Another gas tax coming down the pipe (Bakersfield: buyer, prices)

[CaliRestoration]

Originally Posted by 2sleepy

You just correctly pointed out that oil prices are determined more by supply and demand than they are by increases in the cost of a barrel of oil, well done

I recommend looking at this VERY basic graph. If you can understand what's happening here, then you might understand why what you said was extremely cringey (for those with a background in business and economics). But to help you get started, what you are trying to do is isolate supply shock, from the effects of government taxes on commodities, that is missing the point entirely. All have an effect on price discovery.

[CaliRestoration]

Originally Posted by Tulemutt

None of these things have anything to do with extraction taxes in any measurable consumer context.

The Torrance fire critically affected finished product inventory, availabiliy ... among other things requiring inventory substitutions from far away.

The extraction tax is only on “extracted” and NOT “refined” crude. Thus it is a base tax on crude material wherever it is destined - in state or out. Furthermore, it is nothing whatsoever different than similar extraction taxes levied by all other oil producing states.

Supply shocks and government taxes on commodities both have an effect on price discovery.

Change my mind.

[Tulemutt]

Originally Posted by CaliRestoration

Supply shocks and government taxes on commodities both have an effect on price discovery.

Change my mind.

Everything affects everything. Wow. News flash. Revelation.

Now then, the issue here is: how much?

The intent of your thread here is to heap ridicule and loathing on the state for its costs of livng and political preferences (which, note, are the peoples’ choice by majority ... which, theoretically, as a self-proclaimed resident of Alaska, you do not participate in).

The reality is, as sleepy just pointed out, and I wrote just before, there are several realities affecting the local cost of gas at the pump to local consumers. Price per gallon of crude is one. But ...

... a gallon of crude is not a gallon of refined gas

... not all California crude stays in California

... and not all California consumer pump gas comes from California crude.

[2sleepy]

Originally Posted by CaliRestoration

I recommend looking at this VERY basic graph. If you can understand what's happening here, then you might understand why what you said was extremely cringey (for those with a background in business and economics). But to help you get started, what you are trying to do is isolate supply shock, from the effects of government taxes on commodities, that is missing the point entirely. All have an effect on price discovery.

I think I learned in my humble public college economics classes that gasoline is relatively inelastic while ice cream is very sensitive to price changes. But what do I know?

[CaliRestoration]

Originally Posted by Tulemutt

Everything affects everything.

Good, my work is done! That's a nice step from...

Originally Posted by Tulemutt

As such it would have essentially zero impact on Californian citizens as consumers.

Originally Posted by Tulemutt

... not all California crude stays in California

... and not all California consumer pump gas comes from California crude.

Now then, the issue here is: how much?

Whatever the oil companies can pass to California consumers, so pretty much 100% of the tax since buyers are not going to buy California's more expensive crude (compared to cheaper crude from elsewhere). That's kind of how markets work.

[CaliRestoration]

Originally Posted by 2sleepy

I think I learned in my humble public college economics classes that gasoline is relatively inelastic while ice cream is very sensitive to price changes. But what do I know?

Did you also learn in that humble public school econ class that high inelasticity actually amplifies the effects of taxes on commodities?

[2sleepy]

Originally Posted by CaliRestoration

Did you also learn in that humble public school econ class that high inelasticity actually amplifies the effects of taxes on commodities?

You used ice cream to illustrate the demand elasticity of gasoline and now, rather than admit that you were wrong you want to move the goal post, uh uh I don't want to play

[CaliRestoration]

Originally Posted by 2sleepy

You used ice cream to illustrate the demand elasticity of gasoline and now, rather than admit that you were wrong you want to move the goal post

I'm not moving the goal posts, I'm completely accepting your example and saying that your point that gasoline has High inelasticity actually helps my point on the negative effects of government taxes (on consumer price).

uh uh I don't want to play

[Tulemutt]

Originally Posted by CaliRestoration

Good, my work is done! That's a nice step from...








Whatever the oil companies can pass to California consumers, so pretty much 100% of the tax since buyers are not going to buy California's more expensive crude (compared to cheaper crude from elsewhere). That's kind of how markets work.

“Everything affecting everything” is a far reach from having any “measurable impact” which is what I qualified right from the start. Ignore that truth as you will to save face.

Of course the taxes will be passed ultimately to consumers. All costs of doing all and any kind of business are passed to consumers. That is the very definition of business. The question here, once again, is: how much will that affect California consumers - when:

... a gallon of refined gas is not equal to a gallon of crude

... not all California crude stays in and is consumed in California by Californians

... not all refined gas consumed in California comes from California crude

... etc.

[CaliRestoration]

Originally Posted by Tulemutt

The question here, once again, is: how much will that affect California consumers

We'll see next year when it passes with little opposition. I can't wait to see.