The gas station I pass on the way to and from work each day is selling regular unleaded self-serve gas for $1.689. The federal gasoline tax is 18.3 cents per gallon, and the North Carolina gasoline tax is now 24.2 cents per gallon. So 42.5 cents or just over 25%, of what I pay at the pump goes to the federal and state governments. That rate doesn’t strike me as being unreasonable.

But as recently as November 2001 the average price of of gas was less than $1.10 per gallon. So that 42.5 cents was more than 38% of the price. Stated another way (the way we normally talk about taxes), the purchase price of the gas was 67.5 cents per gallon and the 42.5 cents in tax amounted to a 63% tax. Ouch.