PITTSBURGH TRIBUNE: The price of gas jumped about nine cents per gallon in the first week of 2014, prompting several analysts to conclude that the state’s newly increased wholesale gas tax trickled down to consumers…
The state Department of Revenue said the bill raised the tax on wholesale gasoline by 9.5 cents per gallon as of Jan. 1 and will go up again next year.
State officials, including PennDOT Secretary Barry Schoch, in stumping for the law, said the tax wouldn’t necessarily be passed on to customers at the pump because the tax was imposed at the wholesale level… (more)
EDITOR: As economic theory predicts, the result was an almost direct pass through of the increase of wholesale price to retail price. In fact, the retail price may go up even more than the wholesale jump due to wholesalers adding on their margin for profit. Thus we have another Gov. Tom Corbett deception.
The Guv lied again! But what else would you expect?
What? Do people actually expect that energy taxes will not be paid by the consumers? But don’t listen to reason, go ahead and tax the natural gas industry but please spare me the tears when your heating and electricity costs go up.
Actually the tax could fall on suppliers or consumers, depending on the elasticity of supply and demand. It’s classic macro economics that most people don’t understand. Sometimes suppliers cannot pass on added costs because competition. Other times the consumers bear the burden.
It would be nice to think that the Guv had taken that into account, but I strongly doubt that.
EDITOR: Correct. However, in this special case, since all competitors are equally impacted, it should pass through in its entirety and possibly more if the gas station operators add on their usual margin.