Today The Economist published a chart about petrol prices. The point of the table was to show that, while governments around the world are currently blaming the high price of motor fuel on the high price of crude, there is another reason for price rises: Higher taxes. Since 2008, rich countries have raised petrol taxes by an average of 3.6%. In Greece, the tax increase was 14.8%. Yikes. In the United States, petrol taxes have increased by 4.2% since 2008. When combined with the reduced efficiency associated with the addition of ethanol to our gas, our per mile transportation costs keep moving upwards.
I can understand the role of taxation in curbing a behavior—burning fossil fuels—that our society has decided is morally "bad." But, I am a little worried about the effect on consumption associated with the push to make fuel cost more. The Keynesians who currently run the world can see this, right? If household consumption is going to pull us out of the Great Recession, taxing motor fuel during a time of rising crude prices is going to dampen consumer demand is it not? OK, so much for the economic theory. As a practical matter, Rural Ways is staying home more and more as motor fuel costs rise. If petrol prices reach 2008 levels, Rural Ways will be done driving: If it is not an emergency, the answer is "no."
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