Finance Globe

U.S. financial and economic topics from several finance writers.
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GM CEO Suggests Raising Gas Tax

As if overburdened taxpayers and underemployed consumers aren’t already paying enough for decisions made by big business - the head of one bailed-out company thinks Americans should pay even more, according to a report by The Detroit News.

General Motors CEO Dan Akerson told the paper in an interview that he wants to see the federal gas tax raised by as much as one dollar a gallon to steer consumers towards buying more fuel-efficient vehicles - rather than forcing his industry to comply with higher fuel-efficiency standards.

By 2025, government regulations may force automakers to meet fuel economy averages of 62 miles per gallon. "There ought to be a discussion on the cost versus the benefits," Akerson said. "What we are going to do is tax production here, and that will cost us jobs."

"You know what I'd rather have them do — this will make my Republican friends puke — as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas," Akerson said.

Akerson said he is grateful the government saved the company from bankruptcy with a $49.5 billion bailout, but that the relationship is wearing on GM's stock price. Akerson said he hopes the government sheds its remaining stake in the company in the next six to twelve months, declining to say whether GM would buy back its own stock.

Akerson’s gas tax comments come at a time that may not sit well with many Americans. The national average price of regular gas is currently $3.76 a gallon, according to the AAA Daily Fuel Gauge.

Fueling up to get to work already puts a noticeable dent in consumers’ budgets. Add the high cost of gas to the ever-increasing costs of food and other necessities, and multiply that by high unemployment rates and dropping property values. Then factor in the difficulty for many to gain the credit needed to purchase a new, fuel-efficient automobile.

Rebbecca Lindland, an analyst with IHS Global Insight, said higher gas taxes in Europe did lead consumers to buy more fuel-efficient cars. But she acknowledged that's virtually impossible to see in the United States. "It's career suicide for a politician to call for raising gas taxes," Lindland said.

From The Detroit News:
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Tuesday, 05 March 2024

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