California Logic: Raise Gas Taxes
- Demand Investigation Into Why Gas Prices Are High, by Mac Salvo, 4/25/19.
California
is home to some of the most power-hungry politicians on Earth. These people
actually hiked the gasoline tax, and are now demanding an investigation into
why gas prices are higher in California than elsewhere in the United
States. It would be sad if it wasn’t so insane.
California
Governor Gavin Newson is demanding an investigation into why the state’s gas
prices are so high. But as Reason points out, it’s not all that difficult to see
what that California politicians are the culprit. In fact, the reason the
gas prices are high is that Newsom (and other politicians) raised taxes on
gasoline.
As
lieutenant governor, Gavin Newsom supported a 2017 bill increasing the state’s gas
taxes. When running for governor in 2018, he opposed a ballot initiative that would have repealed that same
increase, reported Reason. But like all politicians, Newsom
is unwilling to admit that he and his comrades in the California government
have caused the problem. So begins the finger-pointing.
The
governor sent a letter to the California Energy Commission (CEC) on Tuesday
demanding that the state agency “investigate” California’s roughly $4.03 per gallon gas prices, which are currently
the highest in the country. Those prices are also well above the national average of $2.86 per gallon.
“Independent
analysis suggests that an unaccounted-for price
differential exists in California’s gas prices and that
this price differential may stem in part from inappropriate industry
practices,” wrote Newsom in his letter to the CEC. “These are all important reasons
for the Commission to help shed light on what’s going on in our gasoline
market.”
California
currently imposes the second-highest gas taxes in the country. A state excise tax currently adds $.417 per gallon
(almost 42 cents per gallon), and that rate that will increase to $.473 (47
cents per gallon) come July. But that’s not all. On top of that tax, the state
imposes a 2.25 percent gasoline sales tax. There’s more. California has also
added a low-carbon fuel standard and a cap-and-trade scheme for carbon
emissions which together already increase the state’s gas prices by $.24 per
gallon above the national average, according to a 2017 state government report.
The
worst part is that Newsome isn’t the only problem causer asking for blame to
shifted to “inappropriate industry practices” as opposed to their gas tax
hikes. In January, 19 state legislators (17 of whom had voted in favor of that 2017
gas tax increase, while the other two had only entered office in 2018) sent a letter to State Attorney General Xavier
Becerra, in which they demanded that the state’s Department of Justice (DOJ)
investigate the “unexplained gasoline surcharge” that was estimated to cost
Californian families $1,700 a year.
Yeah.
It’s a real head-scratcher. Even someone who understands just the basics of
economics knows that high levels of taxation and regulation and a lack of
competition in the state’s fuel sector are not mutually exclusive explanations
to the high gas prices.
Government
fees and red tape often have the effect of squeezing out marginal producers and
retailers (eliminating competition) giving remaining firms greater ability to
raise prices. It’s called supply and demand. The demand remains but much
of the supply is gone. Once the competition (supply) is gone by way of taxation
and regulation, the companies that remain can jack the prices up as high as
they want. California’s government is not doing its residents any favors when
it comes to their policies.
Norb Leahy, Dunwoody
GA Tea Party Leader
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