"Two thirds of the price of gasoline paid by motorists in Europe goes to their own governments in tax
Imagine what Europe consumption would be if they didn't pay so much tax on gas! Consumption would much higher, and oil price higher (relatively). European gas at the pump would be less expensive (less tax), but American gas would cost more (oil price higher).
In conclusion, Americans should be thankful to Europeans for limiting their consumption by taxing themselves to death.
Well, actually, the Europeans are proof that one can live, in the long run, by paying a lot more for gas. What's painful and dangerous is too fast a transition from low to high prices, a "shock".
The argument that we should be OK because gas is cheaper today than it was 20 years ago, inflation wise, is true, but only after we have adapted.
Of course we can adapt, but how fast?
Too fast a rise may cause disruption. If gas were to cost $6/gal, I wonder how long it would take for the average American to accept to trade the SUV with a small economical car...
I realized something recently: I have lived a year or so in France 5 years ago and gas was around $5 or $6/gal. My wife and I were sharing one of the smallest car you can find there. I haven't made a rigorous calculation, but
I am sure I was paying less in gas per week for the same activity as we do now (go to work, go shopping, go to the movies...). The differences were the car consumed half, anywhere we needed to go was much closer, and public transportation was often available.
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