fuel, and other car-related taxes (sometimes based on horsepower or engine displacement) in most countries in Europe were much higher than in the USA long before there was widespread concern about the environmental impact of cars.
Which is why I said “environment and quality of life” - they don’t want their cities dominated by cars (making life dangerous for pedestrians) and for cars to become a requirement for living. So taxes are added to discourage (not eliminate) driving and car ownership
But also, the mess of smog from exhaust and other impacts beyond climate change have been known since the first automobiles. Concerns about the ‘environment’ is more than greenhouse gasses.
In NZ it’s roughly $2.50NZD per litre minimum, or $5.31USD per gallon. This is roughly 50% tax (it’s how we pay for roads, plus is subject to sales tax), so a bit over $2USD per gallon at the moment excluding tax.
Is it really $3 a gallon plus tax in the US right now?
I compare it to how I thought mobile phone calls in the US were super cheap, then found out people pay to receive calls, which was super weird to me. Where I live, my whole life it has never been the case that a normal residential connection would pay to receive a call, mobile or not.
Differences in how we do things make differences appear more than they are.
I don’t know if anyone can really get you that number, because the tax isn’t clearly disclosed when you buy gasoline, it’s just included in the price; the taxes also vary widely between different states/counties/maybe cities too?
Huh, the US gets another layer more confusing. Tax is included in gas prices but not in anything else? How do the arguments for not including that tax in the price stack up when gas stations are already including it?
Ok apparently Illinois has a 39c per gallon gasoline tax, another 18c in federal, and another 6% or so on state sales tax, plus any regional sales tax. It’s unclear whether the sales tax applies to the gasoline tax (in NZ it does), but let’s assume it doesn’t. Then that’s $3 - 0.39 - 0.18 = $2.43 then remove 6% tax is 2.43/106*100 = $2.29
We can probably knock a bit more off because there is probably some regional/city sales tax but it should be the right ballpark.
It does seem we pay about the same for petrol, though from what I’ve been searching up, this is wildly different across states because states have much different ways of paying for roads (e.g. Hawai’i is mostly taxed at the pump where as Alaska has big taxes on oil extraction to keep taxes for residents low, including for roading).
Any price lower than that required to compensate for all the negative externalities of both driving and using fossil fuels to do it still counts as subsidized.
A failure to set an excise tax on a product or service that offsets its externalities is not a subsidy. A lower tax rate than a competing product is arguably a subsidy.
I’m not aware of any modern societies that make a credible attempt to adjust the price of all or most goods and services to include their externalities. That sounds like a good idea in theory, but very difficult to implement in practice.
Fuel tax in the U.S. doesn’t even come close to paying for the road system. The federal fuel tax covers less than half of federal transportation spending. I don’t know about all of the states, but Wisconsin’s fuel tax covers only about 2/3 of the road spending. And, local streets get built with local property and income taxes.
The previous time I looked, which was a while ago, federal fuel tax revenue in the USA and federal highway expenditures were about equal. Since then, fuel tax revenue has fallen behind highway spending; the required increase to even it out would be modest in absolute terms - something like 15 cents per gallon. States each have their own taxes and budgets, of course.
As for the road damage each car causes, it increases (roughly) proportional to the fourth power of vehicle weight. Semi trucks and similar heavy commercial vehicles cause almost all of the traffic-induced road wear, and passenger cars contribute very little. It’s likely the fuel taxes paid for a passenger car (even a relatively large one) are several times its marginal impact on road maintenance.
What state do you live in that the road system is funded adequately? I never hear someone comment positively about the general state of road conditions.
Is it adequate if there are state maintained dirt roads? In some states, the state or county chooses not to pave all of their roads.
Is it adequately funded if they have potholes? Due to weather conditions, some states are notorious for potholes.
Is it adequately funded if the road gets washed out or carried away by flooding? California gets mudslides that take out sections of roads, other states get sinkholes or hurricanes/tornados destroying their roads
How long can one of these issues plague a road before we consider them underfunded?
My opinion is that the US has too many roads. Most roads are maintained by county or municipalities, and are funded through infinite growth model.
When a developer creates a new subdivision, they pave the roads. Once done, they usually relinquish these roads to the county/city who are responsible for maintaining the roads.
Typically maintenance is low until they require replacing. The cities and counties don’t save money or plan well for replacing these roads and rely on new tax revenue to fund replacing them.
It builds a slowly ballooning road maintenance cost that someone will have to pay. I believe someone made a video about this very fact. I don’t have the link handy
Florida, with the tourist money and gas taxes all our roads and highways are solid. The great weather year round means they can maintain and build roads all the time non stop.
The commodity price for gasoline right now looks to be about 2 USD per gallon. Retail gasoline in the USA is at least a dollar more due to taxes and markup.
Subsidies may play a role as well, but the taxes in some countries are extreme by American standards. My take on it is that a fuel tax is effectively neutral if it brings in enough revenue to pay for the road system.
The fuel tax isn’t enough to cover the damage to the environment and quality of life, though. That’s why taxes are that high in many other places. Same way cigarettes are taxed to help discourage use and to help cover the increased healthcare costs it puts on everyone
Fuel, and other car-related taxes (sometimes based on horsepower or engine displacement) in most countries in Europe were much higher than in the USA long before there was widespread concern about the environmental impact of cars.
Which is why I said “environment and quality of life” - they don’t want their cities dominated by cars (making life dangerous for pedestrians) and for cars to become a requirement for living. So taxes are added to discourage (not eliminate) driving and car ownership
But also, the mess of smog from exhaust and other impacts beyond climate change have been known since the first automobiles. Concerns about the ‘environment’ is more than greenhouse gasses.
The fuel tax in other countries primarily exists to make people use less fuel in order to save the world from global warming.
Roads aren’t the only societal cost of cars.
In NZ it’s roughly $2.50NZD per litre minimum, or $5.31USD per gallon. This is roughly 50% tax (it’s how we pay for roads, plus is subject to sales tax), so a bit over $2USD per gallon at the moment excluding tax.
Is it really $3 a gallon plus tax in the US right now?
I compare it to how I thought mobile phone calls in the US were super cheap, then found out people pay to receive calls, which was super weird to me. Where I live, my whole life it has never been the case that a normal residential connection would pay to receive a call, mobile or not.
Differences in how we do things make differences appear more than they are.
It’s $3/gal total including taxes here in Illinois right now.
I was in California last week and it was $4.50/gam total
That is about half of the fuel cost here in Sweden
Taxes throw things out because everyone does it different. What are the sans-tax prices?
I don’t know if anyone can really get you that number, because the tax isn’t clearly disclosed when you buy gasoline, it’s just included in the price; the taxes also vary widely between different states/counties/maybe cities too?
Edit: the federal tax is $0.184 per gallon
I can, Spain only has federal tax and it’s 21% for anything premium like gasoline.
1.63€ per litre with taxes.
So 6.169€ per gallon with taxes.
Or 6.29$ per gallon post tax.
Or 5.2$ per gallon without tax.
Literally more than double their price, and they complain so hard LMAO.
Huh, the US gets another layer more confusing. Tax is included in gas prices but not in anything else? How do the arguments for not including that tax in the price stack up when gas stations are already including it?
Tradition.
Gas prices are also the only retail prices that include tenths of a penny - specifically 9/10, as in all gas prices look like $x.xx9 such as $3.059
Even more annoying, the gas price really has 99/100ths tacked on, so the price is a cent more expensive because no one thinks of it.
Ie: $3/gal is really charged as $3.0099/gal
Yeah we have that here too. And 3-4x the impact because of measuring in litres not gallons.
-Stores
That’s how
Ok apparently Illinois has a 39c per gallon gasoline tax, another 18c in federal, and another 6% or so on state sales tax, plus any regional sales tax. It’s unclear whether the sales tax applies to the gasoline tax (in NZ it does), but let’s assume it doesn’t. Then that’s $3 - 0.39 - 0.18 = $2.43 then remove 6% tax is 2.43/106*100 = $2.29
We can probably knock a bit more off because there is probably some regional/city sales tax but it should be the right ballpark.
It does seem we pay about the same for petrol, though from what I’ve been searching up, this is wildly different across states because states have much different ways of paying for roads (e.g. Hawai’i is mostly taxed at the pump where as Alaska has big taxes on oil extraction to keep taxes for residents low, including for roading).
Sales tax is either included already or not charged.
The posted price is the posted price, no additional taxes on top of it.
Although they add 99/100ths to the price, so $3.00/gal is really charged at $3.0099/gal.
Of course this gets rounded up 😒
Any price lower than that required to compensate for all the negative externalities of both driving and using fossil fuels to do it still counts as subsidized.
A failure to set an excise tax on a product or service that offsets its externalities is not a subsidy. A lower tax rate than a competing product is arguably a subsidy.
I’m not aware of any modern societies that make a credible attempt to adjust the price of all or most goods and services to include their externalities. That sounds like a good idea in theory, but very difficult to implement in practice.
Fuel tax in the U.S. doesn’t even come close to paying for the road system. The federal fuel tax covers less than half of federal transportation spending. I don’t know about all of the states, but Wisconsin’s fuel tax covers only about 2/3 of the road spending. And, local streets get built with local property and income taxes.
The fuel tax doesn’t even cover the damage your car does to the road.
That’s probably not true, but hard to calculate.
The previous time I looked, which was a while ago, federal fuel tax revenue in the USA and federal highway expenditures were about equal. Since then, fuel tax revenue has fallen behind highway spending; the required increase to even it out would be modest in absolute terms - something like 15 cents per gallon. States each have their own taxes and budgets, of course.
As for the road damage each car causes, it increases (roughly) proportional to the fourth power of vehicle weight. Semi trucks and similar heavy commercial vehicles cause almost all of the traffic-induced road wear, and passenger cars contribute very little. It’s likely the fuel taxes paid for a passenger car (even a relatively large one) are several times its marginal impact on road maintenance.
What state do you live in that the road system is funded adequately? I never hear someone comment positively about the general state of road conditions.
Adequately is a difficult determination.
Is it adequate if there are state maintained dirt roads? In some states, the state or county chooses not to pave all of their roads.
Is it adequately funded if they have potholes? Due to weather conditions, some states are notorious for potholes.
Is it adequately funded if the road gets washed out or carried away by flooding? California gets mudslides that take out sections of roads, other states get sinkholes or hurricanes/tornados destroying their roads
How long can one of these issues plague a road before we consider them underfunded?
My opinion is that the US has too many roads. Most roads are maintained by county or municipalities, and are funded through infinite growth model.
When a developer creates a new subdivision, they pave the roads. Once done, they usually relinquish these roads to the county/city who are responsible for maintaining the roads.
Typically maintenance is low until they require replacing. The cities and counties don’t save money or plan well for replacing these roads and rely on new tax revenue to fund replacing them.
It builds a slowly ballooning road maintenance cost that someone will have to pay. I believe someone made a video about this very fact. I don’t have the link handy
Florida, with the tourist money and gas taxes all our roads and highways are solid. The great weather year round means they can maintain and build roads all the time non stop.