# Taxing Gasoline in Venezuela

9 Ways to Skin a Cat

The current drop in gas prices will certainly test the socialist plans of President Chavez.

You can use your savings account. But for how long.

One way to get around this problem is to find a way to tax those who have the money.

It is difficult to estimate the number of cars in Venezuela, but I will use the following (conservative) math. Car sales in Venezuela have reached upto 500,000 per annum. Let us assume that in the past 10 years, they sold an average of 250,000 cars. This would mean that there are 2.5 million cars on the road today.

I estimate that this accounts for all the retired (totalled etc.) cars and there are bound to be cars that are over 10 years old, to account for the percentage of retired cars.

Also, assume that each of these cars cost about US $10,000.00. This would mean that the value of the cars is about US$25 billion. Taxing these cars at 10% annually will bring an annual US$2.5 billion into the exchequer.

Interestingly, this will tax those with expensive cars more than those with cheaper cars.

Since the bottom 80% of the population does not own cars, it will not directly affect them.

I do not think that this type of taxation will have a negative effect on the economy since it is a tax on the wealthy and their surplus cash.

Many ways to skin a cat, I guess.