Council on Foreign Relations calls for higher gas tax

A report from Council on Foreign Relations calls for the U.S. to raise gas taxes in effort to curb oil demand. Such a move would also help the country formulate a better foreign policy.

A nonpartisan group of industry and government experts put out the report that urges Washington to introduce a "substantial federal exise tax" on gasoline and tighten the CAFE standards. John Deutch, a former director of the CIA and task-force chair said, "You can't simultaneously enjoy abundant energy, low-cost energy, and energy that comes from other parts of the world."

There is no suggestion on how the gas tax should be set, but estimates say a $1 per gallon would reduce demand by 3-6 percent over the first few years. The U.S. currently claims 25 percent of the world's oil consumption even though it has only 4.6 percent of the world's population. The country imports 60 percent of its oil, which puts the U.S. in stiff competition with other growing importers such as China and India. Two-thirds of the oil used in the U.S. is for transportation, and 60 percent of that is used for personal vehicles.

If memory serves, didn't Lee Iacoca suggest a 50-cent gas tax in the '80s but Pres. Reagan rejected the idea?

[Source: Reuters]