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Editorial: Obama, Dems must raise the gas tax

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  • 12/27 New York Times
    Published Saturday, December 27, 2008, by the New York Times Editorial The Gas Tax President-elect Barack Obama and the Democrats in Congress seem to have a
    Message 1 of 1 , Jan 1 11:59 AM
      Published Saturday, December 27, 2008, by the New York Times


      The Gas Tax

      President-elect Barack Obama and the Democrats in Congress seem to
      have a clear vision of the auto industry they think the country needs.
      It must be financially self-sufficient. It also must be capable of
      producing highly fuel-efficient, next-generation vehicles that can
      help the nation cope with climate change and finite supplies of oil.

      Yet for all the conditions attached to it, the multibillion-dollar aid
      package for Detroit's carmakers approved by the White House (with Mr.
      Obama's support) fails to address one crucial question: Who will buy
      all the fuel-efficient cars that Detroit carmakers are supposed to

      The danger is that too few will, especially if gasoline prices remain
      low. Therefore, it might be time for the president-elect and Congress
      to think seriously about imposing a gas tax or similar levy to keep
      gas prices up after the economy recovers from recession.

      Americans did not buy enormous gas guzzlers just because Detroit
      marketed them relentlessly. They bought them because they wanted big
      cars -- and because gas was cheap. If gas stays cheap, Americans would
      be less inclined to squeeze their families into a lithe fuel-efficient

      Furthermore, even if the government managed to convert General Motors,
      Chrysler and Ford to the cause of energy efficiency, cheap gas could
      open the door for a competitor -- Toyota, perhaps? -- to take over the
      lucrative market for gas-chuggers, leaving Detroit's automakers eating
      dust once again.

      Americans have flirted with fuel-efficient cars before only to jilt
      them when gas prices fell. In the late 1970s, for instance, they
      spurned light trucks as gas prices doubled. But as gas prices declined
      between 1981 and 2005, the market share of sport-utility vehicles,
      pickups, vans and the like jumped from 16 percent to 61 percent of
      vehicle sales in the United States.

      The recent infatuation with the Toyota Prius and other fuel-efficient
      cars could well come to a similar end. It took a gallon of gas at
      $4.10 to push the share of light trucks down to 45 percent in July.
      But as gasoline plummeted back to $1.60 a gallon, their share inched
      back up to 49 percent of auto sales in November.

      There are several ways to tax gas. One would be to devise a variable
      consumption tax in such a way that a gallon of unleaded gasoline at
      the pump would never go below a floor of $4 or $5 (in 2008 dollars),
      fluctuating to accommodate changing oil prices and other costs. Robert
      Lawrence, an economist at Harvard, proposes a variable tariff on
      imported oil to achieve the same effect and also to stimulate the
      development of domestic energy sources.

      In both cases, the fuel taxes could be offset with tax credits to
      protect vulnerable segments of the population.

      While oil prices are all but sure to rise again as the world emerges
      from recession, further tempering consumption with a gas tax would
      both slow the rise in the price of crude and steer more revenue from
      energy consumption to the United States budget, rather than that of
      oil-exporting countries.

      A bitter recession is not the most opportune time to ratchet up the
      price of energy. But if the Obama administration is to meet its twin
      objectives of reducing the nation's dependence on foreign oil and
      cutting its emissions of greenhouse gases, it needs to start thinking
      now about mechanisms to curb the nation's demand for energy when the
      economy emerges from recession in the future.

      This also would serve as a signal to American automakers and American
      drivers that the era of cheap gasoline is not going to last.
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