Energy Literacy Advocates Newsroom

As we continue evaluating adding a new tax on gasoline, today we'll take a snapshot look at the pros - are there any positives to such a tax?

Adding a new tax on gasoline raises the overall price at the pump. This leads to decreased demand for gasoline, and thereby reduces the amount of fuel we consume (and pollution we put out) overall. Additionally, if a static gas tax is set, raising the price to $4 or $5 a gallon, consumers will demand more fuel efficient vehicles. The average fuel efficiency of the US fleet will go up.

If the revenue generated from a higher gasoline tax is designated for renewables and alternative fuel development and research, this means a boost for new energy technologies.

On the business side, car manufacturers now have a predictable demand for fuel efficient vehicles. The static price of gasoline helps new automotive design meet the future needs of drivers.

In March of 2004, the Congressional Budget Office (CBO) ran a study comparing the costs of raising CAFE standards versus raising the gas tax. The costs of raising the gas tax by 46 cents per gallon were found to be LESS than the cost of mandating a higher average fuel economy to automakers. Gains in fuel efficiency would be realized more quickly, and 42 percent more fuel would saved than raising the CAFE standards 3.8 mpg.

These are some of the "wins" with a new gas tax. Tomorrow we'll look at several negatives associated with the tax.