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Tuesday, June 03, 2014 5:11 PM

Hosed at the Pump: Where are the Highest Gas Taxes in The Nation?

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The Tax Foundation posted the following map of gasoline taxes.

The Tax Foundation says "Gas taxes are generally used to fund transportation infrastructure maintenance and new projects. While gas taxes are not a perfect user fee like tolls, they are generally more favorable than other taxes because they at least loosely connect the users of roads with the costs of enjoying them. However, some of our recent analysis shows that many states do not rely on gas taxes and tolls as much as they could, and instead fund substantial amounts of transportation from other sources like income and sales taxes."

Not That Simple

States with high gas taxes do not necessarily have lower taxes elsewhere. Illinois and California are certainly cases in point. Property taxes in Illinois are over $14,000 on something like a $500K home.

The Tax Foundation notes "rates shown do not include Federal excise taxes of 18.4 cents per gallon."

Nor do they include applicable sales taxes or local gas taxes or Cook County gasoline taxes.

Illinois also has "home rule" sales taxes for various locations within a county. For example, and in addition to special gasoline taxes in Cook County, the Illinois Department of Revenue Tax Bulletin shows that Cicero (in Cook County), has a sales tax of 9.75%, while Dolton (also in Cook County) has a sales tax of 8.75%.

Why Are Chicago Gas Prices So High?

Indiana radio station WBEZ 91.5 asks the question: Why Are Chicago Gas Prices So High?

Customers may also have a desire to blame gas station owners for the high price of gasoline. But Beth Mosher, spokeswoman for AAA Chicago Motor Club, says it’s not their fault.

“Everybody wants to take it out on their local gas station owner why these prices are so high,” Mosher said. “But the reality is when the prices are this high the profit margins for these gas stations are so thin, they are going to make more from a bag of doritos that they are selling you than they are the gas.”

Mosher says the final factor for high gasoline prices can be pinned on the tax man.

“First and foremost, we have to talk about the high taxes in Chicago,” she said. “About 70 cents on the gallon is what people pay in Chicago for gas taxes, really, really a high number, especially given the statewide average is 49 cents on the gallon.”
Our NW Indiana reporter bravely goes where no Hoosier (willingly) has gone before: a Chicago gas station.

Hosed at the Pump

An Illinois Policy Institute report "Hosed at the Pump" will put things in proper perspective.

That graphic is from August of 2012. Rest assured taxes are higher today.

And Illinois is one of only seven states that charge a sales tax at the gas pump!

Illinois is #8 according to the Tax Foundation, but in reality, Illinois is near the top of the list, especially Cook County.

Mike "Mish" Shedlock

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