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Ford CEO Mulally's Gas Tax: Coming To A Pump Near You?

Friday, 10 Aug 2007 | 9:36 AM ET

Ford CEO Alan Mulally's suggestion that higher fuel taxes might curb our country's gas consumptionis one of those ideas that makes sense on paper, but in reality, likely won't happen. I know, some of you are gonna say, "wait a minute, they pay higher gas taxes in Europe. If it works there, Why can't it work here?"

For starters, Congress won't tax consumers another 50 or 75 cents a gallon because they fear it will be a drag on the economy. From service station owners to tourism bureaus, the lobbyists for a dozens of industries that rely on people driving their cars will blast our political leaders to not raise taxes. And whether right or wrong, Congress will avoid anything that might slow the economy.

Second, I suspect there's an attitude by many in this country--including political leaders--that the automakers have the technology to improve gas mileage but they refuse to use that technology. I hear this from people on a regular basis. They will stop me on the street or e-mail me with comments like, "come on, you know GM can make every car 15% or 20% more fuel efficient tomorrow, they simply don't want to put the technology in their cars and trucks." I heard this so often, I checked into this with many of the automakers and consultants in and out of the industry.

Truth is, the automakers could improve fuel efficiency immediately, BUT it would cost them and us more. Adding the technology to boost fuel efficiency would likely mean making vehicles that are dramatically lighter, with less content. You might say, "sounds good to me. Let's do it."

But would you want an SUV that's so much lighter, it would lack the towing capacity you want for hauling a boat. And what content would you want removed to make the CUV lighter? Would you want to drop side curtain airbags?

The fact is, we Americans want bigger, more rugged cars and trucks. And as long as that demand is there, many of us would take size (and weight) over better gas mileage. It's much like the debate over horsepower versus fuel efficiency. Almost every study says car and truck buyers will choose power over fuel efficiency.

So keep plugging away Mr. Mulally. Getting people to at least discuss adding a gas tax is a start. But don't get your hopes up that we'll see one at a pump anytime soon.

Questions? Comments? BehindTheWheel@cnbc.com

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  • Phil LeBeau is a CNBC auto and airline industry reporter based in the Chicago bureau and editor of the Behind the Wheel section on CNBC.com.

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