Gas Prices

I drive a Toyota Prius. I am not a hippie, though. I care about the environment, but not to any extreme. My purpose for having a Prius is not to save money, either. Even at current high gas prices, it would take me years before I made up the additional price for the hybrid system on gas savings. Perhaps I will delve into my reasons for purchasing my Prius in a later post. For now, I'd like to discuss gas prices.

Paying for gas sucks. There no way around that. And paying more for gas sucks more. We do, however, need to spend some time looking at how much other Western countries are paying for gas and why. In Europe, the average cost per gallon of gas is more than double what we pay here. Why is that, you might ask? A lot has to do with taxes. In Europe, the cost of gas is made up of as much as 60% - 75% taxes. For this 60%+ tax, the Europeans enjoy one of the best transportations systems in the world. Good quality road, trains, busses, trolleys, funiculars, etc.

Now, why should we, as Americans, pay more for gas? The answer to this has two important components:

1) Using too much gas is wasteful. No matter what some people may say, we have a limited supply of oil. How much is that? No one really knows. We live in a society that requires the use of gas. I'm not saying that everyone should drive a hybrid, or everyone should walk to work (I surely don't), but I'm saying that people should start to make an effort. If you are a single, twenty-something business-person, you DO NOT need a Hummer or Denali or Escalade. That's just BEING WASTEFUL. I know you think it makes you look cool, but would you throw all your garbage out the window and shit in the street if that was cool? If everyone made the slightest effort, we could significantly reduce our dependence on oil (be it either foreign or domestic). Money is a huge motivator of people and if gas prices increase, hopefully the waste associated with the use of these vehicles will decrease. In Europe, with their $7+/gallon price, people walk more, use more public transportation, and drive smaller cars.

2) Taxes. Most state, including my home State of Texas, charge tax on gas on a cents per gallon basis. This could very well be the worst idea. Allow me to explain. By setting a price per gallon, instead of a percentage of gas price, we are reducing the value of the tax that is collected every year. Because of the system in place now, congress would have to pass a tax increase every year to keep up with inflation. That is clearly not going to happen. The effect of this system is to cause the government to use other taxes (sales/property/income/etc) to subsidies what gas tax should be paying for (road improvements, road construction, public transportation). So, in effect, to get the same bang for each tax buck, the government is needing to either raise taxes in another area or raise the national debt.
For more information on gas taxes per state, check THIS out.