Saudi Arabia’s Tax Gamble
Iconic images from the 1970s show long lines at gas stations across the United States—a group of Arab nations had imposed an oil embargo on the U.S. for supporting Israel during the 1973 Arab-Israeli War. The price of oil nearly quadrupled, causing gas shortages that hit Americans badly, while leaving countries such as Saudi Arabia so rich that they dismantled their tax bureaucracies. In the following decades, Saudi citizens paid virtually no taxes.