May 3, 2009

Gas Tax

This article suggest imposing a higher tax on gasoline due to the fact the prices have dropped from the $4.00 per gallon to $2.30 and Americans are using this price fall to consume more. As Americans consume more gas it drives the demand up resulting in higher gasoline prices. This article also introduces the idea that if the government raised the gas tax it would reduce consumption and prices would likely fall also with greenhouse gasses.

In the economic times of today this gas tax would pose many negative threats. First off this tax would attack the poor more than the rich and as unemployment raises this tax would place a burden on the many families affected by this economic downturn. Also with Chrysler and GM failing this tax would aid in destroying these companies as they are known for their trucks and SUVs. With this raise in gas prices GM and Chrysler would see a drop in demand for their vehicles.

There are many other solutions to reduce the use of gasoline. Auto makers continues to invest in making care more fuel efficient also with focusing more on alternative fuels such as natural gas, bio fuels and electricity. If more Americans have access to alternative fuel vehicles the gasoline consumption is reduced more than if a high tax is imposed.

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