Gas Taxes save consumers

There's some of the copious drivvel in this article in the Weekly Standard, as for instance the following passage which sounds like a crack dealer talking to a street whore:

"Cars are the keys to adulthood, the grail of status, the lifeblood of the economy, and the passport to a vast land."

OK, now give me another hit, dude. Putting that aside, though, I propose a counter-hypothesis though I'm no ecconomist (far from it). As far as I understand the gasoline tax, it's a flat tax based on the volume consumed. Thus, an increase in the spot price of crude oil that increases gasoline costs would only increase that portion of the gas price that is not taxes. If 76% of the price of gas there is taxes, a doubling of the other 24% of the price would only lead to a relative 1.5X increase in the price of gas there while it almost doubles the price here. I believe that's approximately what actually happened these last few years: due to various factors (including market forces since EU countries are smaller in both population and size than the US, etc.), the price of gas at its low point in '98 was somewhere around $4.50 there while it was somewhere around $0.90 here. Now, the price there--to quote Chris Pope who's more knowledgeable than I am--is $7.13 a gallon there, and around $2.30 or so here. So, less than a doubling occurred there while more than a doubling occurred here.

Why is this important? Most member countries of the EU have a number of systems in place to mitigate the regressive nature of the gas tax, including a rural income tax examption (so Chris' Utah example is a dud) and various forms of public transportation financing for the urban poor. That, coupled with other "benefits" such as the health care system and free education, etc., etc., allow europeans to live with these higher taxes. Granted, the system is not perfect and when recession hits there, painful cutbacks are sometimes made that wind up hurting lots of people's pocketbooks. But nonetheless, just like with everything else that we purchase, the consumer will become used to a certain percentage of their paycheck going to gasoline, regardless of where we live. However, the last 10 years of gas taxes there have indeed changed the types of vehicles people drive. Instead of commuting to work in an SUV that gets 12 mpg, they generally choose to commute either by non-car routes or in cars that get around 40 mpg.

And that is really the key to my argument. When prices rise, the American consumer is much more vulnerable than the European consumer. Sure, it hurts everywhere, but there, prices don't rise quite as fast to begin with, and you tend to not need as much of it there: filling up the car once every 3 weeks as opposed to once every week I believe makes quite a difference.

Bottom line: yes we like large cars. However, our market has never pressured automakers to make midssize, comfortable commuter vehicles more fuel efficient, and there are lots of easy ways to do that today, right now, that don't increase the price of the car dramatically (compare the Hondas and Toyotas with the GMs). Secondly, though it'd be absolutely foolish to impose a gas tax on the American consumer now while prices are high, had we done so 10 years ago, we would be much more shielded from wild price swings now.