Doesn't the government love high fuel price,s because they bring in high tax revenues?

Question

Doesn't the government love high fuel price,s because they bring in high tax revenues?

Answer 1

Well that would depend on the state in which you live.  If the state collects sales tax that is based on the price.  The other taxes are based on the number of gallons.  Generally higher fuel prices are not good for the government for a number of reasons.

Answer 2

No.  The tax on gasoline is an excise tax - per gallon.  So the government collects the same tax regardless of the price of the gasoline.  Also, since high energy prices hurt the economy, other government revenues decline.  As the economy worsens, the cost of government assistance programs increase.  Finally, just like the rest of us, the government has to pay for the high cost of gasoline too.