Taxing gas guzzling relapses in USA

Gas prices have plummeted 44% since peaking at over $4 a gallon this summer, and are now averaging around $2.30 in USA.

There's some evidence suggesting Americans are using the savings not to buy groceries or make home payments, but instead to drive more. That may, in turn, drive up demand and push prices right back up.

So while gas prices are still well below $3 a gallon, is now the time to pass a gas tax in an effort to keep demand down?

"There's no question, it will be successful as a way to cut consumption," said Gary Becker, a Nobel Laureate economist at the University of Chicago. "It's certainly a better time to enact it, than when gas was at $4 a gallon."

To those who support a gas tax, cutting consumption has many benefits.First, it reduces greenhouse gas emissions. It also helps alleviate congestion and eases the burden on the country's aging roads and bridges.

While it is likely to raise prices immediately, the tax would also simultaneously act to reduce consumption, so the market price for gas would likely fall. That would mean less money for OPEC or Exxon Mobil.
If the government raised the gas tax by $1, that's about $140 billion dollars a year that could be used for schools, roads, or whatever the feds wanted to spend the money on.

"If we can cut gas consumption, we can cut oil imports and we cut how much (money) we send to overseas nations," said Becker.

As gas prices passed $4 a gallon this summer, there was ample evidence that Americans were driving less.Sales of big cars and trucks plummeted. As fall approached, it was clear Americans were changing their driving habits.

Numbers complied by MasterCard's Spending Pulse market report showed gas consumption falling by as much as 9% in early October, a deeper decline than the 4% or 5% seen throughout the summer. Government figures for October showed a drop of over 4%, also outpacing earlier government estimates.But Americans love to drive, there’s got to be another way

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