More Argument For Permanently Higher Gas Prices in the U.S.

Posted by: David Kiley on June 1, 2007

As comments on this blog attest, I have been taking a beating for pointing out that gas prices need to go higher yet in order to get American consumers to migrate in big numbers to more fuel efficient vehicles.

My point has been that the European model shows us that it takes sustained higher gas prices to get people to make permanent changes in their buying and driving behavior.

Cars. com reported today that searches on its site for hybrids and other fuel-efficient vehicles gained significant momentum in the month of May as gas prices continued to break record highs.

Three hybrid models - the Toyota Camry Hybrid, Ford Escape Hybrid and Toyota Prius - all top the list of new cars experiencing the greatest increases in search activity on Cars.com, with each vehicle’s search numbers increasing by at least a staggering 52 percent over April. The Toyota Prius also cracked the list of the top 10 new cars with the most searches on Cars.com and now ranks second among cars generating the most email inquiries to dealers. On the flip side, of the new cars experiencing the largest decreases in searches, seven of the top 10 are trucks or SUVs.

“The more that gas prices rise, the more consumers start doing their homework on fuel-efficient cars available on the market,” said Patrick Olsen, managing editor of Cars.com. “Fortunately, there are more hybrid models to choose from in 2007 and more coming in 2008, including eight hybrid SUVs.”

Judging from some of the angry posts and e-mails I have received, some of what I previously posted has gotten lost in the reading. If we tax gas higher, the money can go to offsetting higher prices to lower income households by way of payroll tax reductions (more take home pay, not an end of year refund,) as well as to incentivizing the expansion of alternative energy infrastructure and investment. Every time gas prices rise now, the increase just means more profit for oil companies and more petro dollars for oil producing countries that are mostly hostile to America’s interests.

Reader Comments

Brendan Moore

June 1, 2007 1:46 PM

Most Americans, and America itself, would be much better off with a large increase in gasoline taxes and a small decrease in their income tax rate.

Speaking for myself, I would gladly make that trade, and I am certianly not in a high-income bracket.

B Moore - Autosavant.net

autoshows

June 4, 2007 5:07 AM

Steve

June 5, 2007 10:19 PM

So we trade the profits for big oil for upsizing the government? Not much of a difference in my book. And you actually trust that the additional revenue would make it down to the $40,000 bracket?

In my case, the car I drive is based on my choice of a used car, a choice I made 6 years ago based on what I could afford. Higher gas prices won't send me running to purchase a new hybrid that will depriciate faster than I can pay for it. It will only further curtail my spending in other areas.

How about a tax based on BMI? Overweight people cause more energy to be utilized in transportation, food production, and health care, and it's something everyone can do something about (me included).

Hooper

June 7, 2007 10:55 PM

If you love high gas TAXES so much why don't you move to Europe! As far as I understand the constitution of the United States of America, Individual freedoms were/are the priority!
There are plenty of high mileage cars for you to buy if you choose to. I drive a 1976 Ford pickup, gets 9 miles to the gallon, because I choose to! God Bless America!

Jeremiah

June 8, 2007 12:34 AM

We do not need higher gas taxes. We need to stop subsidizing the oil companies and the auto makers.
No more bail outs for companies that go belly up, cut the chords on the golden parachutes to fund the retirement obligations. (I digress, but when did either doing your job or losing money for your company begin to warrant a bonus?, and where do I sign up for that pay plan?)

If the government is to be involved, it should be requiring fuel efficiancy and low emissions, 40+ mpg on new vehicles and CA emissions as a minimum standard. The technology is already here. Of course, that would require our politicians to do something other than talk and point fingers.

People buy what they are told they want. Any good salesman will tell you the same. If you need proof, just look to any major companies advertising budget. Why else spend so much money on super bowl ads? How did those sporty, go anywhere, SUV's become so popular? Advertising.

People are not downsizing their vehicles, or trading in for better fuel efficiency in droves because most vehicles on the market simply don't get great gas mileage. There are only a handful of options if you want to really improve on the gas mileage most people already have, and for most it just isn't enough to justify the additional cost.

Gerald Harris

June 8, 2007 10:17 AM

Solve hi gas prices -- produce just the mid grade -- year round. the other two pumps Flex fuel

Lyndsey

December 6, 2007 12:48 PM

Solution for prices is...
Stop using that large vehicle! buy a small compact car and keep a hauling car around (not for everyday use). Second, don't punch the gas so hard. Most Americans abuse the gas pedal and end up going well over 3 rpms. Everytime you go over 3rpms you waste gas! In a 30 gallon tank, with gas prices as they are today (Dec. 6,2007), you waste 12 dollars! Thats three gallons of gas.

DON'T ABUSE THE GAS PEDAL!!!

steve

June 17, 2009 11:32 PM

if they can find out how to get a space shuttle up into outerspace than they can def make a v8 that goes 40 miles to the gallon ... its becuase the damn government would be loosing alot of money if they came up with that!! Now where i love gas was 1.60 -- 1.69 that was good becuase people had alot more money in their pocket to spend to get the economy going a bit now the assholes jack it up to 2.70 whata bunch of shit!!! how do they expect the economy to do better

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