AutoNation CEO calls for higher gasoline taxes

By Scott Malone

DETROIT (Reuters) - The United States should raise taxes on gasoline to encourage the development of more fuel-efficient technologies, the chief of the nation's leading auto retailer said on Tuesday.

"We're at a tipping point here," said Mike Jackson, chief executive officer of AutoNation Inc., at the Reuters Autos Summit in Detroit.

"We have to do something to favor the new technologies and send a message to American consumers that gasoline prices are going to be systematically higher," he said. "A gas tax is a statement from the government that this is an issue of national security and we're going to do something about it."

AutoNation is the nation's largest auto dealership group with 350 new vehicle dealers in over 15 states. Its 2005 revenues were $19.2 billion.

Jackson said that raising gasoline taxes could make alternative power train vehicles, such as hybrids, diesel and ethanol cars, a more economical proposition, both by making the fuel savings more valuable to consumers and by devoting some of the money raised to research.

"For any of these technologies to win over the next four to five years, we need gasoline prices of $3 (per gallon) at least," Jackson said. "If gasoline falls significantly below $3 a gallon and stays down below $3 a gallon, you undercut the economic viability of all these alternatives."

U.S. gasoline prices hit a record high near $3.03 per gallon this summer, but even at that elevated level remained less than half their equivalent in developed countries including Germany, Italy and France.

Gasoline prices have since eased to about $2.66 per gallon, according to the Lundberg retail survey. Federal and state taxes add about 47 cents to the retail cost of a gallon of gasoline, while taxes on diesel fuel run to about 53 cents a gallon, according to the American Petroleum Institute.  Continued...