Much is being made about the prospects of a pending recession. Politicians, media and some business people and economist are making every effort to build a case that charges the mortgage lenders, whose credit underwriting parameters are thought to have been too lax.
In some effort to make citizens feel good, and at the same time in hopes of heading off a recession, congress has plans of sending every taxpayer a check. It also is putting in place a mechanism to reduce the number of projected foreclosures.
While these are both important and need addressing, the real culprit, the one that is doing more to hurt the economy than the genesis of any other issue, is the enormous increase in the price of oil and gasoline at the pump.
The federal government taxes every gallon of gasoline 18.4 cents. On top of that, there are state taxes on each gallon with Hawaii and California being among the highest. A gallon of regular gasoline in Dallas, without taxes, at today's price would cost $2.41 rather than $2.78.
The U.S. would have a far better opportunity to miss a deep and linger recession if the federal government would dramatically reduce the gasoline tax, states would follow their lead, and further, the prices of gasoline were federally regulated.
Everything would adjust positively: the price of oranges, cost of air travel, price of other goods and services that are someway intertwined with the price of fuel.
Here's a chart provided by the American Petroleum Institute:
Gasoline Taxes Assessed in 2002 (Source: American Petroleum Institute)
State | State | Other State | Total State | Total Federal & | |
Alabama | 16 | 5 | 21 | 39.4 |
|
Alaska | 8 |
| 8 | 26.4 |
|
Arizona | 18 | 1 | 19 | 37.4 |
|
Arkansas | 21.5 | 0.2 | 21.7 | 40.1 |
|
California | 18 | 14 | 32 | 50.4 |
|
Colorado | 22 |
| 22 | 40.4 |
|
Connecticut | 25 | 4.7 | 29.7 | 48.1 |
|
Delaware | 23 |
| 23 | 41.4 |
|
Dist. of Columbia | 20 |
| 20 | 38.4 |
|
Florida | 13.6 | 16 | 29.6 | 48 |
|
Georgia | 7.5 | 4.7 | 12.2 | 30.6 |
|
Hawaii | 16 | 19.1 | 35.1 | 53.5 |
|
Idaho | 25 |
| 25 | 43.4 |
|
Illinois | 19 | 11 | 30 | 48.4 |
|
Indiana | 15 | 3.1 | 18.1 | 36.5 |
|
Iowa | 20.1 | 1 | 21.1 | 39.5 |
|
Kansas | 23 | 1 | 24 | 42.4 |
|
Kentucky | 15 | 6.4 | 21.4 | 39.8 |
|
Louisiana | 20 |
| 20 | 38.4 |
|
Maine | 22 | 1.5 | 23.5 | 41.9 |
|
Maryland | 23.5 |
| 23.5 | 41.9 |
|
Massachusetts | 21 | 0.5 | 21.5 | 39.9 |
|
Michigan | 19 | 7.2 | 26.2 | 44.6 |
|
Minnesota | 20 |
| 20 | 38.4 |
|
Mississippi | 18 | 0.8 | 18.8 | 37.2 |
|
Missouri | 17 |
| 17 | 35.4 |
|
Montana | 27 | 0.8 | 27.8 | 46.2 |
|
Nebraska | 24.5 | 0.9 | 25.4 | 43.8 |
|
Nevada | 23 | 10.3 | 33.3 | 51.7 |
|
New Hampshire | 18 | 2.6 | 20.6 | 39 |
|
New Jersey | 10.5 | 4 | 14.5 | 32.9 |
|
New Mexico | 17 | 1 | 18 | 36.4 |
|
New York | 8 | 22.3 | 30.3 | 48.7 |
|
North Carolina | 22.1 | 0.3 | 22.4 | 40.8 |
|
North Dakota | 21 |
| 21 | 39.4 |
|
Ohio | 22 |
| 22 | 40.4 |
|
Oklahoma | 16 | 1 | 17 | 35.4 |
|
Oregon | 24 |
| 24 | 42.4 |
|
Pennsylvania | 12 | 14.7 | 26.7 | 45.1 |
|
Rhode Island | 27 | 4 | 31 | 49.4 |
|
South Carolina | 16 | 0.8 | 16.8 | 35.2 |
|
South Dakota | 22 | 2 | 24 | 42.4 |
|
Tennessee | 20 | 1.4 | 21.4 | 39.8 |
|
Texas | 20 |
| 20 | 38.4 |
|
Utah | 24.5 |
| 24.5 | 42.9 |
|
Vermont | 19 | 1 | 20 | 38.4 |
|
Virginia | 17.5 | 1.4 | 18.9 | 37.3 |
|
Washington | 23 |
| 23 | 41.4 |
|
West Virginia | 20.5 | 4.9 | 25.4 | 43.8 |
|
Wisconsin | 28.1 | 3 | 31.1 | 49.5 |
|
Wyoming | 13 | 1 | 14 | 32.4 |
|
U.S. Average | 17.9 | 5.7 | 23.6 | 42 |
|
Copyright 2008 - William S. Cherry
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RETAIN THE FAMOUSLY GENTEEL BROKERAGE SERVICES OF BILL CHERRY, REALTORS***214 503-8563***THERE'S NEVER BEEN A TEXAS HOME WE COULDN'T SELL. Visit www.billcherrybroker.com
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Bill,
Don't feel so bad....the USA actually gets a better deal on gas prices than most other countries in the world (including Canada and we're producing a lot of oil here). Check this graph out:
Bill, I would like to see the entire "oil" problem solved. We should be drilling in the straights between Cuba and Key West instead of the Chinese. We should open up more of the North Slope. We should build more refineries.
If you want to eliminate all taxes on gasoline instead of the rebate, I would be in favor of that also. You are absolutely correct that that would have an unprecedented stimulus on the economy.
Bill Roberts
Interesting graph, Miss Jo. Thanks for sending it.
Bill-
We definitely see eye to eye on this.
Bill
I am so glad you pointed this out Bill.If they would go after the costs incurred from oil and gas....consumer goods prices would also go down. They have gone through the roof!
Wow...Hawaii ranks highest there....no wonder we have to work so hard .....:)
and in Oregon - it is AGAINST THE LAW to pump your own gas - that kind of rocks in the winter
Miaa Joanie - The feds used to regulate gas prices. I frankly think that any and everything that people need and can only buy and that comes from one source should be regulated -- natural gas, electricity, telephone, petrol, etc. These guys left unattended have no conscious over their own greed.
Miss Thesa - Sounds like a good law. Keeps your hospitals from being over crowded.
Miss Sally - It's apparently pretty darned costly to live and work in Paradise.
Billycherry
Bill,
As usual, the state of AL doesn't line up with the rest of the country! I can say that... I was born in AL :)
Hey Bill, good post. The charts may be off, Georgia in recent years has added a 25 cent gas tax.
Miss Jan, Your jab is a scream. No matter how hard I tried, I couldn't get Alabama to line up with the others....Honest I couldn't.
Bill
Thanks for the update, Jim. I'm sorry you've got 25 cents more burden per gallon.
In 1962-63 I played the piano for two separate engagements at a hotel that was well-known then, the Dinkler Plaza in downtown Atlanta. It was a restaurant/cocktail lounge called the Golden Goddess and the downtown executives pack the place every day. The hotel paid very well.
Bill