AutoNation CEO Mike Jackson wants to sell you a car, and he wants to raise the price you pay for gasoline every year for 10 years.
AutoNation, based in Fort Lauderdale, Fla., is the largest U.S. car dealer with 333 dealerships in 16 states (including 17 in Colorado), and more than 100,000 vehicles for sale online at http://www.AutoNation.com. Before Jackson took this job in 1999, he was CEO of Mercedes-Benz USA.
Higher gasoline taxes, he says, will curb America’s lethal addiction to foreign oil – a habit that inevitably puts money in the hands of terrorists and sends U.S. troops into deadly battles.
“Americans do not want to go on like this,” Jackson said in a telephone interview. “Their dollars are going to support both sides of a war. It makes no sense.”
Jackson has been lobbying for a higher federal gasoline tax, which has not budged from 18.4 cents a gallon since 1993. He wants to hike it 10 cents per year for a decade. He hopes this will force consumers to conserve and provide economic incentives for alternative fuel technologies.
The Fortune 200 CEO describes himself as a Republican, a fiscal conservative, strong on national defense and a free-market capitalist.
“You can’t leave national security to the free market,” Jackson said. “Five presidents have said this is an issue of national security. … But they haven’t put forth a policy to address it. We’ve gone from importing one-third of our oil to importing two-thirds. And fuel economy has been stuck at 21 miles per gallon for 25 years.”
The problem isn’t automakers or even big oil companies. The problem is American consumers, who’ve consistently chosen size and speed over fuel efficiency.
“If you want people to drink less, you tax alcohol. If you want them to smoke less, you tax cigarettes,” Jackson said.
“Let’s say the issue is obesity. Right now, what the federal government is doing is putting out a plate of broccoli and a plate of donuts, and it’s saying you should really eat broccoli, but we’re having a half-price sale on donuts.”
Gasoline has plunged to less than $2.25 a gallon. Jackson said he believes consumer behavior only begins to change at $3, and really changes at $6.
“The last thing that OPEC wants is for America to get serious about energy, conservation and the development of alternatives,” Jackson said.
In Jackson’s view, gasoline should be taxed, and alternatives should get tax breaks. But who wants to talk about taxes just before an election?
“The state of affairs in Washington is pretty depressing,” Jackson said. “They will say that they completely agree with my position but are unwilling to stick their neck out. Or they argue that the free market will address this issue. And when I point out that the free market hasn’t fixed it in 25 years, they shrug their shoulders and walk away.”
Jackson says his CEO acquaintances haven’t been much help, either.
“Most are supportive,” he said. “But few are willing to say it. The perception is that you’ll be tarred and feathered.”
An increasing number of economists, however, favor hiking gasoline taxes. Many argue that current gasoline prices do not reflect costs that are foisted upon society – such as pollution or the military required to protect oil fields.
Last month, former Federal Reserve Chairman Alan Greenspan, who has long toed a conservative line on taxes, told a group of executives in Massachusetts that he favored hiking the gas tax. “That’s the way to get consumption down,” he said. “It’s a national security issue.”
Then came Robert Lutz, vice chairman for worldwide vehicle development at General Motors. “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,” Lutz said at the Paris Motor Show on Sept. 28.
Former U.S. Vice President Al Gore, author of the global warming tome, “An Inconvenient Truth,” called for a tax on all fossil fuels in 1993. What we got instead was a 4.3-cent hike in the gasoline tax, a move so unpopular it helped Republicans take back Congress in 1994.
“If you read Al Gore’s book, he doesn’t call for anything effective,” said Jackson. “The inconvenient truth is that we need a higher gasoline tax.”