QuietDragon
Posts: 47
Joined: 12/6/2005
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quote:
ORIGINAL: UtopianRanger
. quote:
Bob in the US pays $2.93 for his gallon of gas, only 43% of the price paid by his friend Adam in England for the same quantity of fuel.
If Bob feels agrieved, what do you thing Adam feels like?
Nice post Dragon. The only part I disagree with is the erroneous comparison you have made regards Bob & Adam.
I've seen American's parrot the same comparison after they've spent and hour watching the Fox news channel.
From my perspective, its canned propaganda designed to make Americans feel better about paying three bucks for a gallon of gas.
The erroneous part of the comparison is in the fact that the UK works off a value-added tax system. All of its social programs are paid for through the taxation of goods and services, where as America has an income tax system that essentially taxes production. Now we do have some state and federal taxes on gasoline -- that are supposed to go for the roads -- but percentage wise, compared to the UK is minuscule.
I've posted this before, but will do it again and again when I see a comparison of this nature made that relieves tension from those paying three-bucks a gallon - The tension need to stay on.
- R
Hi UtopianRanger,
Thanks for the reply. I agree that my comparison made no mention of the different personal tax structures of the UK and the US, and indeed you are correct that we in the UK get taxed both personally (known as PAYE - pay as you earn) and at the point-of-purchase (known as VAT - value added tax, which for most goods is 17.5%, although for essential goods is either 5% or 0% - the UK VAT regulations are astonishingly complicated, and the distinction between goods at 0%, 5% and 17.5% can sometimes be as little as their size (clothing and footwear), whether or not they are hot or cold (take-away food), whether they are in the furtherance of energy efficiency (5% as opposed to 17.7%), and specific categories of goods such as women's sanitary products (5%), and children's safety seats (5%).
An additional issue with the purchasing of vehicle fuel is that there is a secondary tax - fuel duty - which is currently approximately £0.47 per litre, basically 50% of the price of the fuel, imposed on purchases. It is this, more than anything else, which inflates the price of vehicle fuel in the UK. This fuel duty is also due on biofuels and vegetable oils the moment you make their use for running and engine rather than cooking French fries and doughnuts. (In Germany, however, state legislation exempts biofuels from fuel duty, immediately making it a significantly less costly alternative to using petrolium-based fuels in vehicles.)
Anyway, I disagree that the comparison was "erroneous". The comparison was, given my initial assumptions on liquid measures and exchange rate, entirely accurate. But I will accept that without a mention of the different tax structures in place on purchases in the US and the UK, it would appear that the UK purchaser was paying considerably more to the garage's profits than the US purchaser, whereas the substantial bulk of the price difference is going to Central Government as fuel duty.
By the way, I'm one of those "Adam" guys on the UK side of the Atlantic, paying the equivalent of $6.84 for my gas (diesel).
_____________________________
"Most welcome, bondage, for thou art a way, I think, to liberty."
Cymbeline, Act V, Scene 4 - William Shakespeare
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