• Nov 4th 2009 at 7:59PM
  • 78
How often do the Wall Street Journal, Bill Ford, Jr. and Thomas Friedman agree on something? When it's the gas tax, it's 100 percent of the time, and now a number of auto executives have added their voices in favor of a gas tax in order to reach the end goal of getting more fuel efficient vehicles into use.

Speaking at the Reuters Autos Summit in Detroit, people like Jerry York, a former GM board member, and Mike Jackson, chief executive of AutoNation Inc., said that setting the price of gas at at least $4 a gallon would be a better way to get Americans to use less gasoline than giving out billions in loans and grants to develop new, more efficient technologies. Only with some pain at the pump, Jackson said, will car buyers care about fuel efficiency, adding that the best way to set the price floor would be with gradual gas tax increases until the $4 or $5 price limit is reached. Tim Leuliette, chief executive of supplier Dura Automotive, suggested that $8/gallon should be the target by 2020, stressing that the increases need to be telegraphed far in advance so that automakers and buyers can prepare for them. Rebates or other assistance for low income families should also be considered, the executives said.

Of course, any politician who pushes hard for these increase will likely face tremendous opposition and criticism, but these guys are making sense. How is it that the auto industry is so far ahead on this issue?

[Source: Forbes]
Photo by functoruser. Licensed under Creative Commons license 2.0.

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    • 1 Second Ago
      • 5 Years Ago
      This is in no way a good idea. I have no idea how anyone could find it appropriate to increase fuel prices on people in order to force them to purchase a new car. Most people don't buy new cars because, get this people, they can't afford one. If everyone could buy a brand new hybrid/electric car versus their SUV they bought in 2000, don't you think they'd buy one? It's not only SUVs that would be punished though. Even I would. I own an older Honda that gets about 26 combined mpg. Now, it doesn't eat gas like Ruffles, but it definitely doesn't get the best fuel efficiency, and if i had to pay $4+ for gas, I'd just say screw it and commute on my bike. These proposed ideas are being proposed by the auto industry not because they want to save the environment and our gas, but they just want us to buy their cars. And this, my friends, is called extortion.
      • 5 Years Ago
      Julius and Tohe,

      I agree with each of you.

      Europeans place more importance on fuel efficiency when choosing a car. They have to. More than 50% of them drive the more efficient diesel burners, which are not even available in the USA. It's the diesels that bring up the average mileage number. (Note: a barrel of oil will produce 1/3 barrel of gasoline and 1/3 barrel of diesel fuel. If we all burn diesel, who burns the gasoline?)

      Europeans that can't afford cars make use of public transportation. It's much easier to get around in Europe using public transportation (nice integration of buses and trains). Surprisingly though, public transportation is still very expensive. Much more expensive than just driving your car in the USA.

      However, with all the incentive in Europe to improve mileage, automobile technology development until recently was just sort of sharpening the razor. And, as I mentioned, the thrust was to improve CO2 emissions. Watch what happens over the next 10 years! With all the government money in the picture, and with the governments targeting new technologies with the money, we'll see some real change.
      • 5 Years Ago
      I guess big business doesnt have a problem with tax hikes as long as they are on the consumer, thats the little detail all the teabaggers dont seem to get, they arent getting it at all, yet they continue to support giving filthy rich corporations huge tax breaks, while they themselves get handed the bill for all the pollution and failed scams that US industry is now world famous for, I wish they had enough brains to not get this confused, they play into the hands of the disgusting monsters that masquerade as republican representatives in our government who each and every day race to hand our natiional treasure and prestige into the hands of their even more vile and amoral corporate masters
      • 5 Years Ago
      There was a time when I was a big proponent of high gas tax. That was back around, say, 1992 when Paul Tsongas was running for president and calling for such a tax. Back when it might have really done some good. It might have curbed some of the worst excesses of the SUV era.

      Now we've gotten to a point where I'm pretty ambivalent on the subject. We're rapidly approaching a point where fuel demand will begin to outstrip supply, which will trigger a series of price shocks. That will make a big gas tax politically and economically infeasible, not to mention redundant in terms of influencing behavior.

      The real effort now needs to focus on making alternatives cheaper, not making gasoline more expensive.

        • 5 Years Ago

        I need a place to burn my old tires. The cheapest place to do that is just upwind from your house. That's the free market.
        • 5 Years Ago

        Free market does not mean you can pollute your neighbors land and that there will be no negative consequences for your actions. Government regulation stifles the rights of the very people they are intended to protect by setting a mediocre standard but go ahead ignore me and keep drinking your statist kool-aid.
        • 5 Years Ago

        @ chinb96629

        The idea that current prices are real free market set prices is a myth.

        • 5 Years Ago

        "Free market does not mean you can pollute your neighbors land and that there will be no negative consequences for your actions."

        What would be the negative consequences? Also, I'd be polluting the air (and maybe water), not his land.
        • 5 Years Ago
        Allow the free market to price gasoline, not government action thru taxation. Taxation on one commodity but not others has always distorted the economy and caused misallocation of capital/resources. Put your faith in free market than big government bureaucrates.
      • 5 Years Ago
      yeah maybe if we jack up the prices on food ppl will eat less...hell y not price food ridiculusly so that ppl will stop eating alltogether and die off so that they wouldnt cause global warming in the first place??....
      • 5 Years Ago
      It would help if we actually *had* some EVs/ER-EVs to buy. Once they start coming on the market, it won't take too long before prices on them start coming down, and they will filter down into the used car market. Strong rebates for the first few years will go a long way towards making that happen, and reducing our oil consumption and pollution in the future.
      • 5 Years Ago
      The first mistake here is to use the word "tax". Lets instead advocate for higher tariffs on foreign oil.

      The first step is to ask Governmental agencies to claim and justify their stake on foreign oil tariffs. Obviously a ceiling would be imposed, but this would help distribute profits in an adequate manner among the different involved agencies (EPA, DOD etc)

      Secondly we would balance the National budget to reflect the increased funding from foreign oil tariffs and pass on these savings to the American people in the form of tax breaks.

      By pursuing a coordinated, well thought out strategy, we could actually put more money in the pocket of Americans, but more importantly give them a choice as to how to spend it. So far we have ignored the true price of Gas and continue to pass the bill to our children and this has to stop.
        • 5 Years Ago
        Bump @ Tohe

        "By pursuing a coordinated, well thought out strategy, we could actually put more money in the pocket of Americans, but more importantly give them a choice as to how to spend it. So far we have ignored the true price of Gas and continue to pass the bill to our children and this has to stop."

        • 5 Years Ago
        Bump X 2 on Tohe...

        Awesome idea except that the United States is still a powerhouse when it comes to the refinery industry which refines imported oil and actually exports refined gasoline. If the goal is to promote the adoption of next generation vehicles there would have to be some consideration for enabling our refining industry to maintain a competitive advantage on foreign oil refiners and possibly increase its exports in the face of falling consumer demand.
      • 5 Years Ago
      Please don't go the Euro route, of subsidising well fare through non related taxing. Just charge the price of CO2 in petrol. Peanuts, anyway.
        • 5 Years Ago
        So what is your solution?
      • 5 Years Ago
      Auto industry execs calling for raising taxes on fuel are those who would benefit directly and personally. It's really just another way to get taxes out of poor people who can't afford to upgrade their transportation. Incentives are a better idea. Raising taxes is a bad idea, especially in a weak economy.
      • 5 Years Ago
      Unless fuel choice is a standard feature in cars, taxing gasoline is simply punishing human movement, activity, and aspirations, especially blue collar workers who need to drive to work or for whom driving is part of their work, because people are locked in and have no choice but to buy gasoline regardless of the price. Gasoline demand is highly inelastic and price-insensitive; usage continued to rise throughout the 2000s despite the price having risen severalfold.

      Only when there's a critical mass of cars on the road that can run on alternative fuel rather than just gasoline will a gas tax help push people to using alternative fuel.

      That critical mass can be achieved by a simple government mandate that all new gasoline cars sold in America be fully flex-fueled, able to run equally easily on any alcohol fuel (methanol, ethanol, propanol, butanol) as on gasoline. This technology has existed for over a decade now and is rugged, refined, and reliable. And it costs only $130 per car for automakers to add.

      With alcohol compatibility a standard feature like seatbelts, THEN comes the time to start heavily taxing gasoline - at that point people will just start buying alcohol fuel in droves, which will become routinely available as gas stations race to undercut each other or avoid being undercut.

      Until then you're just brutalizing the helpless.
      • 5 Years Ago
      @ polo

      you can't be serious. you really think that doubling of the price of gas would have more of an impact on the economy than a doubling of income tax?

      it just is not the case.

      If America has to get its tax revenue from somewhere (which it does- we have a huge deficit), taxing gasoline has far less economic impact than taxing income, payroll, capital gains, etc... Currently, tax revenue from other aspects of the economy (which are far more essential to economic success) is going to pay for infrastructure and subsidies associated with gasoline consumption- creating an artificial market that incourages more consumption. Gasoline should at least be taxed enough to cover those expenses and should by no means be taxed less than the top tax bracket.
        • 5 Years Ago
        To think about it another way... economies existed before the use of gasoline. However, no economies exist without labor or employment.

      • 5 Years Ago
      Seems like the same conclusions we reached last time. Raising gas taxes will still cause incredible amounts protest and aggravation. We can argue the economic points, but the practical issue is the public probably won't accept it. Maybe we should go the other way. End subsidies for the oil industry. It'll still raise gas prices, but more naturally. It'll satisfy the "free market" people and the public can't really complain. And also adjusting the gas prices so they can pay for the repair of roads would be a fair measure to slightly increase gas taxes (though this is typically done on the state level).
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