The following appeared as part of an article in a weekly newsmagazine:“The country of Oleum can best solve the problem of its balance of trade deficit by further increasing the tax on itsmajor import, crude oil. After Oleum increased the tax on imported

The argument is presented in a news article of weekly magazine. The author argues that the country of Oleum can balance the trade deficit by increasing the tax rate on crude oil. Four months back, Oleum increased the tax on crude and consumption of gasoline reduced by 20 %. Hence, one more significant increase in tax on crude will solve the trade deficit issue. The argument is based on weak assumptions without going in depth of the issue.

Firstly, the author is assuming without giving any evidence about the co-relation between gasoline consumption and the increase in taxes. No information is provided in respect of tax quantum increased. The relationship can not be compared if only consumption figure is given but not tax increase figure. The co-relation can not be established without figures. There could be other reasons which might have affected the decrease in the consumption of gasoline. 

Secondly, the author is basing the conclusion assuming that the consumption will reduce once again if the tax is increased again substantially. However, the argument is just concentrating on the trade deficit as the biggest issue to be solved. The author needs to discuss how the increase in prices of gasoline may affect the inflation for the economy. Development and flourishment of the economy should not be jeopardised. Gasoline is an essential commodity for a country and if increasing the taxes is increasing the gasoline prices, the inflation will go up leading to a disaster.

Economy of a nation is a complicated matter which may affect millions or billions. The author need to present evidence, about its recommendation and discuss in detail how it may affect the other pillars of the economy.