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a long time ago the us decided to tax gas on volume rather than price. if gas is $1 a gallon, the tax is $0.25. if it's $4, the tax is still $0.25. It would be
by jfoutz 11y ago
a long time ago the us decided to tax gas on volume rather than price. if gas is $1 a gallon, the tax is $0.25. if it's $4, the tax is still $0.25. It would be difficult to impose a new gas tax, even more difficult to impose a price based tax.
I think a lot of the oddity in regulation (and taxes) is those are fights that were won. It's not exactly sane, but sometimes you have to go with what's achievable over what's right. And then hope the net effect pushes behavior in the direction you wanted.
- aembleton 11y agoYou don't want a price based tax as that amplifies the fluctuation in the oil price. A volume based tax will help to stabilise the pump price.
- patmcguire 11y agoA sneaky way would be to set them by percentage when gas was low such that it lowers taxes at the moment, but creates higher taxes on average through the typical boom/bust cycle of gas.