GM CEO Wants $1 Federal Gas Tax Hike

Published in CSP Daily News

Akerson believes increase would "nudge consumers toward more fuel-efficient cars"

DETROIT -- General Motors Co. chairman and CEO Dan Akerson wants the federal gasoline tax boosted as much as $1 per gallon "to nudge consumers toward more fuel-efficient cars," he told The Detroit News. He said would like to see the federal government step up to the challenge of setting a higher gasoline tax as part of a comprehensive energy policy.

A government-imposed tax hike, Akerson believes, will prompt more people to buy small cars and do more good for the environment than forcing automakers to comply with higher mileage standards.

"There ought to [image-nocss] be a discussion on the cost versus the benefits," he said. "What we are going to do is tax production here, and that will cost us jobs."

For the years 2017-25, federal officials are considering 3% to 6% annual fuel-efficiency increases, or 47 miler per gallon to 62 mpg. That could boost the cost of vehicles by up to $3,500.

"You know what I'd rather have them do--this will make my Republican friends puke--as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas," Akerson said. "People will start buying more Cruzes and they will start buying less Suburbans."

With gasoline already over $4 per gallon in parts of the country, a higher gasoline tax is a hard sell, said the report.

Rebecca Lindland, an analyst with IHS Global Insight, said higher gasoline taxes in Europe did lead consumers to buy more fuel-efficient cars. But she acknowledged that is virtually impossible to see in the United States. "It's career suicide for a politician to call for raising gas taxes," she told the newspaper.

Akerson is not the first auto exec to float the idea of a gasoline tax increase to encourage consumers to buy fuel-efficient vehicles. Ford Chairman Bill Ford Jr. has previously advocated a gasoline tax increase.

On Monday, a Ford spokesperson told the paper that the company "will leave the policy decision to Congress"; in 2009, GM CEO Rick Wagoner called a higher gasoline tax "worthy of consideration."

Separately, Georgia's gasoline tax is going up for the second time in two months, reported WSB-TV. The state refigures the gasoline tax at least twice a year--in January, July and whenever prices go through a dramatic swing up or down.

Price swings brought the state's 4% fuel tax up three cents last month. This week, state officials notified gas stations that the upcoming hike will bring the tax to 14.5 cents.

State fiscal economist Ken Heaghney said by law, the state's 4% sales tax gets figured on a periodic snap shot of average gasoline prices. Unfortunately for drivers, the tax department figured the average weeks ago, when pump prices were still in the $4 range, the report said, so the tax is going up even though current prices are down.

Two years ago, the gas tax was only eight cents a gallon, but the tax has since ballooned. Next month's new rate represents a 45% increase in the past year, an 80% increase since the summer of 2009, said the report.

According to the law, stations and their suppliers have to get plenty of notice when the tax changes. That is why the department of revenue looks at prices so early when figuring the new rate.

"We just implement the law as written," Heaghney told the paper. He said it works in reverse too. When the prices come down during the snap shot period, the tax goes down.