Gasoline Prices

Governments tax goods with price inelastic demands in order to maximise revenue. Price elasticity of demand is a measure of the responsiveness of the quantity demanded of a good to a change in its price. An inelastic good is a good in which the changing of its price results in a proportionally smaller change in its quantity demanded. Due to the addictiveness of cigarettes and the difficulty to change addictive habits, cigarettes are inelastic goods. “California's Proposition 56 will increase taxes on a pack of cigarettes from 87 cents to $2.87.” Due to the small change in quantity demanded to an increase in price, when governments tax cigarettes there will be greater consumer expenditure and government revenue. In the graphs below, the tax revenue (TR1) for the good with an inelastic demand is significantly greater than the tax revenue for the good with an elastic demand (TR2). As well, the consumer burden (green) is larger for the inelastic good, whereas the producer burden (brown) is larger for the elastic good. Taxing cigarettes

Taxes policy is one of strategies that states have to increase their competitiveness. From 51 states nation-wide, only five states that do not impose sales tax or 0% sales tax rate. They are Alaska, Delaware, Montana, New Hampshire and Oregon. Without sales tax, in this five states, people can buy everything without spending extra dollar for tax, which mean they will have extra ‘money’ for saving or spending to other goods compared to other states because some of states impose both income and sales tax.

Texas has policies with low taxing, low spending, and little social assistance to less fortunate individuals. This approach to growing poverty problems in Texas is seen as an efficient way to solve poverty. The ideal of this way of approach is to make individuals fight their way up by themselves to a better living condition. Having “low” taxes Texas has attracted big business into its state lines. According to a report from the Texas Study Group in 2013 Texas ranks amongst states with lowest tax rates in: Tax Revenue Collections per Capita (45th)1, Total State Expenditures per Capita (48th)1, and Sales Tax Collections per Capita (18th)1. This shows why Texas is considered a low tax state, but what the public doesn’t acknowledge is that the only beneficiary from this practice are big businesses. Large corporations and other big business pay low taxes and in some cases none at all, this affects the general public because the government will get the missing tax money from individuals.

Federal gasoline tax debate has been on continuous lose ends in the economy and American society as a whole. The debate on the plans to reduce harmful emission is one of the main issues for an increase in the tax on gasoline. The government of United States also aims at reduction in fuel imports to decrease the deficit. Most people in the American fraternity believed that increase in the gasoline tax would result that the negative effects would reduce, (Ferrero, Giosuè & Balducci, 33).

The gas tax policy in Iowa will not be very popular in most areas of the state. In the high poverty level areas the tax will be unwanted. Most places will not be happy with the change, however it is important for us to implement this tax to help fund road conditions, bridge, and also public transportation. It is important that people

During these hard financial times, the right economic decision is not to increase the cost of living even further by increasing the tax on gasoline. It is better to raise the tax on yachts as this will affect a smaller section of the state who can comfortably afford it. Raising the tax on yacht is also less likely to cause a ripple effect on other sectors of the economy when compared to raising tax on gasoline hence a better

36. Review Figure 3.4. Suppose the government decided that, since gasoline is a necessity, its price should be legally capped at $1.30 per gallon. What do you anticipate would be the outcome in the gasoline market?

The history of cigarette smoking and raising taxes to help in decrease consumption will help us understand why we need to raise cigarette taxes. tobacco smoking was one of the very first things to go up in the U.S. not only for health but raising them also helped the government get more money. On November 18th, 1921 Iowa was the first official state to tax cigarettes this is because of the effects of tobacco started to show in millions of deaths each year and the health problems that cigarettes were causing in people who smoke. Once other states seen that it was a good thing to taxe cigarette them the race began to raise taxes and get money “Historically, governments have levied tobacco taxes to generate revenues. Increasingly, however,

Prices in gasoline change due to various reasons, some of those main reasons are affected by four sets of cost. Crude oil, taxes, refining costs and distribution and marketing. Crude oil affects the price the most, Why? Because crude oil costs are responsible for two-thirds of the cost of a gallon of

As Figure 4 illustrates, the correlation between tax rates and revenue generations are assumed to be a direct correlation; that is, as the tax rate increases, revenue collections increase, and vice versa. However, this pattern is only true for tax rates that lie on both the high and low ends of the tax scale. By finding the mean of the highest tax rate of states with recent reforms (Illinois @ 9.5% and Connecticut @ 9.00%), we calculated ½ of a standard deviation and assume this to be the relevant range of tax rates where there is no significant correlation with revenue collections. In this range, increasing or decreasing the corporate tax rate will not automatically lead to similar results in revenue collections.

Last year, gas prices decreased under two dollars, for the first time in nearly seven years. Drivers enjoyed gas prices as low as 1.89 per gallon. Lower gas prices help people commute, especially those who are poor. When gas prices are low minorities spend less of their income on “basic needs”. However, many Americans question whether gas prices should continue to decrease or be kept at a price higher than what's been seen recently. When gas prices decrease, it threatens the natural gas industry, consequently laying off workers. While higher gas prices might decrease jobs in the oil industry, ultimately, when gas remains low it makes it affordable to the lower-class and more money is kept in citizens pockets.

Funding transportation infrastructure that supports petroleum requires leveraging funding from the Federal government as the primary revenue source due to its geographic dispersal across the nation. A multi-tiered approach must be taken to ensure that infrastructure is properly identified and prioritized for funding; the Federal government needs to set the foundation for infrastructure investment through tax revenues, tax incentives, and policy, while incorporating expertise from State, Local, and private sector partnerships.

In 2015, there has been a proposal to increase county property tax by 40%, fortunately it was approved for 32% instead (4). According to a nonpartisan research organization and policy institute in Pennsylvania, 25% of revenue is spent on K-12 Education, Medicaid and Children’s Health Insurance Program 16%, Higher Education 13%, Transportation 5%, Public Assistance 1%, Corrections 4% and all others 35% (1). If 35% of tax collected goes under other, taxpayers have a right to know the breakdown. Transportation 5%, should be considered one of residents’ highest priority, with road repairs falling

Further, when the cost of gas increases, car owners are worse off following the cost of a input they require now utilizes a greater amount of their income than it did before. At the point when buyers are worse

The topic of this paper is gasoline prices and higher state sales tax. According to Stephen Singer’s article(Aug 24,2017), ITEP’S research reports(July,2017), (July,2017),(Aug 2011), and(December 2011), the authors tell the reader the consequences of higher taxes on sales and gasoline in Connecticut and the solution to reduce tax burden on low income family. In Singer’s article, Connecticut legislators are deciding to increase sales tax from it’s current to 6.85% to fix a budget deficit, estimated to reach $3.5 billion in two years and improve state aid to towns. Retailers and consumers criticize the decision and thinks “it would hurt consumers and hurt retailers” (Tim Phelan). ITEP’S research report(Aug 2011), sales and