• Jan 26th 2009 at 8:10PM
  • 16
Executives of large companies by and large tend to skew toward the more conservative side of the political spectrum and generally eschew increased taxes on anything. However, a growing handful (see here) seems to be coming to the same realization of late, a realization that completely escapes most politicians: cheap gas is bad for America, especially if we want the country to move to more efficient, lower emitting vehicles.
The latest to jump on the increased gas tax bandwagon is Mike Jackson, CEO of AutoNation. AutoNation is the largest dealer group in the country with 311 franchises at 239 locations and 25,000 employees. Jackson realizes that simply mandating more efficient vehicles through either fuel economy or emissions rules without stimulating demand for those vehicles will leave his stores with a lot of stock that customers don't necessarily want to buy.

People tend to think of efficiency in relation with current fuel prices. When prices are low, they buy less efficient vehicles. Jackson is promoting an extra $1/gallon tax phased in over five years. The problem is, will any politician put their neck on the line to support higher fuel prices?

[Source: Automotive News - sub. req'd]

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    • 1 Second Ago
      • 6 Years Ago
      No one is trying to screw working 'Joe'. But they are trying to 'help' working Joe make better decisions. When gasoline cost $1/gal working Joe thought he could afford to by a Yukon or Denali. GM was all too happy to sell him a gas guzzler (financed over 6 years). If gasoline cost $2/gal Joe would have thought twice about the big SUV. If cost $3/gal he wouldn't consider it at all.

      Working Joe would have selected a more fuel efficient vehicle. Joe's vehicle would likely have a lower purchase price (and financing). In essence, Joe saves money. The government takes the extra tax revenue and wastes it on a war in Iraq . . . But under better leadership, government realizes gas taxes are regressive so they provide a check to low/low-middle income households. The rest of the funds are invested in alternative energy technology and mass transit.
        • 6 Years Ago
        "Joe doesn't need help making better decisions. Only elitist snobs and control freaks think that they need to make his decisions for him. Or force him to abide by their demands by artificial(Taxes) means.

        The average "Joe" wasn't and hasn't been buying Denalis and Yukons. The average owner has been a vapid, insecure lemming that has one because they see their favorite rap star has one in a video or it's because "Everyone else has one and to be noticed, I have to have one as well".

        Or maybe people felt they had to get one because they needed something to haul all the crap needed to make a living. I haven't seen a Prius built yet that can tow construction equipment.

        A much simpler solution would be to cut out the middleman(Govt.) and not take the money from the average "Joe" in the first place.
      • 6 Years Ago
      A higher gas tax is fine as long as the revenues are distributed equally to everyone. If the average American uses 500 gallons per year and the tax is $1 per gallon, then everyone would get $500 back every year no matter how much gas each person used that year.
      • 6 Years Ago
      The good hearted politicians are just "doing it for your own good". . Heaven forbid that they are NOT getting out of their Government furnished and paid for Limousines.

      The Russian Nomenklatura (Communist aristocracy), tried to discourage driving by the proletariat, and reserved certain highway lanes for exclusive use only for the government types, so as to speed them on their way to thier "important duties". If you buy that, I have a bridge to Brooklyn to sell to you.

      Our or any economy works best when the lowest costs for production and transport is in place. High cost of transportation finds its way into the price, of any good or service.
      • 6 Years Ago
      From an energy usage point of view, increasing the tax on motor fuels is only a partial and flawed solution. What makes more sense is a tax on carbon emissions. Why should the driver of an electric powered vehicle avoid paying a gas tax, only to recharge his/her vehicle with power generated by a coal fired power plant?
      • 6 Years Ago
      Contrary to many of the comments I fully support a graduated and large road fuel tax increase. Currently federal taxes do not even cover highway maintenance!
      I'd like to see a 2.00 per gallon increase done over 10 years, 20 cents per year as long as gdp growth was at 2 percent in that year- if we had a horrible year like this one, the tax increase would be deferred( ie it would probably take 23-24 years total to get to the $2.00 level)
      This would permit consumers, house builders, developers, truckers ,automakers and others to plan intelligently to meet the markets needs without huge dislocating swings and dips.
      • 6 Years Ago
      These guys are right.

      Regulations on fuell efficiency won't do anything if the consumers don't want to buy the fuel efficient cars.

      We need to provide incentives for consumers to purchase fuel efficient automobiles. That can't be done solely with tax breaks on hybrids.

      I am in favor of a "gasoline" tax increase without an increase in the tax on diesel.

      1. This would not increase the cost of transporting goods
      2. This provides increased revenue for infrastructure projects
      3. This would provide an incentive for people to purchase diesel automobiles in the U.S., which are more fuel efficient.

      • 6 Years Ago
      It truly baffles me the number of people who think that the government getting more of their money is a SOLUTION. Even those who post articles here. Congratulations, you have all been indoctrinated into the "Government is our salvation" camp. I do not believe a higher gas tax is in anyone's best interest, especially our Nation's!
      • 6 Years Ago
      One thing that bugs me is that no one seems to mention the fact that there just aren't enough high-gas-mileage vehicles available, and the best of the bunch is either expensive, downright ugly, or both.

      The manufacturers moan that nobody buys the fuel-efficient vehicles unless gas prices are high, so they tend to keep making the same gas guzzlers unless forced to do otherwise. If they would build something at a reasonable price with decent looks, people would buy it. Who can afford to pay $5K - $7K more for a hybrid, or $80K+ for a full electric Fiskar or Tesla?

      I hate to sound the "Build it and they will come" slogan, but if they continue building expensive and/or ugly high-mileage vehicles it will be a long, sad road to ruin. The auto industry can build good looking reasonably priced alternative vehicles if they want to. Give me some reasonable choices and I'll buy one!
      • 6 Years Ago
      T. Boone Pickens also shares that perspective, although he tries to avoid the topic so that his message on NG is not diluted. His motivation is also skewed more towards the national security
      • 6 Years Ago
      In the end the lower gas prices that we are experenceing right now are directly the result of lower demand as a result of people buying more fuel efficient cars.

      The key point is that the marginal price of oil still remains around ~$80 per barrel. So long as a oil demand remains low, we can enjoy lower fuel costs. As people use more fuel, the marginal price per barrel assures that prices will soon rise again.

      Basically what's wrong the letting people enjoy the benefits of the lower oil demand we are experiencing?
        • 6 Years Ago
        Lower gas prices in large part are not due to a sudden increase in more fuel efficient vehicles on the road. The US auto fleet is so huge, we'd need a few years of high gas prices for the fleet turn over to make a significant dent in gasoline consumption. Rapidly reduced consumption like we saw in '08 is from changes in people's habits (driving less). Even after the prices we had last summer, pickup and SUV sales have rebounded from what they were.

        The reason gas prices are low is because oil prices are low. Oil is low in large part because of the economy. The economy has caused individuals and businesses to save money where possible and reduce unnecessary travel. In many cases, less business means fewer miles driven. But in large part, oil is down because oil traders see demand staying low for the near term. That means there's continued downward pressure on oil prices. That explains why even though demand is down a couple/few percent, oil is down 50%. It's not just about current supply/demand, but speculation on what the next few months have in store for oil prices and what that return on investment is likely to be. Once the economy starts to come around and traders become optimistic that demand is coming back, oil and gas prices will go back up.

        Of course, if gas prices were to stay high for a long period of time (due to a tax or otherwise), you get both the short-term demand reduction by people choosing to drive less to save money, and a long term impact because when they do buy a vehicle, they're more likely to buy a fuel efficient model. Over 3-5 years, then you start getting enough of those vehicles into the fleet to start affecting the average.
      • 6 Years Ago
      A heavy gas tax would be a good thing if it was ALL spent toward transportation infrastructure, but present gas taxes are not all used for that purpose so why bother. I,ve been observing human nature for almost 80 active years & it hasn,t improved a bit in my lifetime.
      • 6 Years Ago
      I highly doubt that any politician will support a (potentially highly) unpopular gasoline tax, although I believe that it is the only way to fundamentally change the average Joe's behavior re: conservation.

      The political MO at work has always been to shift the pain and the responsibility away from the voter and onto the evil manufacturers that cause our addiction to oil in the first place - hence the first round of CAFE (and now it's CARB counterpart).

      I'd argue that the SUV craze would never have gotten started if we had $2-3/gal gas in the 1990's. Europe has not had a love affair with larger less-efficient cars (and have a bigger investment in public transportation) because they've decided to tax motor fuels at a significantly higher rate.

      I fail to see how we could mandate European-fuel-mileage cars without creating the environment that allowed them to bloom economically.
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