The last time I wrote about gas prices it drew a lot of attention. Many people may have missed the point, though, so I’m going to do it again. Yesterday, someone I know went to Virginia and brought back an eye witness account of the prices along the trip, and I checked them on the internet today and found them unchanged. Grand Rapids and Virginia were the same, while Hibbing was 25 cents cheaper. Most of us are fully aware that prices in Grand Rapids and Virginia are quite similar, while Hibbing is usually 15-20 cents cheaper, 25 cents today. Last time I compared Grand Rapids to Hibbing, this time I’ll compare Virginia to Hibbing. Please look at the charts, which I will refer to below:
First, let’s look at the population. You will see that Hibbing had nearly twice the population as Virginia.
Next, take a look at three lines where there is a dramatic difference, and which heavily impact business. In Special Assessments, Virginia collected $222,776, while Hibbing collected only $47,769. Virginia collected almost five times as much as Hibbing while having half the population. Under Licenses and Permits Virginia collected $171,809 to Hibbing’s $143,901, nearly 20% more with half the population. Moving to Charges for Services we see that the numbers are close to the same, but factoring in the population Virginia’s rate is nearly twice as high.
Go on to compare the lines showing the borrowing, debt service and total expenditures for the two cities. You will see that the per capita levels are much higher for Virginia than for Hibbing.
So how does this relate to gas prices? Grand Rapids and Virginia both have higher taxes on businesses than Hibbing, and their gas prices are also higher. At first glance some will dismiss this as coincidence, but as time goes by, the preponderance of evidence will show that there is a definite relation between higher rates of taxes and spending by local governments and higher prices, not only of gasoline, but many other things.
Higher tax rates simply mean higher consumer prices. These taxes are a cost of doing business. Costs of doing business must be passed on to the consumer, or the business will fail. Simple as that.