Auto Executives Call For Gas Tax Hike

The recent gas prices of around $3 a gallon has some auto industry leaders calling for the U.S. government to adopt a more aggressive policy to decrease dependence on oil. Mike Jackson is the CEO if Auto Nation inc. which is the country's largest auto retailer. He suggests a 10 cents a year increase to the current federal gas tax of 18 cents per gallon. The increase on the gas tax is designed to persuade people to buy more fuel-efficient vehicles. "gas prices would have to rise to about $6 a gallon in the U.S. for consumers to change their behavior and buy more fuel efficient vehicles" says Mike Jackson.

The auto makers' argument is that consumers won't buy more fuel efficient vehicles unless they have an economic incentive to do so. Is increasing the price of gas by means of taxes the best way to go about making the change to more fuel-efficient vehicles such as hybrids?