PeachParts Mercedes-Benz Forum - View Single Post

tcane · #2 04-10-2002, 09:17 PM

Taxes. When the first Arab oil embargo hit the US, the government saw how much consumers were willing to pay for fuel, then when the embargo ended and crude oil prices dropped to levels pre-embargo, the government stepped in and added taxes to fuel since consumers proved they would pay more. Pre-embargo I remember gas wars were the price dropped to like 15-17 cents per gallon, after the embargo I can't recall paying less than 30 cents. The next embargo pushed prices even higher and more taxes were added when crude oil prices dropped. As I recall, you're looking at about $0.35 Federal tax on diesel plus whatever the state adds on (in TX about $0.18). My figures may be off a bit, but they're close and I believe you get the picture.

The government justifies the tax on diesel because the heavier weight of big rigs (80,000 lbs.) causes more wear and tear on the roads (true). Other vehicles using diesel are insignificant compared to heavy rigs as to the amount of fuel used, so the government does not have a lower tax for smaller vehicles using diesel - plus it would be an administrative/control nightmare. Also, farm and off-road diesel users do not pay the tax, and their diesel is dyed red to show it is for farm/off-road use. Getting caught with red-dyed diesel in your tank is a fineable offense.

Tom