2) Should the government increase its pollution tax on gasoline? No, the government should not increase its pollution tax on gasoline because it is hard to actually measure pollution enough to give a fair tax. Also, a pollution tax can lead to job loss whether it be a reduction in plant workers, or a closing in plants, and a pollution tax puts manufacturers at a major disadvantage. "If demand is price inelastic, the tax may have to be very high to reduce demand significantly. In the short term, firms may not feel they have many alternatives. Though other time, demand will become more elastic as more alternatives are generated"(economicshelp.org, Pettinger, 2013). To reduce the demand for gasoline would, the government would need to have an outrageous pollution tax on gasoline. Not only is the pollution tax an outreach of government into the private sector, but it is also pointless to tax something to an extent to which an industry itself will be close to destroyed.
3) Should the government increase its pollution tax on gasoline? Yes, the government should increase its pollution tax because of the benefits received from it. If you raise the pollution tax on gasoline to an understandable amount, less people will drive, but there will still be ample amount of jobs in the industry. Because of the notion, 'If I pay taxes, should I get something in return?' a pollution tax is an excellent example of paying for something that is in most cases a necessity, and receiving a benefit of decreased pollution for a simple tax.