Recently I heard of an initiative to create a federal committee that aims to set the profit margins of gasoline producers due to what some call “excessive profits”. Apparently, this “independent” and “just” committee will determine a “fair” profit that the gasoline producers will be allowed to keep.
That got me wondering just how much the State and Federal governments profit from gasoline sales and whether those were “fair” or “excessive” profits.
So when I stopped to gas up, I took a photo of the breakdown of taxes (included at the bottom) and did the following calculations:
Looking at the data, it comes as a bit of a surprise that 27.6% of the price we pay at the pump is taxes! I am not sure I know of any other product on the market that is so heavily taxed by the government! Of that, the State of California makes a whopping 20.7%.
So, if this committee ever becomes reality (probably won’t) I propose we create an equivalent citizen’s committee that will determine what a “fair” government tax is on gas 🙂
Picture taken at the gas station detailing the various State and Federal taxes: