Question

Often gasoline tax (or tax on fuel cost per vehicle miles traveled) can have an immediate impact on the demand for VMT and thus, can serve as a strong disincentive for private transportation. Provide a rationale for or against gasoline tax as opposed to slow change in people’s behavior through land use (urban form) changes.  

• Provide points supporting fuel tax and against fuel tax
• Provide points supporting land use policies and against land use policies.

Answer 1

Points in favour of fuel tax:

It can act as a strong incentive to discourage people from using more fuel and hence save the environment from air pollution.

Through gasoline tax, we can make people to rationalise their behaviour, for example, car pooling etc.

Points against gasoline tax

Gasoline has become the basic necessity for people. Taxing it will make it expensive and take away purchasing power from people.

Taxing gasoline will make the basic mode of transportation of goods and services expensive. Due to this, prices will rise and there will be inflation.

Points in favour of land use policies

Land use policies will encourage or incentivise people to use the land rationally. For example, agriculture land should not be used for the manufacturing purposes. Similarly, the residential areas should not have factories located there.

Land use policies will help in planning purposes. For example, the urban planning of cities etc.

Points against land use policies

It interferes with the property rights of people. For example, the land acquisition policy takes away people's right to use land in whichever way we want.