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CEO of Largest US Auto Retailer Calling for Ongoing Increases In Federal Gas Tax

5 October 2005

The Chairman and CEO of the US’ largest chain of car dealerships is calling for ongoing increases in the federal tax on gasoline in an effort to encourage conservation and alter buying patterns.

Mike Jackson, CEO of the $19-billion auto retailer AutoNation, is proposing an annual, open-ended increase of $0.10 per gallon.

After raising the issue at the Reuters Autos Summit in September (Reuters), he has subsequently written an editorial in this week’s edition of Automotive News and appeared on CNBC, campaigning for the policy.

In light of today’s high gasoline prices, if you mention that you support the idea of an increased gasoline tax, a lot of people will look at you as though you’ve been inhaling fumes. I believe that those who resist the idea are too close to “hi-test” for their own good. In fact, a gasoline tax hike is long overdue.

Since we all agree that America’s addiction to oil is an issue of national security, we need an energy policy that encourages conservation.

—Jackson in Automotive News editorial

He is also proposing an annual energy-tax credit for low-income people to provide some buffer to the increase. The increases are necessary, he argues:

...to influence consumer behavior, create a significant demand for greater fuel efficiency and justify the costs of the technology that will deliver it. ... The goal of this is not to raise taxes but to change the consumer mind-set.

[...] For the past 10 years, we’ve had what amounts to an irresponsible, unsustainable half-price sale on gasoline. That has meant little consumer demand for efficiency and greater consumer demand for supersized vehicles with supersized power plants.

Although in a clear minority, he is not alone in the auto industry.

Reuters notes that Tim Leuliette, CEO of Metaldyne, proposed a similar increase to usher in the era of hydrogen-powered cars. Leuliette thinks the current efforts on hydrogen are woefully inadequate, given the country’s addiction to oil. (Earlier post.)

Leuliette wants a $0.50 tax hike phased in between 2008 and 2012 to fund research, build infrastructure and pay for incentives to get the public to buy the new cars.

Republican congressional leaders have flatly rejected any talk of raising the federal gasoline tax to curb consumption. One aide to a senior Republican senator said “the idea is not a good one and not worth dignifying with a comment.”

“Republicans are against it and Democrats are against it—that doesn’t leave much to work with,” said Rep. Ed Markey, Democrat from Massachusetts.

October 5, 2005 in Fuel Efficiency, Policy | Permalink | Comments (11) | TrackBack (0)

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Comments


Good Idea!

Too bad it will never happen.

GasTax! How about a penny/month/gallon until we hit the goal of ending the use of oil for transportation.

Markey nailed it. A direct gas tax just isn't going to happen.

However the American people do think that we should be collectively consuming less gas. So, what to do? Improve/revise CAFE standards. That's rumored to be recently placed on the table by some republicans. Revise the MPG ratings so that they are more accurate. That's rumored to be on the table. Lower the speed limits. Nope, not going to happen, at least not on a wide scale. Increase funding in public transportation. That might happen. Tax incentives for energy efficiency improvements in the home to reduce consumption. It's happening in Massachusetts and will hopefully spread out to other states prior to this winter's higher home heating bills.


So, I believe that even republicans want the government to help reduce consumption. But, it is not going to happen with a gas tax. No way, no how.

I think CAFE can never be saved. There will always be loopholes that render it useless.

This might not be the case if a stronger CAFE meant a stronger GM ... but do the math.

I support gas taxes, and am still cycnical about them ever passing, but it is interesting that the idea seems to be building a little steam.

A simple, elegant, obvious, rational approach to fixing a lot of different problems. But this is America, folks. By the time we get around to doing something serious about consumption, we won't have an auto industry left. GM, at least, will continue to plan based on wishful thinking. After all, their strategy seems to be based on $2.00/gallon gasoline.

A gas tax provides certainty, if it is done in a way that keeps the total price well over $3.00/gallon. Without certainty, the necessary investments will not be made. Except, of course, Toyota has been making them anyway because they plan for the long term, for at least a hundred years.

Autonation is not stupid. They know that encouraging a massive shift to more efficient vehicles is in their economic interest. This would increase sales of new cars.

I would tend to support a tax that would support/enable the development of our existing oil shale/sands, which would otherwise go undeveloped with low crude prices. Of course over time, increased efficiency (and lower consumption), would trigger a raise in this tax to keep the same revenue stream, which I would not support.

I must admit that the timing is not the best but I strongly support a hefty progressive gas tax to convince users to buy more efficient vehicles and reduce oil consumption but NOT TO GIVE SUCH REVENUES TO OIL PRODUCERS to produce more oil leading to more consumption and more pollution. The revenues from a new polution or gas tax sould be used to offset the extra cost of buying hybrids and plug-in hybrids. There is nothing wrong to have the heavy polluters pay, via a higher gas tax and higher registration fees, for the damage they do.

Indeed.  The great part of a gas tax is that it would be a tax, and wouldn't flow overseas to OPEC.

I would like to see CAFE applied to all road vehicles from motorcycles to 18-wheelers. There are many easy ways to improve 18-wheeler mileage such as boattail extentions to trailers. Regulations could be changed to allow for the extra length. Since such changes are in the public interest the public should share the cost of implementation.

do buses pay fuel taxes? If so then their taxes should be dropped so as to reduce the price of bus fare, to encourage more bus use.

It's not a gas tax. It's a terrorist tax!

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