General Motors Co. CEO Dan Akerson wants the federal gas tax boosted as much as $1 a gallon to nudge consumers toward more fuel-efficient cars, and he’s confident the government will soon shed its remaining 26 percent stake in the once-bankrupt automaker. …
And while he is eager to say goodbye to the government as a part owner of GM, Akerson would like to see it step up to the challenge of setting a higher gas 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 gas-mileage standards.
“There ought to 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.”
By taxing production, Akerson refers to the effort to raise the CAFE standards for average fuel efficiency. The Obama administration wants to push US automakers to stop producing so-called gas guzzlers, pushing the average efficiency to as high as 62 MPG by 2025. Akerson says that will add $3500 to the average price of cars, which will put US automakers in poor competitive position against their imported competition.
That argument has two problems. First, politicians will continue to tinker with CAFE standards regardless of tax policy, so Akerson’s trade wouldn’t be a trade at all — it would be an additional cost on top of the financial and safety tradeoffs that come with increased CAFE mandates. Second, the problem in this case isn’t which government intervention to demand but the government mandates themselves, on a cost issue that should be regulated by consumer demand. When gas prices rise, people will look for more fuel efficiency without government either stripping consumers of choice or taxing them into oblivion.
Besides, this is hardly the environment in which to demand a gas-tax hike. Drivers have already gotten sticker shock from skyrocketing costs at the pump — and at the grocery store. Akerson seems to be blissfully unaware that while CAFE standards impact costs in his industry, gas tax hikes impact costs throughout the entire distribution chain. Gas prices have a multiplying effect as they impact costs of bringing all goods to market, especially food. Consumers are already seeing their declining buying power erode even faster due to escalating fuel prices and an insane government policy that keeps America from exploiting its own resources to bring more supply on line and stabilize the markets.
Rather than solve the actual problems, Akerson defaults to piling more taxes on consumers as a solution. Maybe consumers should keep that in mind when considering GM for their next transportation solution, too.