General Motors vice chairman Bob Lutz said the U.S. government should gradually increase taxation on gasoline to force consumers into smaller, more efficient cars. “I’d say the best thing the (U.S.) government can do is to raise the gas tax by 10 or 15 cents a year until it reaches European levels,” Mr. Lutz told the Wall Street Journal at the Paris Motor Show.
“In Europe people buy $30,000 Golfs,” Lutz said. “People are willing to pay lots of money for extremely well equipped, fuel-efficient cars.” Lutz said higher gas prices would help accelerate the transition to alternative fuels and cleaner forms of propulsion.
Lutz also says he thinks Americans have learned their lesson about buying fuel-thirsty vehicles, even if gas prices fall well below $2.00 later this year. “Three months from now if gas is $1.60 a gallon, people are not going to go rushing out to buy 400 horsepower SUVs,” he said. “People now have understood the concept of volatility. People will hedge their bets.” [Full WSJ story - registration required].
