Who Wants Higher Gas Taxes? That's Ford. Bill Ford.

May 5, 2009

Ask most energy analysts how to cut US petroleum usage, and they'll point to Europe, where gasoline costs more than double the price in the States. For decades, European countries have taxed gasoline heavily, and the laws of economics work: Consumption per capita is much lower.

Now Ford Motor Co. chairman Bill Ford--that's his name on the company door--has come out and said it: To cut gas usage, it has to cost more. A lot more, like 70 percent or more. Maybe $3.50 a gallon.

In a little-noticed interview with Britain's Financial Times, Ford declined to choose between a carbon cap-and-trade system, as proposed by the Obama Administration, and direct taxes to raise the price of gasoline to consumers.

Money quote: “We clearly need – whether it’s a gasoline tax or cap and trade, it’s something we do need because with gasoline at $2 [a gallon], customer behaviour is not driving in the direction that the government would like."

As the Financial Times puts it, with British understatement, "His comments mark a clear break with the rest of the US auto industry in the depths of a financial crisis that has sapped Detroit's ability to fund a new generation of electric vehicles, hybrids, and other more fuel-efficient models."

But Ford is far from the only powerful auto-industry voice to advocate for higher gas taxes. Over the past year, he's been joined by:

Alan Mulally, CEO of Ford Motor Company, who has quietly advocated it to diverse audiences of policy makers several times in the last two years. He has also acknowledged, however, that politicians very, very rarely want to go on record voting to raise their constituents’ taxes.

Mike Jackson, CEO of mega-dealer AutoNation, who told it forcefully and directly to a conference hall packed with auto dealers at their national convention. This one sentence says it all: "Cheap gasoline combined with fuel efficiency mandated by the government is an economic disaster for America.”

Tom Walsh, Detroit Free Press columnist, who writes, “We'll know [Obama is serious about energy policy] when he spends a barrelful of political capital from his ample reservoir to get behind a fuel tax hike that will add $2 to $3 to the price of a gallon of gasoline, over time, in the United States.”

With the changing of the guard in Washington, do Americans still view taxes as instruments of repression, government theft, and the moral equivalent of bestiality? We'll learn more when the current administration unveils its long-term energy policy, probably within the next year.

Who Put Our Oil Under Their Sand?

Who Put Our Oil Under Their Sand?

[SOURCE: Financial Times; POSTER: Orange County Peace Coalition]

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