I know it. The government knows it. And so does General Motors CEO Dan Akerson, who joins proponents seeking a higher gas tax. Akerson thinks the tax should be at least $1 a gallon. What do you think?
This isn’t the first time a GM executive has called for a higher gas tax, and Akerson’s reasoning is that a higher gas tax will push more consumers into more fuel efficient cars. Whereas three years ago, when most automakers were still riding the SUV party train, a higher gas tax was completely out of the question, the Detroit Three have completely revamped their lineups to offer more fuel efficient vehicles (well except for Chrysler, which still has a ways to go.)
Given the choice between higher government mandated MPG ratings or a higher gas tax, Akerson and many auto executives would prefer the higher gas tax. I‘m not sure consumers feel the same way, though the reality is we are going to end up paying more to get around either way. If government mandated MPG ratings go up to 62 MPG, it will add anywhere from $800 to $10,000 to the cost of a car. Or you bump the federal gas tax, currently at 18.2 cents per gallon (as it has been for the last 20 years) immediately up to 50-cents per gallon, and from there creep it up to $1 per gallon for gasoline. At least that is what Akerson would like to see, and I wouldn’t mind it either, even though the “breaking point” for many Americans is closer to $7 a gallon.
Of course, convincing consumers and politicians that a higher gas tax is what this country needs right now, as we trudge through a “double-dip” recession, is an uphill battle to be sure, and it is unlikely to happen unless President Obama wins reelection, and not one second before then. And even then, such a tax is likely to push many small businesses to the brink of insolvency.
Then again, our much-neglected infrastructure system could really use the money, as could American automakers, who are now offering world-class small cars that are getting better and better fuel efficiency. And as counter-intuitive as it sounds, a higher gas tax means lower economic vulnerability to fluctuations in crude oil prices. Like Akerson, I believe that was as a country really need to weigh the costs versus the benefits of our cheap gas prices. Of course, this requires having a “grown up” conversation in Washington D.C., and I don’t see that happening until after the next election.
So let me ask you readers, how high do you think the gas tax should be? Is $1 a gallon too much, not enough, or just right?
Reprinted with permission from Gas 2.0