Wagoner: Gas tax hike is "worthy of consideration"
by Jeremy Korzeniewski on Mar 18th 2009 at 3:29PM 
Count General Motors' CEO Rick Wagoner as one proponent for a raise in the federal gas tax. While the idea seems like political suicide for any legislator willing to jump on board, hiking the gas tax up so that a gallon of gas hovers around the $4.00 mark could have a few desirable effects, notably influencing consumers to purchase fuel efficient vehicles and funding road improvement projects that are currently out of cash.
Last summer, when fuel prices were at their record peaks, interest in hybrid vehicles and smaller cars was also at an all-time high. With the introduction of the Chevy Volt tentatively scheduled for late 2010, perhaps it's not so surprising to hear that GM, once a major detractor of artificially high fuel prices, is now singing a new tune.
Still, it seems unlikely that the government would raise the gas tax in the midst of a recession. After all, it's much easier for legislators to direct a mandate at automakers to produce more fuel efficient vehicles without worrying about whether consumers will be motivated to buy them.
[Source: Washington Times, Photo by Bill Pugliano/Getty]
Reader Comments (Page 1 of 4)
Fritz 3:41PM (3/18/2009)
That's such BS. Give us a clunker earmark and billions of dollars, and we'll propagandize new taxes! I don't remember the road, or anything for that matter, getting any better when gas was higher or when people were using more of it. How about cutting these projects altogether, and doing their damn jobs. I saw 6 people clearing brush and picking weeds from the center divider, and not one single road in town is being repaved.
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David 3:38PM (3/18/2009)
Moron. Same for Ford's CEO. The only reason they think this is a good idea is so that the market is "manipulated" into needing all the hybrids that are currently collecting dust on car lots and also to "ensure" that the money they are spending on the Volt and other technologies won't go to waste. The market should dictate the price of gasoline, not the government. If Rick Wagoner wants to spend extra on his gasoline, be my guest. He can give them the extra out of his own pocket. Both he and the government can keep their hands out of mine!
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ksmith 4:59PM (3/18/2009)
David said:
"Moron."
The same could be said about yourself. When gas is $3/gal, it creates a natural subsidy for alternative energy sources. With these market-driven subsidies in place, the government doesn’t have to fund the alt energy R&D to the extent that it does now. More money coming in, and less going out. Sounds like a win-win for the government, not to mention the reduction in foreign oil.
But what about Joe Consumer? He might feel a pinch for a little bit, but it’s not as bad as what the media will have you believe. Pretty soon he’ll be buying a more fuel efficient vehicle. I’m not saying that he’ll buy a smaller or less capable vehicle. On the contrary, the technology will have advanced so that he gives up nothing, and gains fuel efficiency. Joe wins in the end.
But you say, “this new vehicle will cost him more because everyone says the new tech doesn’t come cheap”. And you’d be right, but between the money coming in, and the cash they’d be saving, the government could step in and help offset this cost for the first generation or two of vehicles until the costs fall to current levels. Even the working folks who depend on trucks to making their living could be given tax breaks to offset their tax increase at the pump.
As they like to say, the devil is in the details. But this plan is solid as any that I’ve ever heard.
Rick 5:06PM (3/18/2009)
Moron is right. $4 gas helped set off the current recession. Going back to $4 will not only further flame our current economic crisis but could deter any kind of growth while causing further hardship on the working class.
Ford just needs to work with the unions to put out less expensive cars that people want to buy. Make hybrids CHEAPER and people will buy them. His solution to to force...er, extort, er....squeeze anyone who works and drives to buy a car STRICTLY because it's a hybrid? Moron is right.
Julius 5:14PM (3/18/2009)
I'd call the OP moron, rather than Wagoner. Wagoner's stating the obvious - and something that others outside of the beltway have been saying too. Cheap gas = people wanting to buy SUV's. That's the way it's been for decades. If you want people to buy more efficient cars, then you need to create an incentive for them to do so.
Lutz said for years - to wit: enforcing higher MPG standards is like enforcing weight loss by mandating sales of small sized suits.
It's only the political side that says we can't use a gas tax to change behavior - because taxes are evil (even though that's how we've been changing behavior for years). And don't tell me tax laws aren't used to change behavior - cigarette taxes, alcohol taxes, tax changes to encourage corporate R&D, 401k/403b/529, mortgage deductions, charity deductions, etc...
fixitfixitstop 5:24PM (3/18/2009)
"$4 gas helped set off the current recession."
Only because people stretched their resources the max. If more people had car and home loans within reason....but no...we can't ask people to be fiscally responsible.
Sea Urchin 7:35PM (3/18/2009)
fixit.....if Americans will start living within our mean.......then terrorists will win.
Frylock350 8:17PM (3/18/2009)
High gas prices don't make Americans want fuel efficient cars. It makes them reluctantly buy a fuel efficient car they hate.
Polly Prissy Pants 10:26AM (3/19/2009)
"The only reason they think this is a good idea is so that the market is "manipulated" into needing all the hybrids that are currently collecting dust on car lots and also to "ensure" that the money they are spending on the Volt and other technologies won't go to waste."
No, not really. At $4/gallon we're only beginning to truly pay the total cost of acquiring and burning that gallon of gas. When you add it all in (pollution, war, urban sprawl, etc) even $4 is cheap. If you had to really pay the true cost of that gallon of gas you'd probably fall over faint.
And no, the costs of gas had nothing to do with the current recession.
Mazda FTW! 3:39PM (3/18/2009)
"After all, it's much easier for legislators to direct a mandate at automakers to produce more fuel efficient vehicles without worrying about whether consumers will be motivated to buy them"
*Claps*
And hence the reason why I laugh whenever I see corrupt businessmen answering questions during a hearing on the Hill.
The pot calling the kettle...
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notYou 3:48PM (3/18/2009)
If raising taxes so that the cost goes from $2/gal to $4 is good, then surely to $5, $8, $10 or higher must be better, right?
Just like Fed "recession fixing!" spending - I mean, if we're going to spend ourselves out of a hole with $1trillion (???) and that still has only a 30% chance of succeeding (per Joe Biden, and that's only if we get everything perfect) then why not go whole hog and spend $2T, or $3T, $10T!!! or more and just be done with it?
I'll tell you why - because it's bogus.
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Ken Stamper 5:45PM (3/18/2009)
"If raising taxes so that the cost goes from $2/gal to $4 is good, then surely to $5, $8, $10 or higher must be better, right?"
Well, yes actually
apearlman 7:44PM (3/18/2009)
Oh, give me a break.
"If raising taxes so that the cost goes from $2/gal to $4 is good, then surely to $5, $8, $10 or higher must be better, right?"
I'll pass this advice on to your doctor next time he/she prescribes pain medication for you. After all, if one dose of Oxycontin is good, then surely 5, 8 or 10 must be better, right?
No one is advocating a $10 per gallon federal tax. But it ought to be higher than it is right now, 18.4 cents.
JZeke 3:41PM (3/18/2009)
Why is the CEO of one the most beleaguered auto companies advocating a tax increase now? Had he mentioned this a year ago he could've been seen as somewhat revolutionary, but now its ill-timed at best. The public message should be focused on the strides GM is making across the board to improve fuel economy, not attempting to get into the politics of taxation.
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why not the LS2LS7? 4:18PM (3/18/2009)
He did mention it a year ago. And before that. Lutz used to harp on this all the time.
JZeke 5:08PM (3/18/2009)
Thanks for the heads up LS2, wasn't aware.
Dude 3:43PM (3/18/2009)
What? Taking my kids money to help prop up your failed business wasn't enough?
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Librapaj 3:49PM (3/18/2009)
I have CEO translation skills and I will go ahead and let you know what he truly meant...." I think that by raising the gax tax, people will look to our hybrids and grossly over-priced electric vehicle that will soon be on the road. The more expensive the tax and gas, the more people will want to buy my companies cars and therefor, I will continue to make money for ruining an American icon."
Mind you, I am not too good at translation and this is only a loose interpretation.
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Chris 3:51PM (3/18/2009)
I liked the SNL skit, they really did hit the nail on the head when they had their Congress person state "We set higher mileage requirements, we did our part when are you going to do yours?"
Sorry, but the only reason to set a floor price using taxes is to make local production of crude oil more viable thereby reducing our foreign dependence. You don't do it to get people to buy more efficient cars.
That being said, any raise of fuel taxes would probably be laden with pay backs to people who don't drive let alone drive enough to deserve the offsets they would get as politicians would see a new income redistribution method instead of what it should be for - getting us off foreign oil.
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Swede 3:51PM (3/18/2009)
About time you guys catch up.
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