Thursday, April 27, 2017

Pollution Tax on Gas

The pollution tax on gas is an example of an excise tax. Its taxed in a similar manner to cigarettes because the government is trying to limit the harmful gas emissions let out into our environment. Raising the tax more will incentivize people to find newer, greener ways of transportation. The argument against raising the tax is that it will hurt our economy. But the state of Washington has the second highest gas tax rate at at 44.5 cents per gallon and also has the best economy nationwide (taxfoundation.org, 2016). It's quite possible that by raising Iowa’s gas tax we can boost the economy as well.

If the gas tax on pollution were to be raised again, there wouldn’t be much of a noticeable impact. If anything it would lower incentive for families or individuals to travel for vacations. In many states such as Florida, vacationer’s spending and tourism is a large percentage of their overall state economy. With a higher gas tax, less people would travel and cause many states to lose revenue; without people driving to visit, their system will crumble. Also, raising the tax won’t solve the problem of congestion. Each year, Americans waste over $100 billion just sitting in traffic (cato.org, O’Toole, 2014). Raising the price is only going to cause us to waste more money in the same situation.

Higher taxes on gas will not incentive people to use it less. It will just take money out of pockets that could be put towards something much more beneficial. For companies who depend on large quantities of gas, this potential raise in tax will slow business efficiency and possibly cause them to take their business elsewhere. Another factor is that this is a regressive tax which means it does not take personal income into account and this tax will hurt the poorer population much more than the upper class. Raising the tax even higher on gas isn’t going to have much of an impact on how much is used, it's just going to make people mad when they have to go fill up their tank.

1 comment:

  1. Since most Americans are dependable on cars that require gas, the big companies that sell people gas will not see a decrease in the people using their company. It will have to stay about the same since so many people use gas and they will have no other option other than buying the gas.

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