High Gas Prices In California
For Californians, a trip out–of–state comes with many surprises, one of them being gas prices. As any amateur economist knows the reason for the staggering prices is due to additional taxes added on by the state. California being the proactive state that it is has initiated multiple regulations on fuel and not one of them is forgiving to buyers. According to a recent Wall Street Journal article, gas prices in the state are well above the national average due to the harsh regulations of the government. People respond to incentives, and the residents of California make decisions by comparing costs and benefits. There are a couple factors that cause the "sky–high" gas prices in California, but a main contributor is an anti–carbon regulation. ... Show more content on Helpwriting.net ...There has been some talk about an "oil–extraction tax." With this tax in place, it would force companies to fork out more of the tax instead of the consumer. If higher taxes are put in place for the producer ultimately they are not the ones paying the higher price the consumer is. Either way producers will receive revenue and in order to do that they will just raise their prices. The demand for fuel is based on necessity forcing consumers to pay outrageous prices because they need it. In addition to the tax, oil companies would have to disclose more information about their supplies and prices. Since the companies have market power, some believe with the tax in place it would reduce the price of the good.
If there is anything that must be said, more taxes equal higher prices. The only way to lower gas prices is through reducing taxes and regulation. Many argue that the regulations in place in the state of California are over the top and unnecessary. There has never been a time in human history that more taxes resulted in lower prices. The "oil–extraction tax" is a disastrous plan that would only result in upset consumers because of the terribly high prices that would be
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