I met a friend for lunch yesterday in an Italian place in the shadow of the famous London Eye. It’s that gigantic ferris wheel on the south bank of the Thames, across from Big Ben. We were speaking mostly of parking when I brought up gas prices and the $4.50 a gallon we were paying n the US. He laughed.
I filled up yesterday, he said. I paid GBP1.33. I sat for a minute, thinking of how fortunate he was. I then realized that with the exchange rate, he was paying $2.66. Still a bargain. Then I remembered. He was talking liters. He was paying $2.66 a Liter (that’s a bit less than a quart.) There are 3.8 liters in a gallon. My friend was paying $10.38 a gallon. OMG
Why so high? Well it seems that the British Government needs to pay its bills. The tax, by my calculation, is about $1.50 per liter. If they knocked the tax back to what we pay in California, about 20 cents a liter, they would save about $5 a gallon, and bring prices down to sort of what we pay.
Although everyone knows they pay the tax, do they realize that it is so much. When we buy gasoline, the tax is right there, on the pump. You know just how much you are paying. That’s true of our sales tax, too. At what, 8% in some areas, it’s high. But here in the UK, their equivalent of sales tax (VAT) is 17.5% and is included in the price. So when you buy your Big Mac, you pay the total on the menu ($4). Not $4 plus the tax, as you would here.
So you just get used to it. Tons of money flows to the government and you don’t even notice. My guess is that’s why our sales tax is so much lower – you read it every time you get a receipt – you know how much you are paying.
I rail on — What do you think would happen if you were required to take out your pen and write a check every month for the taxes you owe Uncle Sam instead of having your employer deduct it from your pay. In many cases, you would be writing a check for $1000 or more (much more) every month. How long do you think it would take for the tax riots to begin?
Well, just feel a bit better about what you pay at the pump. Ok, I agree, it’s outrageous, but it’s not $10.38 a gallon.
JVH
2 Responses
:What do you think would happen if you were required to take out your pen and write a check every month for the taxes you owe Uncle Sam instead of having your employer deduct it from your pay. In many cases, you would be writing a check for $1000 or more (much more) every month. How long do you think it would take for the tax riots to begin?:
We had that system back in the 1940s. Observe:
http://www.youtube.com/watch?v=gJ69X1qt4sQ
Donald Duck encouraged to pay his taxes (not “go shopping”) to support the war effort.
I wouldn’t have a problem paying it in the US if we were compensated in other means as universal health insurance. UK has little of no cost for health insurance as you know.