« Possibly the most extravagant compliment that I've ever been paid | Main | Economic policy advice for the NDP, Part VI: Climate change »


Feed You can follow this conversation by subscribing to the comment feed for this post.

I count two: Canada and Australia.

Although personally I'd favour Netherlands levels of gasoline taxes, one thing that might be interesting would be to look at changes in relative tax rates. Corporate and personal income tax rates have come down much more than taxes on gasoline -


Gaah! Quite right. But of course, the levels are higher there. Off to edit the post.

Like Declan, I too must be childish. I paste from his Saturday, September 13, 2008 blog for amusement:

I was somewhat surprised to see Stephen Harper say the other day that the Liberals proposed shift of taxes from incomes to carbon would "wreak havoc on Canada's economy, destroy jobs, weaken business at a time of global uncertainty."


If you're childish like me, it will be fun to throw Harper's comment in the face of Conservative supporters when that time comes.

And keeping throwing and throwing that comment in their faces. So does this mean a) that Harper is a condescending, arrogant, manipulative, sleazy, ambitious ass who treats his constituents as myopic idiot-fools or that b) he is a poor excuse for an economist and knows little about economic policy?

Dunno if I'm smart enough to figure that one out.

P.S. memo to the British Columbia NDP which just unsuccessfully fought a provincial election AGAINST carbon/petrol taxes: Are you paying attention?

It would be interesting to know what countries tax gasoline on a value-added basis rather than fixed per-unit taxes. Canada's excise tax is a fixed number of cents per liter and so will not rise with higher gas prices. Notice the baseline chosen is also 1998, a year with remarkably low gas price (almost a whole order of magnitude lower than recent highs). Much of the yellow line increase could simply be same percentage of higher gasoline prices per litre. Thoughts??

Good question Trevor. Off the top of my head, most of these petrol taxes are excise taxes based on volume, not value.

Note that oil prices bottomed in the late 1990s near US$10/barrel as did many other commodity prices in approximately that time period (on the heels of the Russian and Asian Tiger financial crises). The Eurozone is a net importer of energy and so resource-levered economies like Australia and Canada have enjoyed improvements in their terms of trade over that time period.

I suspect that most countries do as Canada does. A value-added tax would exacerbate swings in gasoline prices (something politicians would be sensitive about), and the revenues it generates would vary with oil prices. Governments would prefer a tax structure that yields a predictable flow of revenues.

Excise (volume-based) petrol taxes help to cushion the impact of oil price shocks on the macroeconomy whereas value-based taxes would help accentuate the impact of oil price shocks.

International comparisons like this mean nothing to most Canadians. All they care about is the comparison with the United States, the only country on the list with lower taxes.

The US should raise its taxes. However, the gasoline tax is much more regressive in the US, with its large, spread-out cities and suburbs and generally poor public transit.

Interesting comment tyronen.

Health results are also much poorer among low-income Americans. If the cities were less spread out and the transit was better, would there be so many grossly obese Americans?

Strikes me that low-income Americans get the shaft no matter what happens.

The comments to this entry are closed.

Search this site

  • Google

Blog powered by Typepad