Going green means fewer ‘greenbacks’ in tax revenue for politicians to spend.
California gasoline prices rose 23% in 2011 to an average of $3.86 per gallon as consumer consumption dropped 1.8%, according to a report released today. Diesel fuel prices in California went up 25% in the fourth quarter of 2011 to $4.13 as consumption – virtually all of it from commercial vehicles – increased 2.3%.
California taxes gasoline at more than 50 cents a gallon, among the highest total gasoline tax rate in the United States. Combined with the federal gasoline tax, this means California drivers pay the second highest overall gas tax rate in the U.S.
Because of the recession, increases in California’s sales taxes and more fuel efficient vehicles, among other variables, taxable gallons of gasoline used in California – at 14.7 billion gallons in 2011 – was at the lowest level in more than a decade, a declining trend that has been going on since 2005. Politicians with their insatiable need for more taxes are concerned, which means hang on to your wallet as they figure out how to make you pay more for using less gasoline.
Global factors largely determine the price of oil, along with speculation in the global commodities market. Demand in India, China and other developing nations is increasing. So decreasing gasoline use in California had no measurable impact on worldwide demand. U.S. oil production was up 13% in 2011 compared to 2008, but at less than one-tenth of the world oil market, any politician promising drivers relief at the pump via “drill baby drill” is lying. Even the Keystone pipeline, if it gets approval, won’t help since none to the oil it will transport will stay in the U.S. as it is exported to the far east. Worse for the U.S. economy, Keystone oil will be refined in tax free zones in Texas.
