Dollars & Sense blog: Elasticity! Why cutting gas taxes won't lower prices, but will fa... - 0 views
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Energy Net on 23 Jun 08When Clinton and McCain proposed cutting gas taxes, I asked my environmental economics students, "So how much do you think drivers will save?" The students diligently Googled the numbers. "Well," said one, "the federal gas tax is 18.4 cents and the average state tax is 28.6 cents, so that's 47 cents a gallon drivers will save!" "But what about elasticity of demand and supply?" I asked. "Oh!!! Forgot about that!"