moths to a flame

Very small countries are an anomaly, specially in Europe. They are usually tax havens, trying to attract commerce and business from the neighbours. Andorra, Monaco, Liechtenstein, Gibraltar...

You could see them as parasitic economies, sucking money through their borders. They can be that way because they are not big, so the drain in the resources of the neighboring countries is acceptable, while they give some specialized services mostly to the higher classes: hush-hush banking, casinos, cheap electronics, luxury vacations.

Luxembourg is bigger and has more of a real economy than say Monaco, but still it has these kinds of tendencies.

I myself am being impacted by the Gasoline in a different way, it is not that I cannot afford the Gasoline it is I will not when there is alternatives. I have built myself a Motorized Bicycle and I consider this to be a thing that is going to be a wave of the future as it was in the past. When there was lack of capability in WW2 in Germany they did motorized bicycles and as people progressed they changed their habits and got various vehicles. However I am able to pull 150-180mpg in my motorized bicycle. I cut my costs and am loving it leaves me more when I would be having less.

Most states in the USA or Countries in Europe allow for these to be run without insurance or license that makes it even more affordable.

Currently most people are running the two-stroke engines as they are cheaper than 4stroke however due to EPA ban they will be going the way of the dodo. This will usher in the 4stroke that is cleaner and will truly run longer. By doing so it will help cut down on pollution and dependence on foreign oil given the high gas savings.

I have plans to use a 4cycle Tecumseh engine built in the USA or brazil or wherever its built. and run around the same mpg maybe a little less but no matter its still leaps above what a car can do. I use 1/16th of the gas I would use going to the grocery store to grab things. When you translate that to actual usage its substantial.

There is a group of people that are all for the motorized bicycles and if you are interested you can look at http://www.motoredbikes.com and get some info for yourself. Its a great idea, it may not be the best idea that can be done but its a hell of alot better than any other ideas I have seen. Myself I would love to get diesel and run homegrown bio-diesel but that is a entirely different topic all together.

Here is Stuarts post on the subject.

http://www.theoildrum.com/story/2005/10/22/235239/89

I've got no idea how to find this for the various countries.

The simple calculation is the US is 5% of the population and uses 25% of the worlds oil so we use 5 times the worlds average usage to generate our GDP this is why I said higher energy prices have a 5 fold effect on the US GDP.

Stuart would have to do a better analysis but the magic number is per capita GDP/per capita miles driven. This tells you how the economy can handle higher prices. I contend the US is uniquely venerable since its high per capita GDP is effectively directly equal to the price difference in gasoline vs other western nations.

Fear not, I’m not missing anything. It is the US (and Luxemburg) that is missing a proper tax policy.

With the right tax policy the US’ millage/GDP would never have gotten to were it is today.

Well Nate, next time you just show them a graph like these and then run away.

Hi Nate,

Next time ask them what they think of the Carter Doctrine, maybe they will buy you a beer and hoist you on their shoulders? Seems like you would be buddy for life talking that up. Seems also that some governments and oil companies think it is their god given right to the worlds oil, so can't really blame the people for thinking as they do, can one?

The smell of manure would have been strong even if they had been corporate lawyers & tax accountants. Maybe even stronger.

The key is to start that policy early...

Yeah, how about 1960?

it's kind of misleading to suggest, even here, that such a policy in 2007 would make one iota of difference.

The EU should do better but I think whats important for the World and the EU which is a big trading partner with the US is that the US is in pretty bad shape as gasoline prices increase. Our bad decisions will have a effect on Europe. Probably the best answer for Europe is to aggressively increase the amount of internal trade in the EU at all costs.
And secondly seek other markets Latin America Africa etc.

Being in better shape then the 500 pound fat lady that buys most of your food does not mean your in a good position.

The EU needs to push gasoline up to 12 USD/gallon or about 2.5 Euros a liter right now your low. And make sure its economy runs at those levels and it needs to eliminate its NG dependencies on Russia.

Thanks for that Geppetto.

I've checked the numbers from the Motoring Trust and it in facts states 4.8 $/gal in April. In light of that recent 6 $/gal this is probably wrong.

:) That's a funny remark.

The original data was all in $, and it reported to different points in time where the exchange rates would be different. So it was easier to have it this way. Anyway you just need the bars’ length in the graphs to get the idea.

You do mean £GB per pint.

I think your right on. The EU will be able to preserve take home pay even as gasoline prices rise since they have alternative transportation. The best metric is probably percentage of people that don't have alternative transport over cars. In either case the key is the EU will be able to preserve its take home pay far better than the US which preservers consumer spending and thus its economy.

I like this approach since it goes right to the heart of the matter. I was a bit concerned that the EU taxes are not as beneficial as we would think since they would have to cut taxes to lessen the impact but I don't think so since they have alternatives they will actually be able to keep the tax rate high and continue to enjoy the social benefits from the taxes. My concern was that this tax benefit would drop overtime but if you have alternatives this need not happen.

I still think EU taxes are too low but thats a different issue. The critical point is that they are high enough that alternatives are available preserving take home pay. Its really a black white situation either you can get to work in a reasonable amount of time without a car or you can't. In countries where the majority can't take home pay will drop with gasoline prices slowing the economy and starting a bit of a death spiral.

This of course leads to my analysis that in the US the result since we don't have any effective alternatives is to send a increasing percentage of Americans into abject poverty while in the EU you see a slightly lower general living standard that will actually rebound as public transport is optimized.

Any of you guys interested in one slightly obese American and family :)

garyp,

Do you have any links to the underlying data sources that you could share?
- per capita disposable income
- per capita mileage

Or, for that matter your results?

Thanks

Do the calculation as gasoline price as a percentage of take home pay

I explained why I didn’t do it that way.

That method you describe to ascertain demand destruction looks interesting, but as I said liquid wage is a poor indicator, since it is impacted by the tax policy of the country. You could eventually learn in which countries demand destruction would impact more individual consumers, but would be clueless about state spending.

According to the EIA, Brazil is a net importer on a Total Liquids basis:
http://www.eia.doe.gov/emeu/cabs/topworldtables1_2.html

I think that Norway has the second highest per capita income in the world.

I know there are many in this forum who lean towards a laissez-faire stance on economics. I hope the Norwegian example will give them something to think about. It's an example of how strong government intervention (and that cursed word, taxation) can have a long term positive effect on the wealth of a nation.

Thanks for your remarks cultural_sublimation, as a Norwegian, I'm almost blushing.

With regard to the Norwegian tax system, I find myself in favor of what I will call efficient taxation. The fact remains that there has to be taxes, the question is what kind of taxes and how much.

I will argue that taxes on consumption, like gasoline taxes, do less harm than taxes on work, like income taxes. But this is probably more true in a small country such as Norway, where BNP tend to be driven by exports (=production). In a larger economy such as the USA, BNP tend to be more driven by internal consumption. In such an economy, exports would be of lesser importance to BNP, which would be an excuse for politicians who focus on increased consumption to achieve a higher BNP.

Is the Norwegian tax system efficient?
-No it is not.
True, the Norwegian government has achieved a lot when it comes to diversifying the tax system away from pure income taxes. But this has resulted mainly in increased public consumption. Further, it has proved remarkably difficult to cull unnecessary benefits. Additionally, while income taxes has negative impact on people's willingness to work, they are generally easier to collect than alternative taxes.

The following summary details some of the income of the Norwegian state as projected for 2007:

All numbers in billion crowns
Total: 1137 \ 100%
Income and fortune tax : 153 \ 13%
Petroleum royalty taxes: 225 \ 20%
Value added tax: 171 \ 15%
alcohol tax: 10 \ 1%
tobacco tax: 7 \ 1%
vehicle value added tax: 19 \ 2%
vehicle registration fees: 10 \ 1%
gas/diesel taxes: 15 \ 1%
electricity consumption tax: 6 \ 1%
CO2-tax: 8 \ 1%
sugar and beverage taxes: 2 \ 0%
Document fee: 5 \ 0%
misc. environmental taxes: 3 \ 0%
Social security tax: 73 \ 6%
Employers' employee tax: 103 \ 9%
Other taxes and fees: 6 \ 1%
Dividends from companies: 26 \ 2%
Dividends from ownership
in oil & gas fields: 122 \ 11%
misc. other income: 173 \ 15%

Total from oil & gas: 385 \ 33%
Saved to meet future
pension and benefit
obligations: 308 \ 27%

Of note is the relatively small role played by income taxes. 13% for income and fortune taxes and 6% for social security tax. But in addition to this, Norwegian citizens must pay income and property tax to the county and municipality level.

One of the most glaring inefficiencies, is the 103 bn crowns paid by employers as a fee to employ people. I think everybody would agree that taxing businesses for employing people does not exactly encourage value creation.

To illustrate my points, I offer the story of my uncle, who works as an engineer at a private research foundation. Some years ago he spent much of his non-working hours doing home improvement. From a social economic perspective, he should probably have taken overtime work at his day job instead. But what he did probably made a lot of sense from a personal economic perspective.
Consider the following:
*House ownership is taxed favorably in Norway (socialist policy)
*Value added tax and employer fee means that services from craftsmen are very expensive
*A progressive income tax means that the marginal tax for working overtime is a lot higher than the capital gains tax for an appreciating asset like a house.

The history of the tax system is of course socialist policy (with an interesting twist). Socialist policy - tax the rich etc. - means a progressive income tax. But if you tax the really rich (the investors), they will leave the country. In the post WW2 world, where hard currency was lacking and we had a socialist government in Norway, the result was predictable: Low capital gains tax, high progressive income tax.
This means that the dentist who makes $100k-200k and wonders whether or not to do more overtime, knows that he must pay well over 50% income tax on any overtime. But the investor who receives $200k in dividends every year, only has to pay a 28% flat tax on this income.

At the dawn of the auto age the United States had a "a pre-existing, highly developed rail system already in place" as well.

Perhaps major collapse is required for Americans to change their ways. Prior to WWII, there was a large peace movement which wanted nothing to do with wars in Europe and Asia. Japan had invaded Manchuria in 1931. Roosevelt shipped arms to Britain to stave off defeat by Germany. It took the bombing of Pearl Harbor to arouse and unite this country to defeat fascism. Perhaps the American people can be roused from their sleep once more to defeat fascism here.

It occurs to me that Europeans have no way of imagining how big the United States is. All of Germany is 138,000sq.mi. Oregon, where I live, is 96,000, with a population of only around 3.5 million humans, and it is by no means the largest in area of 50 states, ngor the least populous.

I think you're right here NeverLNG. The US infrastructure of suburbs, interstate highways and an integrated continental economy was built on American oil. The US was by far the biggest oil producer prior to the 1970s Saudi ramp up. There was no real concept of limits on oil before 1973 and, even then, it was put down to OPEC. The general view was more drilling produced more oil.

As a Brit/European I can't claim that Europe had more foresight. The higher gas taxes are simply that - higher taxes from socialist politicians. The taxes reduced demand for oil but the smaller cars are as much a product of the smaller roads and infrastructure. When I lived in London I found even a VW Golf (US = Rabbit) was too big to squeeze between the parked cars. Smaller cars just drive better on smaller roads.

The small town I live in England now is about the size of a cloverleaf junction on an interstate. That's because the roads were built for horse and cart. No foresight there.

I would love to think it was due to rationally but I'm not sure. At the end of the day, stuff happens. Europe was laid out on horseback.

The result has been that since 1950 or so, Europe has developed rationally and USA has developed hedonistically. Americans right now are incapable of thinking small.

We have the same problem here in Australia. In a discussion at work recently i was advocating higher petrol taxation (a heresy in this country, of course), and was informed quite strongly that we cannot have high petrol taxes like in Europe as it is too far between places in Australia. The idea that petrol should be anything but a near free commodity is heretical, a term i happily use, as the oil based culture we inhabit is nothing short of a religion.

True as the reality of distance may be, that doesn't change the reality that there should probably be higher taxes on petrol. We have simply reached a point where virtually everyone who is alive has only lived in an oil driven culture, and for those who can, it was so long ago, that it is more of a hazy recollection than a firm memory. As such it is impossible for the people of a country used to building big to imagine that we should have a need to build a society that is localised. Unfortunately, there appears to be very little forcing people to think otherwise, and it appears that before it all falls apart, the last of the farmland on Sydney's suburban fringe will be lost to suburbs, a situation being repeated all across the country. Future generations will wonder how we could have got it so wrong, but in the here-and-now, most people don't see how it could be any other way.

It occurs to me that Europeans have no way of imagining how big the United States is.

The 27 member EU is about 47% of the area of the USA
1.67 million square miles against 3.54 million square miles

Turkey, Croatia and Macedonia are candidates to join and if they do the area will go up to 1.98 million square miles which will bring us up to 56% of the USA or 69% of the lower 48 states.

Add in Norway Switzerland and Iceland which are European countries closely tied to EU but not in it and who have considered joining and we are up to 2.17 million square miles and if Greenland wanted to come back (it left the EU in 1985) we would be over the 3 million square miles mark and bigger than the lower 48.

Europe is not that small.

I can't believe how little tax you pay in the US!

The US simply has had no incentive to conserve and make more efficient which is surprising giving the endless drive for profitability and corporate expansion.

Rough calculation: A tripling of crude prices to say $180 (from $60) would double UK costs (~£1.80/litre) but triple US costs (~$8-9 gallon). Yes very sensitive.

I wonder if highly taxed countries could afford to scale back the fuel taxation in response to this?? (If the UK dropped the tax to zero in response to a crisis it could absorb the whole tripling of crude price. It's not going to happen though.)

Nick.

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Just got back from Tuscanny in NW Italy. Really nice, lot's of small cars, motorbikes and villages with lots of farmland growing wine crops for export. Hardly any solar PV visible but saw some electric cars and bikes charging in Florence. Even though Europe is dense we still have a lot of food growing potential and organic / local produce is gaining in popularity.