One of his reasons harkens back to our discussion of tax incidence in Unit C:
Tax incidence. A basic principle of tax analysis -- taught in most freshman economics courses -- is that the burden of a tax is shared by consumer and producer. In this case, as a higher gas tax discouraged oil consumption, the price of oil would fall in world markets. As a result, the price of gas to consumers would rise by less than the increase in the tax. Some of the tax would in effect be paid by Saudi Arabia and Venezuela.What do you think of his argument? If you agree, what is the most convincing aspect? If you disagree, is there a better alternative?