Hike the Gasoline Tax?

Auto dealer argues in favor of higher prices

Published in CSP Daily News

NEW YORK -- As most of the nation cries out against increasing gasoline prices, at least one business executive is espousing the idea of increasing the federal gas tax.

Gradually hiking gasoline taxes would create the demand for greater fuel efficiency, Mike Jackson, CEO of AutoNation, the nation's largest car dealer, commented in Automotive News, according to CNN/Money.

The truth of the matter is: If you want people to smoke less, you tax cigarettes, Jackson wrote in his commentary piece. If you want them to drink less, [image-nocss] you tax alcohol. Guess what you should do if you want them to consume less gasoline? That's right: Tax gasoline.

With gas prices rising above $3 a gallon, consumers have been more conscientious about their gas use. But, Jackson said, prices need to reach $6 a gallon to have the same effect on consumer behavior that they did when they reached their peaks in the 1970s and 1980s.

In the report, he proposes a gradual increase of 10 cents a gallon a year on the federal tax on gas, which has been unchanged at 18 cents a gallon for more than a decade. The goal of the proposal is not to raise taxes but to change the consumer mindset, he argued.

Critics say raising the price of gas would put a disproportionate burden on the poor, but Jackson proposed an annual energy tax credit for those whose incomes are below a certain level.

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

[What do you think about Jackson's proposal? Log on to the CSP Discussion Board and let us know.]