Gasoline taxes hurt middle income and lower income people hardest.

That's a nice analysis. Really spells out the problem on the back of an envelope.

Interesting post. I wonder if anyone has any figures on the shakeout from the 73 oil crisis?

For instance locally (Seattle area) our construction workers typically commute an hour or two per day in big trucks. Their standard of living must be under strain now, so I suspect an oil shock would send them under in droves. Of course, we're overbuilt from the frenzy of the last few years anyway.

Many of the folks hardest hit are redstate suburban churchgoers. If the Rapture doesn't happen soon those folks are going to feel betrayed.

Gasoline taxes hurt middle income and lower income people hardest.

Not in cities with good public transportation.

Just sayin'...

That is why a gasoline tax is a non-starter. The people who would be the most affected can't front the money a gas tax would cost them while they wait for the rebate checks to come in. Even if it was monthly, which would cause a huge increase in the administrative costs. I just don't see a way to square those.

Amazing the attempt to turn the topic to gasoline taxes. If you do away with gasoline taxes you are going to have to pay for road repair with some other form of tax. Any ideas?

If you remember Clinton's first tax legislation, the Western states were the biggest stumbling block in the Senate on the gas tax. If you have to drive more than 100 miles to the nearest supermarket you really don't like to see the price of gas increase. So there's some potential here to help take back the Senate.

It may be misleading to look at these averages if rich people, who like toys (big SUV's), use a lot more gas. To take an exaggerated case, suppose rich people used 99% of all the gas used, then it makes no sense to divide total gas consumption equally across all people.

You probably want to see the curve of gas consumption vs. income, if there is a clear bump or correlation then you want to work from that as a starting point rather than the overall averages.

But even still it does sound like this is likely a pretty big chunk of people's money.

I am talking about the extreme gasoline tax of $1 to $2 or more that has been discussed at least a few times on this blog and others. It should be obvious from the context that I am talking about new taxes, not existing ones, and ones where there would be a progressive rebate for low to mid-income families (as discussed previously).

The problem is that even though the government is collecting the taxes, they have the money funneled away from where I live, so the roads here don't get fixed anyway. It's like everything else, why pay to keep something up when they can put it off until they need to totally rebuild the road? I know it's not supposed to work that way, but we are talking about the government here.

I remember during the last election, I talked to a lot of very poor people in rural NC. All of them said that they wanted someone to get elected who would do something about gas prices. I was really surprised, since this wasn't on the radar at all for the media, but EVERYONE I talked to with a low income was saying that.

Brilliant.

The modern industrial states have the infrastruture to use energy more efficiently than the developing countries. Those Price rises hit Africa and parts of Asia the hardest.

I have been looking for data on the amount of GDP we can produce per unit energy. Someone quoted a timeline on this statistic, and I would be interested in a link.

"...that whole Iraq business didn't work out quite the way it was supposed to." Kevin Drum

I've been out of the loop lately, and I'm wondering how much play and credence was given to Greg Palast's column a week or ago contending that everything has worked out just as planned: chaos in the Middle East to drive oil prices up, to a bit simplistically summarize. Could it be the great reality? Anybody buying it?

I know it's not supposed to work that way, but we are talking about the government here.

Whereas private companies put all of their profits back into R&D and serving their customers. : ) Government can always be made more efficient, and it has definitely gone down hill in the last several years as far as bang for buck, but I think people hold governments to a much higher standard than they do every other human organization.
I'm a fan of markets, when there is enough competition to make them work properly, but, for example, I think it would be hard for our government be more inefficient than the big oil companies at distributing oil. Not that I want the government to take over that business, but any industry making that amount of profit is not an efficient market.

That is why Bush is starting to sink in the rural red areas, and his support is dropping down to the mid 60's with republicans.

Working poor white conservatives in many of these areas will be able to afford a home, and land say 25-30 miles out of town. They are taking it through the nose right now. They aren't getting raises, and they basically need a truck, which is getting them 15 mpg. So they are spending around $250 just for work mileage. Instead of say $150. That $100 is the difference between being able to go out to eat a few times a month, going hunting, going fishing, going to the movies. The Beltway crowd doesn't get this.

People are staying home, doing nothing but work, go home, and getting pissed.

I know a couple of people who, since gas prices started rising, can only afford to drive to and from work each day, with perhaps one side trip to do errands on the weekend.

Where it's really hurting in my area (New England) is among people who cannot afford housing anywhere near where their jobs are, and bought houses or condos way far out in the boonies -- and are now seeing a good bit of what they saved in mortgage costs lost to paying for gasoline.

OTOH, for those of us lucky enough to work in Boston, there is pretty decent commuter rail service to some of the suburbs -- though most of us have to drive to get to it. Ridership has gone way up in the past year.

people are already hitting the pawn shops for extra cash to fill up their cars to get to work. this is going to get much much worse for those families just now barely hanging on. in the meantime, we'll be entertained by the posturing of chuck schumer, dennis hastert et al as they demand! an investigation into price gouging. expect the ftc's report around the time gas hits $5.00.

The main page for those statistics is here, including more links and some graphs. Unfortunately, much of this data is from 2001, prior to recent increases. It would be interesting to see if annual mileage and consumption are still in these same ranges.

It looks like the Democrats are going to try to make this into a political issue.

They have to somehow connect the high prices with the actions of the current administration, while at the same time cover over the fact that their party has, over many years, been almost exclusively responsible for crushing every attempt to open new domestic supplies, not to mention the nightmare of many different fuel standards. Good luck with that.

More on pricing here.

Yes, I so clearly remember my republican realtor explaining to me a little over 3 years ago (while we drove around in her brand new Lincoln SUV) that if we went invaded Iraq, gas prices would stay down, or drop, and interest rates would would stay down, or drop.

I don't know what's more amusing: Kevin saying "sez" or tbros saying anything?

Crushing every attempt? That's a strong statement.

In any case, the experts say that domestic supplies are not the answer. The Alaskan oil would run the country for about a month. Boy, that exciting.

Many of those low to moderate income SUV/megatruck commuters are paying $650 to $800 permonth in car payments or leases on vehicles that they could barely afford in the first place, seduced by the zero interest financing offered by dealers. I have a hard time feeling sympathy for people who make their transportation a cosmetic and then put on way to much makeup. It's apainful lesson that society must learn. Poor people can't afford a rich mans car any more.

Tbrosz,

Gasoline supply is finite. We cant drill our way out of the mess. If people drove smaller cars, demand would be smaller and prices lower. Its economics.

In the past five years, especially after 9/11, the burbs in my neck of the woods have become overrun with station wagons on steroids, that is, SUVs. Completely unnecessary, but they gave the drivers that "reptilian" sense of safety. No one thinks any more, just reacts to gut feelings.

It looks like the Democrats are going to try to make this into a political issue. They have to somehow connect the high prices with the blah blah blah....

You wish.

All they have to do is sit back and observe while voters make the fundamental connection between an economic scenario that is hurting their ability to survive and the party that has controlled every organ of government for four years and has done nothing to remedy it and many things to make it worse.

The average household spends between 14% and 20% of its income on transportation alone.

That's for the top 20 metropolitan regions.

Total transportation costs, not just gasoline.

NYC is at 14%, ranging right on up to 20% for the sprawliest cities.

... not to mention the nightmare of many different fuel standards. Good luck with that.

quibble:

states like california and those in the northeast have their own particular and compelling interests in having stricter standards. there are a lot more cars there. neighboring states also benefit because air pollution tends to travel. don't like the nightmare of different standards? advocate for national adoption of a standard like that in california and other states like it.

" . . . their party has, over many years, been almost exclusively responsible for crushing every attempt to open new domestic supplies . . ."

Only a simpleton would believe that increasing domestic oil production would have a significant effect on US oil prices. There just ain't enough oil here.

Thanks for the link, tbrosz, and I discover what I expected. In general, we are geting more efficient faster than oil prices rise, at least up until the data ends. You are right, we want the latest data.

But, the conclusion still remains, the modern economies outperform the developing economies in efficiecy, which is the real cause for concern, for it is a major factor driving population migrations. A catch-22, the better able we are in coping with peak oil, the more immigrants arrive on our shore.

The economic trend is to pack more and more people into smaller and smaller industrial spaces for energy efficiency.

Table 1. 2003 Household Expenditures
on Transportation by Metropolitan Area

Rank |MSA| Percent of H-Hold Spent on Transp

1 Houston 20.9%
2 Cleveland 20.5%
3 Detroit 20.5%
4 Tampa 20.4%
5 Kansas City 20.2%
6 Cincinnati 20.0%
7 Anchorage 19.9%
8 Dallas- Fort Worth 19.7%
9 Phoenix 19.6%
10 Miami 19.6%
11 Denver 19.2%
12 Seattle 19.0%
13 St. Louis 18.7%
14 Atlanta 18.7%
15 Los-Angeles 18.4%
16 San Diego 18.4%
17 Honolulu 18.0%
18 Boston 17.2%
19 Minneapolis- St. Paul 17.2%
20 Chicago 16.9%
21 Milwaukee 16.6%
22 San Francisco 16.6%
23 Pittsburgh 16.6%
24 Philadelphia 15.9%
25 Washington D.C. 15.4%
26 New York 15.4%
27 Portland 15.1%
28 Baltimore 14.0%
___________________
United States 19.1%
___________________

Source: Selected metropolitan statistical areas:
Average annual expenditures and characteristics,
Consumer Expenditure Survey, 2002-2003.

I think it's humorous when the stock market gets all excited about inflation staying in place when they "take out expenditures for oil and food."

What are you talking about?

According to Glen Reynolds, Charles Johnson, Malkin, Hannity, Rumsfeld, etc., the war is going SWIMMINGLY.

I blame the press for the increased perception of economic hardship.

I hate to get snarky, but my friend Russ neatly skewered these people crying poor on his blog. If you're going to be dumb enough to buy too big and too far away when everyone knows that the cost of fuel is destined to go up, whose fault is that?

As to the economic fairness of gas taxes, is it that hard to come up with a bill that redirects the proceeds of a gas tax to a) increased welfare benefits, and b) tax cuts for the working poor and lower-middle class?

Pol: I think it's humorous when the stock market gets all excited about inflation staying in place when they "take out expenditures for oil and food."

Don't forget rising education costs and the increased in health insurance premiums, deductables, copayments, etc. If you add up all the things the CPI doesn't cover, it is well over 25% of the economy.

"Thanks for the link, tbrosz, and I discover what I expected. In general, we are geting more efficient faster than oil prices rise, at least up until the data ends."

Not really, miles driven per gallon burned is going up, but miles driven per person day also going up. Since the 70's gas mileage has approximately doubled, but miles driven per person has also approximately doubled. We are getting a lot more efficient in one way but a lot less efficient in another and they are pretty much canceling out.

We have built more efficient cars and less efficient cities.

There are indications that we are starting to build more efficient cities in this country again, but it is just beginning.

Imagine how it affects cab drivers and how that in turn affects you.

I am astonished there hasn't been more pain with $3.00 per gallon gas, more visible economic consequences.

Of course, I don't believe any government statistic released by Bushco.

Not in cities with good public transportation.

Just sayin'...

Commie bastard.

Do you ever parse out how much more you're paying for something because of the gas?

When we take our daughter to her twice-weekly ice skating class, that can cost from $3 to $6 a journey, depending on which car we take. That's $24 to $48 extra a month, in addition to what we "think" we're paying for the lessons.

I usually skip eating when we go to the mall, to save money, but it's best if I don't think about the $5 spent on the trip alone.

And if we head for a museum in L.A. (on the first Tuesday of the month, the Natural History Museum is free) --- 80 minutes to over 2 hours a way, depending on traffic --- jeez, that's at least $25 at current prices.

We hear that one reason for the high prices is the Gulf Coast (TX, LA)refineries knocked out by Katrina are still not all running at capacity. Who decided that these plants need to be in the way of hurricanes, and why are they not being moved to other port areas, such as Norfolk and calmer places like Wilmington, DE?

A lot was left out.

Any trucker can give you an ear full on fuel costs. Any business that requires employees to travel is taking a hit. That means those businesses are cutting back, maybe on the amount of health care increases they cover for employees. Higher fuel surcharge for shipping and flying. Speaking of flying, wait till you turn in your rental car at the end of your summer vacation. Get ready to be shocked. Fill'n the tank will cost more than you have in your pocket. You'll have to put it on your credit card. The one you used to pay off every month but kinda got away from you lately. But what the hell, with every damn thing going up but your pay. etc. etc. etc.

Do gas prices influence to cost of goods and services? That is, if UPS has to spend more in gas, does that correspond to a need to increase their shipping prices? If WalMart or Target or Albertson's needs to spend more in gas to deliver their products to stores, does that correspond in the need to increase prices? If so, are these increases in prices reflected in "gas consumption"?

J.B. and Adam Piontek --

Fuel prices impact the poor disproportionately because cheap housing costs are driven by cheap land costs. So in North Carolina and Tennessee, access to cheap land has meant sprawling cities and beyond that, lots of homebuilding in rural areas.

Adam -- even in many cities, good public transportation & transit don't necessarily serve poor areas. Lots of places intentionally avoid doing so. Suburbanization and the rise of the polycentric city means growth in entry-level jobs occurs in the outskirts, out of the reach of public transit systems. And guess who and where the labor is for those jobs? Poor city residents -- who remain car-dependent.

Further, very often new transit facilities aren't sited for income-equitable access. Montclair, NJ has FIVE train stations. Wealthy suburbs fear siting public transit to poor central cores -- again, maintaining auto dependency among the poor.

Gasoline taxes hurt middle income and lower income people hardest.

Not in cities with good public transportation.

Just sayin'...

Posted by: Adam Piontek on April 22, 2006 at 4:27 PM | PERMALINK

I have to drive 32 miles one way to work. Work 4 days, sleep in truck 2 nites a week. Cut my gas consumption by 40%, about 5 hours less drive time per week, customized schedule. Wal Mart parking lot is my second home,lol. If not gas costs would be about 20% of paltry take home.

I have a hard time feeling sympathy for people who make their transportation a cosmetic and then put on way to much makeup.

I hate urban SUVs and monster trucks as much as the next liberal, but you can understand why people on moderate/low incomes buy or lease them: lots of manufacturer and dealer discounts (including the ubiquitous cashback), maintenance handled under warranty, etc. It's a buy today, pay tomorrow approach (or, to be honest, an indeterminate long-term rental until it's repossessed) but that's a necessity for too many people.

Want a Civic or (especially) a Prius? Get in line and don't expect the dealer to give you a penny off. Add the fact that there's basically no market pressure in the small car sector (especially with diesel engines, given the crappy standards of DERV) and it's a seller's market.

Still, give a bit of time, and you might see Ford and GM importing their European models that do 35mpg plus.

Not in cities with good public transportation.

Just sayin'...

And, where would those cities be??

I bought my Hummer so I wouldn't have to sit on a bus next to poor Blacks and Puerto Ricans.

And, where would those cities be??

Portland, OR.

Definitely.

Matt: from memory try pewclimate, oecd, imf, and world bank for GDP/energy use.

On $GDP/energy use, the US now stands at less than 50% of its energy use in 1975 at approx. $3.5billion/Mtoe, but UK at $5billion, Germany at 5.4billion, and Japan at $6.5billion. Wonder why?

Think the price in the UK was about $5/gallon this summer.

For all you believers in only free markets being able to respond to the demand, what makes energy prices move is mostly history--it's happened and it probably wasn't predicted. When the whole economy has such huge capital outlays, private business is not going to take the risk to head in any new direction without a push. With relatively inelastic demand a small shortage is way more profitable than any oversupply. See Enron's energy manipulation and California's power authority panic buy of futures.

The end of liquid and gaseous fossil fuels is predictable but for some (ideological?) reason we're frozen from action. Just like medical care, the US cannot/will not take any lessons from overseas. Guzzle on.

pol & Raj,

Check upthread to the list.

While it's based on avg HH total transp spending, and so is inclusive of both SB-drivin suburbanites and non-car-owning downtowners, it's a good measure of the costs of urban mobility.

19 Minneapolis- St. Paul 17.2%
20 Chicago 16.9%
21 Milwaukee 16.6%
22 San Francisco 16.6%
23 Pittsburgh 16.6%
24 Philadelphia 15.9%
25 Washington D.C. 15.4%
26 New York 15.4%
27 Portland 15.1%
28 Baltimore 14.0%
___________________
The list was from most to least spent.

Mtoe = million tons of oil equivalent.

The Democrats stopped every attempt to open domestic supplies? When did Jeb switch parties?

gq and CatherineD:

re cost of fuel on product and delivery prices...

Trucking Impacts. Congestion means longer travel times and less reliable pick-up and delivery times for truck operators. To compensate, motor carriers typically add vehicles and drivers and extend their hours of operation, eventually passing the extra costs along to shippers and consumers. Research on the trucking industry has shown that shippers and carriers value transit time in the range of $25 to $200 per hour, depending on the product being carried. The cost of unexpected delay can add another 20 percent to 250 percent.

Globalization has a bottleneck in its future.

“In general, we are getting more efficient faster than oil prices rise, at least up until the data ends..”

Hmmm. I understand that oil prices were $29/barrel prior to invading Iraq; now a barrel of oil is about $73. I don’t think I can buy a car that get 2.5 times the mileage it did a little over 3 year ago.

That list is interesting. But I'm shocked about Baltimore. Gas in Maryland is the most expensive in the middle Atlantic and they have fair to bad public transit. Perhaps everyone is making bank in Baltimore (that's sarcasm) or no one goes anywhere.

Personally, I have never found the idea of blood for oil a bad thing. I'd certainly rather fight over a scarce resource (water, oil, land) than over religion or culture.

But the idea of blood for NO oil is rather stupid to me.

Would you accept $2,000 more per year in salary?

Read on...

The Puget Sound Regional Council (PSRC) says we spend about $26 billion locally, or 25 percent of our personal incomes, just for the privilege of moving around. And it's not light rail that's eating a hole in your pocket. We each paid about $5,400 in 1998 to drive a car, but only $690 to fund buses, ferries, and other public transit, the PSRC calculates.

Think the price is worth it for all that individual mobility? Those numbers don't even begin to get at the real costs of cars, says PSRC's Ralph Cipriani. "We pay for unprecedented mobility, comfort, and privacy in ways that are not always apparent," says Cipriani. "Most [people] generally consider the costs associated with maintaining and improving roadways, building sidewalks and bike paths, buying buses and operating transit routes. . . . In fact, these direct public expenditures by government are only a small portion of the total cost of transportation."

Parking is one of the biggest hidden costs of driving. In many cases, your car costs more sitting still than it does running down the street. A 1996 report from Northwest Environment Watch estimated that a parking space adds about 10 cents per mile to the cost of a daily commute. A typical commercial development dedicates more space to parking than it does to offices and stores. That drives up construction costs, in some cases as much as 18 percent, which means your rent, plate of pasta, and coffee cost more. But the cost of parking gets even more personal: Chances are your employer could pay you as much as $2,000 more per year for what it costs to hold a parking space for you.

Drivers can't even enjoy the smug satisfaction that they themselves are paying for the convenience of their cars. The U.S. Department of Transportation estimates that roadway-user fees and taxes (such as the gas tax and vehicle registration fees) pay for only about 60 percent of public expenditures for roadway construction and repairs. The rest has to be paid for by the public at large through sales and property taxes.

Residents of cities that have made heavy investments in public transit, such as New York City, pay $2,500 less per year for mobility than do residents of car-dependent cities like Houston, points out Peter Hurley of the Transportation Choices Coalition. Seattle's per-household costs are closer to Houston's than New York's.

from:
http://www.seattleweekly.com/news/0146/news-fullerton.php

DC1974:

But where do Baltimoreans live?

Transportation costs are a function not just a matter of gas prices and quality of transit. "Bad" transit may not increase costs, as long as it goes where it needs to.

Costs are a function of gas prices + vehicle choice x VMT. But Vehicle Miles Traveled can be low, as long as housing is located near transit, and housing is located near jobs.

That may be the case in Baltimore, I don't know.

The shocker for me was Minneapolis, which is reeeaallly spread out. They placed fairly high for that reason alone. May be a combination of increasing transit ridership and compact, mixed-use infill. Dunno.

Trucking may be taking a big hit, but the railroads are booming. They are also on a hiring binge to replace workers who will retire in the next few years.

Strange to say, a political situation is available, and not that hard to implement- if we wanted to.

Knock off that "safety regulation" crap and allow the import of small fuel-efficient cars. Set the national speed limit at 50 to protect small cars from the bullies in big toy trucks.

So, if we had a bunch of people who actually cared about the future of the country, it wouldn't be that hard. After WW II the British did without chocolate and butter for years because they cared about their country.

As for the Bush gang, I'm guessing they've already planned their getaway. They've skimmed the cream from the American economy. Now it's "So long, suckers!"

At the other end, though, are the people who make less than average and drive more than average. They probably spend 15-20% of their incomes on gasoline. That's a lot.

Using the EIA statistics Kevin linked to by income bracket (pg 57), and the actual reported miles driven by income bracket, and the same 80% disposable income rule, you end up with the following gas expenditures by income bracket at $3/gallon:

Income % (Kmiles, gallons)
$0-5,000 na-47% (13.5, 620)
$5,000-9,999 49-24% (13.4, 647)
$10,000-14,999 24-16% (13.2, 644)
$15,000-19,999 20-15% (16.2, 788)
$20,000-24,999 15-12% (16.6, 794)
$25,000-34,999 14-10% (19.3, 940)
$35,000-49,999 13-9% (23.8, 1183)
$50,000-74,999 10-7% (28.3, 1393)
$75,000-plus 8-na% (31.9, 1549)

I work in the insurance industry, and have always thought it odd that our prices are regulated and controlled by the government, while most other commodities aren't. There is way more competition in the insurance industry than the oil industry, yet we are the market they regulate. Go figure.

KDrum:

"They're probably pretty pissed that that whole Iraq business didn't work out quite the way it was supposed to."

Et tu, Brute?

Finally, Kevin tips his hand and acknowledges what I've been web-broadcasting for ages: The American public acquiesced on the Iraq war because it promised to feed their appetite for cheap oil.

Note: Does this mean the American public as a whole is guilty of war crimes?

Or merely liquid lebensraum?

koreyel:

"Liquid Liebensraum" -- that's classic.

Bob

"Kick Their Ass And Take Their Gas"

Sounded like a good idea at the time.

SombreoFallout: nice post on some of the $ involved.

After the fears of the early 70s subsided, Carter's nor any energy policy followed with a view to the future, CAFE regs pushed back until Bush's second energy policy in 5 years (excellent planning and foresight! Thanks for including us in the debate.), the apparently god-given right of US citizens to build how and where they like, drive anything they want, and pay more for bottled water than they do for gas coming halfway around the world, and without bearing the full costs involved, well, the chickens come home to roost. It's going to be more painful than it need have.

As some have pointed out, there isn't enough oil under ANWR to solve all our energy problems. I am also fully aware that for many reasons we need to move away from burning oil for power, and higher prices are going to be an important part of that.

But much of the current oil prices are being driven by emotional market movements, spiking every time some refinery overseas gets stuck, or something happens in the Middle East. Drilling in new areas in the U.S., Alaska, offshore, and elsewhere, will have a positive psychological effect on the market long before the production is up to important levels. And the oil, however much there is, isn't doing anyone any good in the ground.

***

has407:

I suspect that the increased amount of total driving done by higher income brackets is more related to a larger number of multiple cars per family than it is to long driving distances.

It's interesting that those with incomes under $5,000 still have an average of 1.4 cars per family.

BTW, Tigershark is right that Jeb Bush has been among those standing in the road of new oil development.

Railroads are booming largely because commodites, specifically coal, is booming. There is not, as of yet, a large scale move from trucking to rail. When was the last time you saw a new big box store within spitting distance of a rail line or with a spur going behind the store? I've not seen one.

Refineries were built in the Gulf of Mex because the original oil boom was in east Texas and hence the pipelines were there. Not to mention all the offshore wells in the GOM. Be kinda stupid to built one somewhere "safer" then have to spend billions on a pipeline to get it there.

But much of the current oil prices are being driven by emotional market movements, spiking every time some refinery overseas gets stuck, or something happens in the Middle East. Drilling in new areas in the U.S., Alaska, offshore, and elsewhere, will have a positive psychological effect on the market long before the production is up to important levels.

There you go again! Substituting marketing for policy! Great short term thinking!

And the oil, however much there is, isn't doing anyone any good in the ground.

Thats what red-blooded Americans have been saying about their home equity, too. Why sit on it when you can borrow against it? Wait a few more months to see how wise that reasoning was!

tbrosz: It's interesting that those with incomes under $5,000 still have an average of 1.4 cars per family.

However, they don't specify whether or not the cars are working.

Think the price in the UK was about $5/gallon this summer.

It's over $7/gal right now in the UK. Most of that goes in taxes, though, so at least Brits who pay through the rear end to fill up their car don't have to pay again when their credit card bill gives them a heart attack.

Not in cities with good public transportation.
Just sayin'...
And, where would those cities be??

Portland Oregon, Green and Clean

Light Rail, Streetcars, Buses, Urban Area Planning

No, I went to Sombrero's link and read the thing.

It neglects to put a price on the convenience of a car.

Riding the bus adds another hour to your day, typically, and at $30/hour for wage earners; the savings are gone. The lost time alone is $6,000 per year.

So also is gone the ability to run short errands to and from work. Eventually one needs a car to go shopping.

If, as claimed, addition bus lines reduce transportation costs by three times, then we would have an industry of private bus lines. We do a litte, namely van pools, which can be cost effective but they are still rare.

The most eficient over all transportation system remains the two door, four cilinder, five year old car. I know, because whenever we have gas prices rise as they are, these cars get swept off the market.

serial catowner:
Why take all the fun away?

All those little euro cars can zoom pretty well. Get on any motorway or autobahn. 85-90mph seems normal. I say regular speed limits for the boxes and 55mph for anything with a dry weight over 4000lbs.

It's spiteful but the SUVs might be close to their advertised 17mpg, and the boxes would still be getting 40+mpg!

And I'm not sure the oil price hasn't worked out exactly how the administration wanted it. Why else would you make such a hash of something the US has proven itself able to do in the past.

"I hate urban SUVs and monster trucks as much as the next liberal, but you can understand why people on moderate/low incomes buy or lease them: lots of manufacturer and dealer discounts (including the ubiquitous cashback), maintenance handled under warranty, etc. It's a buy today, pay tomorrow approach (or, to be honest, an indeterminate long-term rental until it's repossessed) but that's a necessity for too many people.

Want a Civic or (especially) a Prius? Get in line and don't expect the dealer to give you a penny off. Add the fact that there's basically no market pressure in the small car sector (especially with diesel engines, given the crappy standards of DERV) and it's a seller's market."

Are you suggesting that a Civic, Corolla, or Sentra costs more than an SUV? They don't. People are *not* buying SUVs because they're so darn affordable.

Hey, I didn't say you have to obey the limit. Most people would, most of the time, and that's enough to protect the small car from the rogue driver, and make a dent in how much oil we have to import.

That's why we had the first 55-mph limit- there was a gas shortage.

Kevin:

Quite right. Higher gasoline prices function as a regressive tax. Anecdotally, I have a friend from high school who foolishly never went on to college who must drive 30 miles each way to work each day in a factory, where he makes $25,000 per year. A $1 per gallon rise in the price of gasoline really hurts his standard of living and means that he must eat now literally eat Hamburger Helper without the hamburger to get by. These are the people that bluenose plutocrats like Bush cannot possibly relate to or empathize with. However, he is the hardest working man I know and is one of those salt of the earth people who really make America the most productive country on the planet.

It looks like the Democrats are going to try to make this into a political issue. They have to somehow connect the high prices with the blah blah blah....

Wow, you must be on the same RNC mailing list as the "liberal" media. ABC and NBC both used almost the exact same wording in their national newscasts.

There's safety in numbers, and if you can need gas less than the average person, you'll get taken care of when they do.

Ride a bike, read a good book on the bus, and you'll be talking the language they understand- because the language they understand is us not buying.

And I'm not sure the oil price hasn't worked out exactly how the administration wanted it.
Posted by: notthere on April 22, 2006 at 6:55 PM | PERMALINK

Yes, I'm sure prices aren't high enough for them. There's many a conservative who still complains about waiting in line to pump gas. High prices keep the riff-raff out, donchyaknow.

It's over $7/gal right now in the UK. Most of that goes in taxes, though, so at least Brits who pay through the rear end to fill up their car don't have to pay again when their credit card bill gives them a heart attack.
Posted by: ahem on April 22, 2006 at 6:54 PM | PERMALINK

That's really what this is all about though. Gas *should* be about $7-$10/gallon. The question is - do we, as a society, want this money going to fatcats like the Exxon CEO, who refuses to invest in expanding infrastructure or production capacity, so he can continue to milk a desperate market? Or do we want the bulk of this money going to pay for schools to educate our kids, or paying for public transportation, or sequestering carbon to curb global warming?
Somehow, I don't think the fatcats are going to spend it on something that's going to benefit me. (though, maybe I should brush up on my yacht-building skills, and change careers?).

BTW, Tigershark is right that Jeb Bush has been among those standing in the road of new oil development.
Posted by: tbrosz on April 22, 2006 at 6:43 PM | PERMALINK

Yes, the mafia often sends big tough guys around to the local shops to bust them up when they don't pay their protection money.

Note: Does this mean the American public as a whole is guilty of war crimes?
Or merely liquid lebensraum?
Posted by: koreyel on April 22, 2006 at 6:31 PM | PERMALINK

Yes - but if you suggest as much - you hate America. Don't you?

Yeah, that's going to be a real tough job to connect high prices with the supersecret "Energy Plan by Enron", oil refineries getting blasted in the mideast, and the Texas president brought to you by Halliburton and the oil companies. The average guy has no idea that an oil company would screw him.

But maybe they're quick learners.

"The most eficient over all transportation system remains the two door, four cilinder, five year old car. I know, because whenever we have gas prices rise as they are, these cars get swept off the market."

Huh huh, yea don't see many people buying busses when gas prices are high! Or train systems. Not one of my neighbors has started building a subway to take them to work. I definately don't see anybody down at the car dealership not buying a car when gas prices spike! Take that transit commies!

Poor use of statistics. You took the MEDIAN household income of $44,000 to compare to the MEAN gasoline consumption, even though the mean household income of over $60,000 is shown right there on the website. The only purpose for this would be to bias your results. I would have no problem with using the median as an average (although it should be stated), but choosing to use it when comparing to a mean figur is deceptive. In addition, if you are trying to illustrate a point regarding current gas prices, the current average income, not 2004 figures should be used. These may not be available but we can estimate them fairly closely at approx. $48000-49000 (or $66000-67000 for mean). For gasoline usage, you used the average for households with a vehicle, not for all vehicles. I did not find the definite figure, but I believe only about 85% of households have vehicles.Gasoline useage may also have changed downward somewhat both because of better mileage and somewhat smaller household sizes but I do not know for sure. If we adjust only by 85%, we get approx. 950 gallons.

Now the average percentage of income with $3 gasoline(comparing mean to mean) and attempting to adjust for income growth and inflation) would be $2850/$66000 or about 4.3%, not the ridiculous 10% you came up with.

If you are trying to make a point with statistics, it would be more impressive if you tried to use them honestly.

Jeb Bush changed his mind about oil drilling in the Gulf, and it's only a coincidence that he changed his mind after the 2004 election.

http://www.sptimes.com/2005/10/07/State/Bush_defends_gulf_dri.shtml

For real fun, think back to when you first entered the working world. What was your hourly rate of pay -- in gallons of gasoline?

What's your hourly rate of pay now, in gallons of gasoline?

The 55mph limit was brought in to save gas, but that didn't do much overall. Moreover, the dash to buy smaller, more economical cars soon went away. Eerily enough, the supercars were doing great business in Europe and the Middle East just before that crisis. Welcome Bugatti!

The need for a higher gas and energy prices is at least threefold. It gives greater emphasis to more economical vehicles, methods of distribution, production. It also encourages the development of alternative energy sources of all types that have utility in any way and become competitive. The greater overall efficiency contributes to environmental issues.

I think that some of the people who say its regressive against the poor are the same who propose flat tax or sales tax only. Of course there can be an adjustment in tax rates. There are poor all over Europe too and I have never heard this argument used in favor of lower gas prices.

High gas prices at the pump are mostly just an annoyance. The ripple effect through the economy, vis-a-vis the airlines, trucking, and shipping are the real story. If the price of a barrel of oil stays around $70-75, just wait until a Cat 5 hurricane wanders up the Gulf this summer. $110 a barrell anyone?

"Huh huh, yea don't see many people buying busses when gas prices are high!"

A cab company would easily by a fleet of vans for van pooling if it were cost effective. Funny thing, it is in many instaces, and cab companies do buy up these vans. Van pooling works for hotels near airports, better than car rentals. There are private chauffer services that collect you from home and take you to the airport, all cost effective when costs are added up. So, contrary to your statement, yes indeed, private companies, owned by individuals do buy up vans and offer commuter services cost effectively.

There are numerous private bus lines that operate from airports to distant destinations. Tourist enterprises use buses in the private sector cost effectively.

So we have an economic model that shows when bus and van commuting is cost effective and when it isn't. Mostly, for work commutes, it is not.

It is all so insane,

the last time we had anything close to energy policy was under President Carter, Kerry was accused of supporting a $$.50 tax per gallon some time ago.

Since then we built more suburban sprawl, moved furthe and further from jobs, got a tax break for huge Hummers instead of energy efficient cars, we now drive tonns of metal to work for hours per day, we refused to provide public transportation because we don't want to share anything with other people not even a ride to work.

And we expect to get it all for pennies.

Now the chickens are coming home to roost, so stop whining, you asked for it.

And our oh so competent liar in chief tals about energy solutions 20 years or never down the pipeline. No comon sense solution for the short term, like taxing the cars based on size, blue book value, public transportation and energy efficiency. All that is just too simple, we will go with sience fiction, like star wars.

jeff
Yeah, statistics are darn hard to use precisely, especially. In this case it looked like all figures were rounded and possibly KD missed the difference of Median and Mean, whether through ignorance or oversight.

However, he netted out taxes which you did not. Can we assume a higher tax rate for your Mean people or not? Anyway, it significantly changes your figure of 4.3%.

Contemplating the gasoline cost situation makes me feel that we are a pampered society.

Our parents and grandparents generation had to deal with REAL adversity. All we are bothered with is whether or not we may have to "carpool". Perish the thought!

Is anyone on this thread REALLY facing economic ruin because of gas prices?

The assumption that a typical American family pays 20% of their income in taxes is faulty from the getgo. If you plug $44,000 into a tax calculator, like this one at H&R BLOCK:

http://www.hrblock.com/taxes/tools/2005_quickcalc/frameset.jsp

you see that a typical family of four would pay only 4.5% of their income in federal income taxes, even less if they itemize. As federal taxes are by far the largest chunk, there is no way the rest of taxes add up to 20%.
.

VJ
Boy, I don't expect to be defending KD, but talk about nitpicking. KD obviously approximated to make a point and have a rather broader conversation than the angels on a pinhead.

I don't know what the Mean or Median HOUSEHOLD is, but I bet it's not a family of 4.

You guys set yourselves up.

It's obvious why median income is a much preferable metric than mean income. Can the same be said about using mean v. median gas consumption? I'd like some reason to believe that mean and median gas consumption are significantly different.

In Ireland I fill up my tank at the equivalent of $5.60 per gallon. My car averages 37.5MPG. The problem in the U.S. is clear, you spend TOO LITTLE for gas, and take it for granted. If you were paying the full price of oil. There wouldn't be a crisis, and you wouldn't be driving SUV's. And the world would be a better place. Less CO2, less pollution, better gas milage in your cars, and better public transport.

"As federal taxes are by far the largest chunk, there is no way the rest of taxes add up to 20%."

VJ -- You make the mistake many Republicans make. You confuse Federal Taxes with Federal Income Taxes. For most of us (the us who work for a living) withholding taxes--social security and medicare--are more than 4.5%. Our pay checks record them as being around 7.5% but that is only the half that isn't hidden. They are actually around 15%. -- The actual numbers are 2.9 for medicare and 12.4% for social serurity on earned incomes up to $94,200. Of course a big part of those taxes don't show up on your W-2 but are paid by your employer.

I just love it when people confound income tax with federal tax. I don't know if I am dealing with folks who don't work, or if I am dealing with folks who aren't honest. You got a job VJ?

How is it that Fuel can double in Value and the economists dont cry about that, but talk about raising Poverty Wages and they go into spasms about 'Increased cost of Goods'.

Increased Fuel price drives up the cost of every company that relies on Fuel [Plumbing trucks to Airlines] increases in price and they in turn pass that onto the consumer. Yet Min Wage stays the same, in reality it drops because of the fuel increase.

VJ
2004 figures, US census 2.57/household overall).

gq
has407 quote above from EIA (have not confirmed but seem right:
income 35-50/- 1183 gallons
income 50-75/- 1393 gallons
so an almost 20% increase in comsumption for an income increase of 36%. Falls in line with marginal propensity to consume, which is why the fat cats are so much FFAAATTTTTTER than even the numbers show.

Many of the folks hardest hit are redstate suburban churchgoers. If the Rapture doesn't happen soon those folks are going to feel betrayed.
Posted by: Ron Byers on April 22, 2006 at 4:26 PM | PERMALINK

Given the Discovery of the Pyramids in Europe, this week, they may have to rethink their Armageddon plans. In fact this MAY have consequences that pertain to the creation of the State of Israel.

Who are these people who use 1,100 gallons of gas per year? I drive less than 15,000 miles per year, and own a hybrid, which means I need barely 300 gallons per year. Still too much, but honestly, it's hard to feel too sorry for anyone who owns a gas-guzzler and drives 30,000 miles per year. That's just wasteful.

Dunno Hudson, but I see alot of people here driving huge SUVS to work and back everyday alone. Looking around in traffic I see few cars with more than 1 person, the majority are SUVs.

I used all of 15 dollars, at these prices, of Gold, err Gas in the last two weeks.

Sorry, Matt, but your observation that people are buying small cars when gas prices go up does not prove that the magical free market has determined that cars are the most efficient transportation system. It only demonstrates is that people respond to gas prices in thier car purchases.

"So we have an economic model that shows when bus and van commuting is cost effective and when it isn't. Mostly, for work commutes, it is not."

No, we have an example of a transportation system built assuming, subsidizing, and emphasizing the use of the car for over fifty years leading to most people using cars. You have been socially engineered by your government to depend on your car.

It is all very complicated. One of the main reasons transit systems work relatively poorly here is that the US has relatively low density. The US has low density in part because it has a relatively large car/road transportation system. US cities devote a much larger portion of their land surface to transportation than european cities. Our roads are wider and more numerous, our parking lots and driveways larger. This means that every trip in the US is longer by whatever mode. A walking trip in the US is less efficient than in europe because on average you have to walk across more pavement to get to that non-pavement destination in this country (of course if you just want to find a particularly nice patch of pavement it is likely to be considerably closer). This affects all transport modes, but the reason it exists is that the car/road transportation system uses a lot more land compared with other transportation systems.

Motorcycles and bicycles are a relatively dangerous way to commute in the US, why? Because cars run into them. Similarly walking is dangerous to the extent that it is almost entirely because a car might run a person over over as they cross the street.

Hudson

Should we take your post as a self congratulatory brag, or is your post a part of an elaborate mating ritual where you are trying to impress some member of the opposite sex of your good sense. :) Please take what I have just said in the good spirit with which it was intended. I hope you find the totally logical person of your dreams.

You ask where these people are who use 1100 gallons of gas a year? Well they are all about you if you live in Dallas, or Kansas City, or Los Angeles or Denver or any of dozens of other automobile oriented cities. Recently someone told me that because of a recent job change the husband in the family has to drive a full sized pickup truck 30 miles each way to work. I say "has to" because until the damn thing is paid off they are upside down and can't afford to trade for a Prius. Anyway, the folks using more than 1100 gallons are your friends and neighbors, and they are hurting.

Gasoline taxes aren't the problem. The tax per gallon is fixed. It's roughly $0.40 per gallon here in Texas. It was the same three years ago when I was paying $0.99 per gallon for gas as it was today when I paid $3.09 per gallon.

Notice that means the real price of gasoline before tax went from $0.59 to $2.69 per gallon, meaning it went up to 455% of its previous price here.

Someone has to pay the salary and retirement forthe President of Exxon. It takes a lot of gallons of overpriced gas to pay a single man over half a billion dollars. Then all his assistants, vice Presidents, and mistresses had to get paid in relation to what he did.

I don't care what he did. He wasn't worth the money. But then, neither are Bush, Cheney and Rumsfeld.

Then, since the gasoline taxes haven't gone up in years, we are being told that all the new roads in Texas will be toll roads, and some of the older ones converted to toll roads. These will be built by private contractors, half of which will rip off the toll payers and over charge for the shoddy work they will be doing - Haliburton, anyone? Brown and Root?

Libertarians and fiscal Republicans must be celebrating to beat the band.

'Ron' posted:

"VJ -- You make the mistake many Republicans make. You confuse Federal Taxes with Federal Income Taxes."

I made no "mistake", and I'm not at all confused.

.

"For most of us (the us who work for a living) withholding taxes--social security and medicare--are more than 4.5%."

FICA is not really a tax, in that the "contributions" are made to a quasi-governmental agency, not the federal government's general revenue coffers.

A "tax" is something that is gathered into federal government coffers to be spent by the federal government. Trust fund monies cannot, by federal statute, be spent by the federal government.
.

All they have to do is sit back and observe while voters make the fundamental connection between an economic scenario that is hurting their ability to survive and the party that has controlled every organ of government for four years and has done nothing to remedy it and many things to make it worse.

The driving force behind fuel price increases has been the increased economic growth of India and China. I am not sure how you blame that on Republicans or Democrats. It probably hurt a little that the Republican energy plan got bottled up in the Congress, but that's actually the fault of members of both parties, and was finally solved when some Republicans agreed to omit the provisions on exploring in ANWR. Politically, it looks to me like a wash.

However, Pres. Bush did try to push for increased investment in biofuels, and increased investment is indeed happening, though mostly at a slow rate.

If gasoline were not worth what it costs, people would quit buying. It just takes time to re-evaluate. It's true that many people have trouble covering the costs of driving to work, but it is also true that many people drive to movies, ball games, barbecues, soccer games, hockey games, and equestrian centers.

How many people here couldn't cut their fuel consumption by 25% by better planning?

togarmah
Federally, the minimum wage is not indexed in any way and only occassionally raised, so it is always eroding until they decide to raise it.

In Britain, I think the minimum wage is a little over $7/hr on the exchange rate. There are plenty of studies and data showing the effect of an increase on the economy. None of these come close to what the doomsayers say here. Although there is not Hispanic type illegal immigration, there has been a sizable flow from the continent, particularly Eastern Europe, some illegal.

What it really comes down to is lobby strength and idealogical convictions rather than facts.

What's this Discovery of the Pyramids in Europe? I missed that.

I do lot of driving for work. A few years ago(about 2002) I used to spend at most $350/mo for gas. I now am lucky I if my monthly bill will be $750 and BTW I know I do less driving now than I used to. BTW I have gone through 3 cars of the same model so it's not the vehicle or the vehicle getting older. I don't think the SOB in the OO has a clue as to how upset people are at him.

"FICA is not really a tax, in that the "contributions" are made to a quasi-governmental agency, not the federal government's general revenue coffers."

`When I use a word,' Humpty Dumpty said, in rather a scornful tone, `it means just what I choose it to mean -- neither more nor less.'

"A "tax" is something that is gathered into federal government coffers to be spent by the federal government. Trust fund monies cannot, by federal statute, be spent by the federal government."

Ah, so the money I pay to my state that is based on my income is not an "income tax." And the money I pay to my city based on the assessed value of my home is not a "property tax."

Smarter trolls, please.

Guys,

Whilst it hurts, I think its also very important to keep this in perspective of world oil prices. This is an Aussie oil industry site report that shows the oil price & tax component of OECDs here.

It shows that whilst, relatively, Americans have it bad right now with gas prices, you've pretty much got the cheapest gas on the planet.
Everyone else pays the same for the gas component, everyone else pays more with tax. Yet.. many of these countries seem to manage. Why can't the US?

=A bit of international perspective

BC

VJ

FDIC is not really a tax? That's funny. It is collected like a tax. The Congress uses the money collected like other tax revenues. Nobody can opt out of it without an Act of Congress. The IRS publication concerning it treats it like a tax. http://www.irs.gov/publications/p54/ch02.html

As I recall the US Supreme Court has held it is a tax.

Your hair splitting is to laugh. I know you have a job and it is working for the CATO institute. Right?

"A "tax" is something that is gathered into federal government coffers to be spent by the federal government. Trust fund monies cannot, by federal statute, be spent by the federal government."

That's ridiculous.

Main Entry: tax
Function: noun
Usage: often attributive
1 a : a charge usually of money imposed by authority on persons or property for public purposes

And if you think the Feds don't spend the excess entitlement income at this point, you're simply wrong. They pass it through in the form of lending to themselves then paying interest back to themselves. It's not a "trust fund" by any stretch of the imagination -- it's an implicit obligation with respect to a future entitlement.

Your definition of a tax, though, was comletely made from thin air.

What's this Discovery of the Pyramids in Europe? I missed that.

Experts Find Evidence of Bosnia Pyramid
Researchers Find First Solid Evidence of Ancient Pyramid Under Bosnian Hill
By AMEL EMRIC
The Associated Press
VISOKO, Bosnia-Herzegovina - Researchers on Wednesday unearthed geometrically cut stone slabs that they said could form part of the sloping surface of what they believe is an ancient pyramid lying beneath a huge hill.

Archaeologists and other experts began digging at this central Bosnian town last week to explore the team leader's theory that the 2,120-foot hill covers a step pyramid, which would be the first ever found in Europe.

"These are the first uncovered walls of the pyramid," Semir Osmanagic, a Bosnian archaeologist who studied the pyramids of Latin America for 15 years, said of the stonework found Wednesday.

"We can see the surface is perfectly flat. This is the crucial material proof that we are talking pyramids," he said.

Osmanagic believes the structure will prove to be 722 feet high, or a third taller than Egypt's Great Pyramid of Giza.

The huge stone blocks discovered Wednesday appeared to be cut in cubes and polished.

VJ

The social security administration calls the social security and medicare taxes, taxes. http://www.ssa