Taxes add a staggering amount to price at the pump

April 6, 2012


In prior posts, I wrote about the high price of gasoline and reasons for the escalating price. Also, how there was no end in sight as summer approaches with thoughts of travel by car to favored vacation destinations.

Recently the Illinois Policy Institute (IPI), published an article by Amanda Griffin-Johnson, senior budget and tax policy analyst at the IPI, “What are you paying for at the pump?”

Readers have every right to know why they are shelling out more and more for the rising cost of gas, and just what they are paying for.  It therefore seemed important, education-wise, for me to take the time to offer Griffin-Johnson’s researched fact. 

Although the article by Griffin-Johnson speaks of Chicago as having some of the nation’s highest gas prices at $4.67 at the end of last month, as compared to the national average of $3.90 a gallon, what about prices here in Lake Forest and Lake Bluff?

As detailed by Griffin-Johnson, motorists in Chicago are paying a staggering 86.6 cents per gallon in taxes, as depicted by the graphic furnished by the IPI. 

Griffin-Johnson goes on to relate in her article:

1. Traditional gas taxes like “motor fuel taxes,” are a fixed amount per gallon.  These taxes generally pay for road maintenance and other transportation expenses. Combined, the federal state, county and Chicago motor fuel taxes total 48.4 cents per gallon. The state also charges environmental taxes of 1.1 cents per gallon.

2. The State of Illinois, Cook County and the City of Chicago also charge sales taxes on gas. Illinois is only one of seven states that charge sales taxes at the gas pump. Currently the state’s 6.25 percent sales tax adds nearly 24 cents per gallon to the cost of gasoline in Chicago. The county and city sales taxes add an additional 13 cents per gallon to the price. These sales taxes account for more than 40 percent of the total taxes on gas.

3.  Sales taxes don’t appear on our receipt like it would in a restaurant or store.  It is hidden instead built into the price. Unlike the motor fuel taxes which are a fixed amount per gallon, the sales taxes are a percentage of the price. As gas prices rise, the amount of taxes paid increases. Additionally, revenue generated by the state sales tax on fuel goes toward much different purposes than the motor fuel taxes. Instead of being spent on roads and transportation services, a significant portion of sales tax revenue goes to the state’s General Fund, which can be spent on a variety of purposes from pensions to human services.

Given the facts as presented, some individuals may have this immediate response: “What difference does it make paying a few cents more in sales tax?” 

According to Griffin-Johnson’s research and evaluation, “If you filled up your car’s 15 gallon tank twice a month, you would be paying over $130 annually in state and local sales taxes on gasoline at the current prices.” 

Isn’t it past time that Illinois takes a cue from the other 43 states that do not charge a sales tax on gasoline and end its practice?

This would save taxpayers millions of dollars; that is, unless Lake Forest and Lake Bluff residents are so flush with money that taxes are irreverent to them. 


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