February 19th, 2020
Taxes Increasing Anxiety Over Gas Prices
CHICAGO – The latest figures from the U.S. Department of Energy show that Chicago has now surpassed San Francisco and Los Angeles for the nation’s highest gasoline price per gallon. Just one week ago, Chicago trailed both cities at the pump. It is not the oil companies, however, that specifically targeted Chicago citizens with the “over the top” gas prices, –Chicago politicians did.
According to the American Petroleum Institute (API), the nationwide average tax on gasoline is 48.1 cents per gallon (cpg), which includes a federal excise tax of 18.4 cpg. In Illinois the average tax on gasoline is 61.2 cpg overall. In Chicago, however, it is far worse. In addition to the state excise tax (19 cpg), Cook County’s fuel tax (6 cpg), Chicago’s local tax (5 cpg), and numerous other taxes (underground storage tank fee, environmental impact fee), Illinois allows for sales taxes to be collected on the retail price of gasoline as well. The sales tax in Chicago is 9.75%. This means that Chicago citizens now pay well over 80 cents in taxes per gallon of gasoline purchased. It also means that, thanks to the sales tax, the taxpayer’s burden increases as oil prices rise.
Other places with notably high gas prices, like San Francisco and Los Angeles, can also blame their representatives. As a state, California has the nation’s highest gasoline tax rate (66.1 cpg). It also allows for sales taxes to be applied to gasoline, though rates are lower than in Chicago.
Unfortunately, other states are following in the footsteps of Illinois and California. Instead of relieving taxpayers of increasing financial burdens during this difficult economic crisis, legislators are turning to sales taxes as a means for making up budget shortfalls. Last week in Maryland, state legislators proposed a 4% sales tax on gasoline, even though Maryland citizens already face one of the nation’s highest state-level tax burdens. And Illinois Senate President John Cullerton has publicly stated that he would like to increase the state gas tax.