Prius demand high

It looks like Toyota’s Prius is so popular used ones are selling for more than new ones. Lauren and I would have loved to have bought one of these, but we couldn’t for a variety of reasons. From the article …

The survey said that 8 percent of the consumers considered hybrid vehicles in March, twice as much as 4 percent in February. It also said if gas prices reach $3 per gallon 77 percent of car shoppers will seriously consider a more fuel efficient vehicle.

That’s awesome that 77% of people would at least consider a hybrid. Of course, those looking to lower their gas costs might be surprised to find out that states are considering taxing drivers based on the miles they drive instead of adding a tax on each gallon of gas they purchase.

Considering that taxes on each gallon of gas you purchase is at least 42.25 cents per gallon (circa 1998) you can understand why states want to tax based on mileage and not on the amount of gas consumed. But does this mean you pay more, less or the same for transportation? Let’s look at the facts shall we?

  Prius Camry Hummer H2
MPG 55 28.5* 13
Gas Tank Size 12 18.5 32
miles / tank 660 527.25 416
$ / tank** $27.48 $42.37 $73.28
taxes / tank*** $5.88 $9.07 $15.68

* Average of city/highway mileage
** Based on national $2.29 average
*** Based on 0.49 / 2.29 * $ per tank

Needless to say the government would love it if we all drove Hummer H2’s. Let’s say that the a new tax was put in place of the “tax per gallon”, which taxed us on how many miles we drove. If we take the highest tax rate from above (the Hummer H2 gets taxed $15.68 on 416 miles, which is 3.7 cents per mile) we would get the following new data.

  Prius Camry Hummer H2
miles / tank 660 527.25 416
$ / tank $21.60 $33.30 $57.60
taxes / tank $24.42 $19.51 $15.39
total / tank $46.02 $52.80 $72.99

So the Prius would still be much cheaper to drive than a Hummer H2 or even the Camery. Of course, I would hope the tax per mile rate would be lower than 3.7 cents per mile. Personally, I think people who drive hybrids should get MORE tax breaks and not less.

One of the other problems I have is that you know that if the government changes how taxes are applied gas wouldn’t drop 49 cents a gallon. Instead, the gas companies would simply drop prices a little and then pad their bottom line from the price per gallon vacated by the government. Smoke and mirros in other words.

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