The biggest changes will be made by businesses since they are much more price sensitive than individuals. A lot of things will happen that you don't even notic

The biggest changes will be made by businesses since they are much more price sensitive than individuals. A lot of things will happen that you don't even notice Say you are choosing between 2 otherwise identical apartments that include utilities in rent. One building is more energy efficient than the other thus can charge less in rent and still make as much profit. Even though you are getting a dividend check you will still choose the lower priced apartment (if you are a rational economic actor). Multiply this scenario across the billions of economic decisions across the economy and it adds up quickly. In your specific scenario, since the initial tax is low a few pennies in added cost won't really matter, gas prices go up and down already. But you know that the price will continue to rise, so if you are a rational economic actor, the next time you buy a car you will take that into account. And by the time you need a new car the price of EVs may have declined enough to be cheaper than a new gas car, as they are predicted to be by the middle of the decade (fuel and maintenance are already significantly cheaper).