The gasoline tax
A)is similar to most other taxes in that it causes deadweight losses.
B)produces the unfortunate side-effect of making the roads more dangerous.
C)can be viewed as a corrective tax aimed at multiple negative externalities associated with driving.
D)can be viewed as a command-and-control policy aimed at discouraging people from driving.

Question

Quizplus · Accepted Answer

The gasoline tax is a form of corrective taxation aimed at reducing negative externalities associated with driving, such as air pollution and traffic congestion. While the gasoline tax does cause deadweight losses, it is not the same as most other taxes since it is designed to address a particular externality. Additionally, the gasoline tax does not directly make the roads more dangerous or act as a command-and-control policy to discourage driving.

The Gasoline Tax