Priming the Pump

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

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NEW YORK SUN CONTRIBUTOR

With crude oil prices hovering near record levels in current dollars (albeit not in real terms), a lot of New Yorkers are heading to their computers to look for low gas prices on the Internet, but they could just hop in their cars and head to New Jersey. According to the American Automobile Association’s daily price report, a gallon of regular unleaded was going for an average of $2.745 in the New York metro area yesterday, compared to $2.559 across the bay in Newark. Gas can be had for $2.689 in Bridgeport, Connecticut. What do Connecticut and New Jersey have that New York doesn’t? Lower gas taxes.


The American Petroleum Institute, an industry association, estimates that New Yorkers pay at least an additional 42.6 cents a gallon. There are eight cents for excise tax, 15.2 cents for the petroleum business tax, 0.3 cents for a “spill tax,” a petroleum-testing fee of 0.05 cents, and sales taxes. Incidentally, the excise tax is included in the price when the sales tax is calculated, so New Yorkers pay a sales tax on the excise tax, according to a spokesman for the New York affiliate of the AAA, Robert Sinclair. And thanks to the city sales tax, residents of the five boroughs are hit even harder. Rising gas prices have pushed the average city take on a gallon to about 22 cents a gallon.


Which leaves New York motorists looking jealously over the borders. New Jersey charges an excise tax of 14.5 cents a gallon. Despite recent increases, Nutmeg State drivers still pay only about 25 cents a gallon, at least for the time being. All politicians decry high gas prices, but only some of them seem to get the message about the effects of tax rates. City Council Member Tony Avella recently announced plans to introduce a resolution calling for the city to shift to a flat excise tax on gas, and then set the excise at a lower per-gallon level than the current sales tax. At least that’s a start, even if totally eliminating the city tax would be even better. If taxes were cut, fierce retail competition likely would force prices down, says an economist at the Cato Institute, Peter Van Doren. New Yorkers, take note.

NY Sun
NEW YORK SUN CONTRIBUTOR

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.


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