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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: patron_anejo_por_favor who wrote (96340)8/17/2008 9:54:58 PM
From: Oblomov  Read Replies (1) of 110194
 
No...The tax should be variable. It should be $6/gal less the raw cost of gasoline per gallon (or whatever. I picked $6 arbitrarily).

There would be two advantages of this method:
1) gasoline cost per gallon would be fixed at $6/gallon or so. C osts would be more predictable to households and businesses.

2)Since the government would maximize its revenue by lowering the raw cost of gasoline, it would have an incentive to lower the raw cost of gasoline. At present, since the federal tax (and most states' taxes) is an excise tax that is a %age of the raw cost, the government has an incentive to keep the raw cost high.
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