Price Gouging

An excerpt from Eric Peters:

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.

Comments

[Tom]

People don't get mad at gas taxes because they understand that gas taxes are used overwhelmingly to pay for roads. People don't get mad at gas taxes because they undesrtand that without roads their cars would be pretty much useless.

Not all taxes are bad or unfair.

Also, given the market-driven nature of gasoline prices, lowering the taxes on gasoline would lower the price only temporarily. The market price would adjust upward to the point where the supply and demand curves meet, which would be right about what we're paying now because -- as the market has demonstrated -- that's what we're willing to pay.

[Howell18Wendy]

If you want to buy a car, you would have to receive the loan. Moreover, my father all the time uses a short term loan, which supposes to be the most useful.