Chicago leading the pack in gas price surge

Chicago leading the pack in gas price surge

The price of gas in the U.S. is going up, and Chicago is leading the charge. NBC Chicago reported that the average U.S. price of a gallon of gasoline has risen 5 cents in the past two weeks. And Chicagoans are paying $4.18 per gallon of gas on average. That’s the highest price per gallon...

The price of gas in the U.S. is going up, and Chicago is leading the charge.

NBC Chicago reported that the average U.S. price of a gallon of gasoline has risen 5 cents in the past two weeks.

And Chicagoans are paying $4.18 per gallon of gas on average.

That’s the highest price per gallon in the contiguous United States. Only Wailuku, HI, has a higher average price, at $4.40.

Though prices are surging across the nation, something else puts Chicago gas costs at the front of the pack. One of the major reasons why the city’s prices are so high is because of Illinois’ additional gas sales tax burden.

Traditional gas taxes such as “motor fuel taxes” are a fixed amount per gallon. These taxes generally pay for road maintenance and other transportation expenses — and motorists in all states pay these taxes. Combined, the federal, state, county and Chicago motor fuel taxes total $0.83 per gallon at today’s price. That leaves the raw price per gallon at $3.35.

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But not only does Illinois have the nation’s fifth-highest state excise tax rates — it also is one of only seven states to apply an additional sales tax onto gas purchases.

These taxes don’t show up on your receipt — they’re hidden by being built into the price per gallon advertised along the roadways. Even worse, unlike the motor fuel taxes — which are a fixed amount per gallon — the sales taxes are set as percentage rates.

As the price of gas goes up in Illinois, so does the amount you pay in taxes.

These additional taxes add $0.33 per gallon.

The state’s 6.25 percent sales tax adds $0.22 per gallon to the price of gasoline in Chicago. The county and city sales taxes add an additional $0.11 per gallon to the price.

And unlike most states, whose gas-tax dollars fund roads and transportation services, the revenue generated by state sales taxes goes to the state’s general fund. That means Illinois is pouring gas-tax dollars into various government spending, including pensions and human services.

 

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