The Real Reason U.S. Gas Is So Cheap Is Americans Don't Pay the True Cost of Driving

Amid all the celebration over America's plunging gas prices—down some 40 percent since June—it's easy to forget a very basic fact: in a global sense, U.S. fuel has been cheap for years. In late 2012, for instance, the United States ranked toward the bottom of a world list of gas prices, wedged between the likes of Tunisia and Chad on one side and Russia and Kazakhstan on the other. Most first-world countries paid at least double what America did then, just as they do today.

The situation is hardly a happy coincidence for U.S. motorists. On the contrary, American fuel prices are kept down artificially by low gas taxes that fail to address the true social cost of driving. An international comparison of gas taxes shows the United States in back of the pack by a wide margin: