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April 18, 2004

Why Detroit Likes Gas Taxes

Bush is running ads that bash Kerry for voting for a proposal that would have raised the gas tax by 50 cents a gallon:

"Some people have wacky ideas, like taxing gasoline more so people drive less."
Yeah, some people.

Like the CEO and Chairman of Ford Motor Company:

"Anything that can align the individual customer's purchase decisions with society's goals are the way to go," Ford's chairman and chief executive, William Clay Ford Jr., said, adding that his company has previously supported a 50-cent increase in gas taxes.
And the head of General Motors:
"If you want people to consume something less, the simplest thing to do is price it more dearly," [Chairman and chief executive of G.M] Mr. Wagoner said.
Detroit likes gas taxes better than fuel economy standards. And Detroit is right.

It makes little sense in the abstract to tell Detroit to make cars that average a certain efficiency-- if some customers want gas guzzlers, it just encourages tricks (like the SUV exception) to evade the averages.

Of course, Detroit leaders can talk about gas taxes because they know they won't pass Congress, so it's easy for them to promote the best solution (that won't pass) in hopes of derailing a useful-but-not-as-good solution like fuel efficiency standards.

But when Bush attacks gas taxes, let's remember that he's anti-business and trying to undermine the auto industry. At least that's what Detroit's auto executives seem to be saying.

Posted by Nathan at April 18, 2004 09:21 AM