Tuesday, September 20, 2016

Pollution Taxes Kranovich

1) Should the government increase its pollution tax on gasoline? Yes, the government should increase its pollution tax because the pollution tax helps in aiding the government with pollution and cleaning up the Earth. The tax itself can help reduce pollution, it penalizes those who pollute, and the money from those who pollute goes to the government to help with new anti-pollution strategies. In a study, the author concludes that in, "Taking account of both the revenue-raising benefits and the benefits from reduced fuel consumption, the optimal gasoline tax is just over $1 per gallon for the United States"(rff.org, Parry, 2002). Although this price is destined to change, an estimated $1 is the optimal price, today, the optimal price is at a much higher level. A higher pollution tax means less pollution and a cleaner safer world. 

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. 


  1. If you increase the tax less people will pay for gas. Therefore the government would make less money

  2. I disagree because the amount of pollution would barely be effected if there was an increased pollution tax. The only thing it would do is increase the amount of money required to fill up a persons car, so they would have less money to spend on other things that better the economy.

  3. I disagree with you because I don't believe the government should raise its pollution tax. If the prices on gasoline go up it would sell less than it does now. Gas should be kept at a reasonable price where it's easy to afford and doesn't make traveling difficult for people.

  4. I agree with this because wether or not the prices are high now they are going to get higher later as we run out of more and more gas


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