Sunday, August 30, 2009

Gas Tax Increases Around the World

Remember the late 1990s when gasoline for one's car was "cheap?" I remember complaining with my father that gas had reached $1.75 a gallon (46¢ a liter). Now the price at the same gas station is $2.49 a gallon (66¢ a liter) and it was a lot more a year ago.

There are many reasons why gas prices have gone up including greater demand, changes in currency rates, pipeline politics, environmental polices, etc. However, depending on where one lives another reason could be the change in the amount the government taxes on gas consumption. The Economist has a chart (below) which shows the fluctuations in gas taxes in the Organization for Economic Co-operation and Development, the international free-market body. Some countries like Turkey and Hungary have added woes to drivers by massively increasing taxes while Canada has actually lowered its tax.

One thing is certain when examining spatial patterns. The European core, with its social capitalist model, charges the highest taxes on average while the more capitalistic rim of the OECD has much lower gas taxes.

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