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Can High-Speed Rail Reduce Air Travel and Highway Expansion?

10:25 AM PDT on June 9, 2011

Well, it’s unanimous – everyone agrees the country needs a significant hike in the gas tax. Everyone outside of Congress, that is. Last week, General Motors CEO Dan Akerson told The Detroit News that a higher gas tax would help solidify the market for more fuel-efficient cars.

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Akerson told The Detroit News that, rather than have the government incrementally increase fuel efficiency standards over the next several years, "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."

"People will start buying more Cruzes and they will start buying less Suburbans," he said.

Akerson isn’t the first representative of a major U.S. automaker to come out in favor of a higher gas tax. Two years ago, as the automakers were being rescued from collapse by the U.S. government, Bill Ford, CEO of Ford, complained that demand shifted with gas prices.
"As a manufacturer, we don't like that," Ford said at a business conference. "Our ability to forecast has been just horrible," said Ford. "If gas prices are gyrating wildly, we have no idea whether we're planning right. We'd much rather have a fairly predictable level to shoot for in gas prices. That's why I think a gas tax would work for us."

Chrysler’s response to high gas prices in 2008 was quite the opposite – the company offered a guarantee of $3/gallon gas for three years for car buyers. Lee Iacocca championed a hike in the late eighties, before the last gas tax increase, but the company isn’t on record currently as supporting a raise.

The construction industry is a vocal supporter of an increase, since low revenues have hamstrung new development. Indeed, it’s hard to find anyone outside of Washington these days that doesn’t see the obvious need to raise the gas tax, which hasn’t been increased since 1993, when gas was just over a dollar a gallon.

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