A Novel Way to Educate Californians About State Gas Tax Increase

Everyone who drives in California suspects that fuel prices here are painfully high. And their suspicions are well-founded. Only Hawaii has more expensive gasoline. Or did.

Thanks to the 12-cents-a-gallon tax hike on gasoline that went into effect on Nov. 1, California now has the highest average price in the nation — $3.21 a gallon, 11 cents steeper than Hawaii, according to gasbuddy.com. The increase will result in the average California family paying roughly $600 a year in more taxes, according to Howard Jarvis Taxpayers Association President Jon Coupal.

Blaming the “price gougers” at Big Oil and “greedy,” “manipulative” speculators is often the response. When she was California’s attorney general, Kamala Harris even began a government inquisition into fuel prices. The heretics targeted by the investigation were refineries across the state.

But oil companies don’t levy taxes. Governments do. And in California, they are now responsible for as much as $1 of the price of a gallon of gasoline, and $1.25 for a gallon of diesel fuel, a figure that includes the 20-cent per-gallon increase on diesel that began the same day the higher gas tax arrived.

It’s a good bet that few Californians know exactly how much of the pain at the pump is caused by our elected officials. And, no doubt, the elected officials like the cover of darkness. Ronald Stein, engineer and founder of PTS Staffing Solutions in Irvine, says that “government and special interest groups have been successfully HIDING behind the price of transportation fuels.” He suggests “shining a light on hidden costs at the pump.”

“Every taxable item we buy, such as clothes, food, cars, computers, including the hundreds of millions of products on Amazon, etc. applies taxes AFTER the purchase,” Stein wrote last week on the Fox & Hounds website. “The advertised price of every taxable item, except gasoline, ALWAYS EXCLUDES sales tax and federal and state excise taxes.”

So, “in the interest of transparency,” Stein wants fuel pumps at service stations to be affixed with stickers that show “those costs imposed by consumers’ elected and appointed representatives.” The government-imposed costs, he says, “should be honestly disclosed to the consumer.”

If Stein can get his sticker on the pumps, we suggest adding a second one, which would explain how California’s boutique blends, those specialized gasoline formulations that are supposed to ensure cleaner air, and other government regulations increase the price of gasoline.

We further suggest following the Fox & Hounds link and taking a look Stein’s breakdown of taxes and fees on both gasoline and diesel — and then be prepared for sticker shock. His is an idea that makes perfect sense, which is why Sacramento, as presently constituted, will never do it.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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