26 comments on Fun with Fuel Subsidies and Taxes
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26 comments on Fun with Fuel Subsidies and Taxes
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That sounds precisely backwards. In high tax countries, especially those with taxes that rise proportionately to the price of oil, consumers acutely feel the oil price, and should consume less. A relatively smaller chunk of the consumer fuel dollar goes to the exporter. A low tax country like the US has a serious balance of payments problem, because consumers consume a lot of oil. High tax economies are forced to become more oil efficient, while those with low taxes, or subsidizes will lag behind on efficiency.
As pointed out above, few if any countries have taxes fully proportional to price. There's usually a fixed whack and then a percentage too.
Second, the folks in high tax countries are already using less. If you're already paying $8/gal, the rise to $9 is going to squeeze relatively less hard than a rise from $3 to $4 per gal here in the states.