Do Americans pay enough for gas? Americans are screaming about $3-a-gallon gas, but fitting up in other countries can cost twice as much.This spring, as Americans paid upward of more than; above. See also: Upward $3 a gallon to fill their gas tanks, Congress scrambled for quick fixes to assuage as·suage tr.v. as·suaged, as·suag·ing, as·suag·es 1. To make (something burdensome or painful) less intense or severe: assuage her grief. See Synonyms at relieve. 2. angry voters. In April, the House approved steep new penalties for oil companies convicted of "price gouging Noun 1. price gouging - pricing above the market price when no alternative retailer is available pricing - the evaluation of something in terms of its price " (even though the Federal Trade Commission has found no evidence of illegal manipulation of prices). And legislators from both parties floated proposals ranging from $100 taxpayer rebates to temporary suspension of the 18.4-cent-per-gallon federal gasoline tax Noun 1. gasoline tax - a tax on every gallon of gasoline sold excise, excise tax - a tax that is measured by the amount of business done (not on property or income from real estate) . While American politicians debated gas prices, a German newspaper complained about new taxes proposed by the government: a higher sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. , a health-care tax, and a surtax An additional charge on an item that is already taxed. A surtax is a tax on a tax. For example, if a person pays one hundred dollars of tax on one thousand dollars of income, a 5 percent surtax would amount to an additional five dollars. on the wealthy. But there was no mention of fuel taxes, which account for more than half of every euro spent at the gas pump. Gas had just hit the equivalent of $6.40 a gallon, but few Germans were calling for gas taxes to be cut. It's not that Europeans like paying $6 a gallon. Nor do they relish paying gas taxes. But they seem to agree that taxing gasoline is both necessary--as a way to raise money for the government--and beneficial for the environment. In Japan, gasoline costs nearly twice what it does in the U.S. because of the taxes. Other high-tax countries include Europe's two big oil producers, Norway and Britain, as well as Turkey, South Korea, and Poland. The main reason for soaring gas prices is the sharp rise in the price of crude oil, which is near record highs of around $70 a barrel. Supply and demand have both played a role: Booming economies in China and India have meant more cars and factories and more demand for energy. On the supply side, political strife in Iraq, other oil-rich Middle Eastern countries, and Nigeria have caused disruptions to oil supplies. In the U.S., oil production was hobbled by Hurricanes Katrina and Rita last year, which knocked out oil wells and refineries along the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east . WHY IT FEELS SO BAD IN THE U.S. Because Americans were paying so much less for gas than most of the world, the recent jump in the price of crude oil resulted in a proportionally bigger hike in gas prices in the U.S. than elsewhere: If gas costs $2 per gallon in the U.S. and goes up by $1, that's a 50 percent increase. If gas costs $6 per gallon in Britain and it goes up by $1, that's only a 17 percent hike. So that same $1 increase feels a lot worse in the U.S. than it does in Britain. In his 2006 State of the Union address “State of the Union” redirects here. For other uses, see State of the Union (disambiguation). The State of the Union is an annual address in which the President of the United States reports on the status of the country, normally to a joint session of Congress (the , President Bush called on Americans to break their "addiction to oil" through the development of cleaner, cheaper alternative fuels and electric or hybrid cars that are at least partially powered by batteries. Using less fuel altogether is another approach: Some Americans are already trading in their gas-guzzling S.U.V.'s for smaller, more fuel-efficient vehicles. Some experts believe that higher fuel prices can actually have a positive effect--and that perhaps Americans don't pay enough for gas. Higher gas prices would make alternative fuels more competitive, and promote their development. Robert H. Frank Professor Robert H. Frank is the Henrietta Johnson Louis Professor of Management Professor of Economics at Cornell University's S.C. Johnson Graduate School of Management. He is a monthly contributor to the "Economic Scene" column in The New York Times. , an economist at Cornell University, proposes an additional gasoline tax of $2 a gallon. He says that the higher price would encourage people to consume less energy. "That would not only reduce our dependence on foreign oil," Frank wrote in The Times, "but would also alleviate air pollution." By Mark Landler in Munich Mark Landler is Frankfurt bureau chief for The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times. |
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