Tags: fuel | costs | riots | us | gasoline | economy | stagnation

Rising Gasoline Taxes Fuel Economic Stagnation

gasoline price is getting too high, man holding nozzle to head, making pained face

George Mentz By Monday, 03 December 2018 11:43 AM EST Current | Bio | Archive

Oil and gas prices worldwide have come down over the last month.

The price of a barrel of oil has gone from $74 down to $52 per barrel this year. In contrast, gasoline prices at the pump vary greatly due to each nation’s tax rates and political regulations.

Paris is dealing with fuel riots, Reuters reports, due to increased petrol taxes to fund government jobs and activities related climate research. The chaos, mayhem and protests began as a backlash against French President Emmanuel Macron's fuel tax hikes.

The U.S. customer generally pays about 76 cents per liter of gasoline (a liter is basically one-quarter of a gallon). In contrast, a gallon of gasoline or petrol in many countries is double that amount due to high taxes and regulations.

For example, here is a list of a few countries and their local cost of gasoline per liter, according to Global Petrol Prices.com:

  1. Hong Kong: $2.08 per liter.
  2. Italy: $1.83 per liter.
  3. Germany: $1.66 per liter.
  4. Ireland: $1.66 per liter.
  5. France: $1.65 per liter which is more than double the USA.
  6. Sweden: $1.58 per liter
  7. Singapore: $1.55 per liter
  8. Canada: 95 cents per liter.
  9. U.S.: 76 cents a liter.

Taxes on fuel can be more than one-half of the cost of driving a car or heating a home in some countries and regions of the world.

To illustrate, if you fill up your car with 15 gallons of gas at $2.50 per gallon, that would total about $38. Therefore, state and other taxes may take 20percent to 40 percent of your gas money.

The U.S. federal excise tax on gasoline is 18.4 cents per gallon and 24.4 cents per gallon for diesel fuel. Also, many states have their own huge gas taxes. Pennsylvania's gas tax rate is highest at 58.7 cents per gallon, followed by California (55.22 cents per gallon) and Washington (49.4 cpg). The lowest gas tax rate is found in Alaska at 14.65 cents per gallon, followed by Missouri (17.35 cpg) and Mississippi (18.79).

So when you add your U.S. federal gas tax of 18 cents plus a Pennsylvania State tax of 0.58 cents, it equals a whopping 78 cents per gallon. You multiply that times 15 gallons per week and you have about $12 per week in taxes on individual drivers and $48 per month in gasoline tax on the hardest working folks in the U.S. The real cost of gasoline in the U.S. is about $1.22 per gallon if you strip away the federal, state and city taxes.

If you take the lower price gas in the U.S., which is about $2 per gallon accorindg to Newsweek, and subtract the typical 78 cents in taxes in states like California or Pennsylvania, you have $1.22. Keep in mind that diesel tax on a gallon can be higher than 90 cents per gallon in the U.S.

As for urban politicians, cities may continue to have unrest like they are having in Paris if they cross the line and pump taxes too high on working families. The dirty secret is that these same urban taxes are also quietly applied to your bill by state and city lawmakers.

Take a look at your taxes and fees on your: cell-phone bill, internet bill, airline tickets, electricity bill, cable-TV bill, and heating bill. On top of all of this, there are city and state sales taxes that are apply to every dollar spent.

In the end, it is the total of tax and costs that kill the worker and consumer.

If you can believe it, a worker would need to earn a massive $100 thousand dollars a year or more just to live comfortably in some U.S. cities. To live comfortably and afford the taxes in these cities, you would need to earn $123,268​ in San Francisco; $99,667 in New York City; and $90,811 in Washington, D.C., according to inc.com.

What is the key takeaway? The takeaway is that when gas prices and taxes go up, the disposable income of consumers is hit hard while the economy stagnates.

Moreover, when the Federal Reserve raises rates during the same time, the little guys are hurt even more as theses workers have no way of expensing or deducting the interest on credit and operating funds.

In the end, taxes and interest eat away at working families ability to pay for mortgages, rent, leases, homes, education, loans and just about everything else.

George Mentz JD MBA CWM Chartered Wealth Manager ® is a licensed attorney and CEO of GAFM ® global education, which is an ISO 29990 Certified professional development company operating in over 50 nations. Mentz is an award winning author and advisory board member to several companies around the world in education, charities, and crypto currency.

© 2024 Newsmax Finance. All rights reserved.

When gas prices and taxes go up, the disposable income of consumers is hit hard while the economy stagnates.
fuel, costs, riots, us, gasoline, economy, stagnation
Monday, 03 December 2018 11:43 AM
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