It's easy for the gov. to make us do what they want, remember the 55mph speed limit to save gas, they were gonna keep our money and not let us use it on roads if we didn't go along with it. How about smoking, it's for our own good that they raised the taxes so high on cigarettes. Lets face it they can take blackmail to levels that Al Capone would have been proud of.
Very well spoken (or typed)!
Point. Set. Match.
Ah yes, the Cruze. Isn't that the one that's had a few instances of the steering wheel falling off in the driver's lap?
http://blogs.wsj.com/drivers-seat/2011/04/10/chevy-recalls-cruze-after-a-steering-wheel-falls-off/?mod=google_news_blog
I'm gonna go ahead and quote myself where I said I don't advocate more taxes on gas. Pretty sure that message got lost somewhere along the line.
Our infrastructure is built largely around gas. As you said, it causes the demand curve to be somewhat inelastic. However, I find
it a bit naive to believe that jacked up gas prices, if taken to the right level, aren't going to cause demand to go to down, or at bare minimum, cause
people to change what they drive/how much they drive. I'd like to think that the government wouldn't be dumb enough to jack up the prices
so bad that it makes gas difficult to afford, but I've been wrong before. If you live the in UK, 60% of the money you pay for gas goes right to taxes.
Let's try that here. Now, gas is an average of 3.78 here in the U.S, with an average tax of $0.46, so we're paying about 3.324 just for the gas. Now,
make 60% of that tax. $5.32 gas anyone? Will people start looking into more fuel efficient methods then?
Add to that the fact that every time we hit a recession and our consumption drops drastically (as has just recently happen) that consumption gets picked up by developing nations,
combined with an essentially fixed supply infrastructure, and guess what. Now our piece of the pie just got smaller, and it probably won't get bigger again. Ugh, now I'm way off topic..
Our infrastructure is built largely around gas. As you said, it causes the demand curve to be somewhat inelastic. However, I find
it a bit naive to believe that jacked up gas prices, if taken to the right level, aren't going to cause demand to go to down, or at bare minimum, cause
people to change what they drive/how much they drive. I'd like to think that the government wouldn't be dumb enough to jack up the prices
so bad that it makes gas difficult to afford, but I've been wrong before. If you live the in UK, 60% of the money you pay for gas goes right to taxes.
Let's try that here. Now, gas is an average of 3.78 here in the U.S, with an average tax of $0.46, so we're paying about 3.324 just for the gas. Now,
make 60% of that tax. $5.32 gas anyone? Will people start looking into more fuel efficient methods then?
Add to that the fact that every time we hit a recession and our consumption drops drastically (as has just recently happen) that consumption gets picked up by developing nations,
combined with an essentially fixed supply infrastructure, and guess what. Now our piece of the pie just got smaller, and it probably won't get bigger again. Ugh, now I'm way off topic..
The problem with...
There's no doubt that going from $2.80/gal to $3.80/gal has reduced gas usage in the US (no such thing as a perfectly inelastic demand curve). But by how much? Doesn't seem to be enough to generate much interest in green cars yet. Adding another buck to the cost of gas will reduce demand/usage further but will it be enough to achieve the govt's goal without creating a negative impact on the economy as noted above? If not do the tax guys just keeping adding to the tax until they get the results they think they want? Where does it end?
Beats me. And that's the problem.
The weenies in the goobermint don't know either and if the current administration's record on fixing broken economies is any indication neither do they.
Historically social policy in this country is manipulated via tax policy.
That's worked out real well hasn't it?
... is defining the right level. At what point do people stop driving all together? How would that impact our economy? Can public transportation handle the increased load? How many low income people just say screw it and go on the dole because they can no longer afford to drive to work?
There's no doubt that going from $2.80/gal to $3.80/gal has reduced gas usage in the US (no such thing as a perfectly inelastic demand curve). But by how much? Doesn't seem to be enough to generate much interest in green cars yet. Adding another buck to the cost of gas will reduce demand/usage further but will it be enough to achieve the govt's goal without creating a negative impact on the economy as noted above? If not do the tax guys just keeping adding to the tax until they get the results they think they want? Where does it end?
Beats me. And that's the problem.
The weenies in the goobermint don't know either and if the current administration's record on fixing broken economies is any indication neither do they.
Historically social policy in this country is manipulated via tax policy.
That's worked out real well hasn't it?
They can raise the gas tax as high as they want. For every penny it's raised and I pay more at the pump, I just cut back in other areas. As long as I have enough gas to get back and forth to work and buy PB&J to eat, I'm good.
