Top Stories
Top Stories

Here’s why a gas tax increase makes sense: AutoNation CEO

Gas tax makes sense: AutoNation CEO

The federal gas tax has not been raised since 1993, but now is a sensible time for a hike, AutoNation CEO Mike Jackson told CNBC on Tuesday.

On this issue, Washington is "schizophrenic," he said on "Squawk Box." It has required automakers to make cars more fuel efficient, reducing the amount of gas they burn and therefore tax revenue, but lawmakers have not acted to fund infrastructure spending.

Read More Raise gas tax? How about eliminating it: Pethokoukis

"The industry is spending billions mandated by the government to put fuel efficiency technology in these cars, but with gas prices this low, that's not what the American consumer is asking for," he said.

AutoNation is the country's largest vehicle retailer. Jackson reported that SUVs outsold sedans last year, and truck sales were up 10 percent in 2014. That is both a function of American drivers' preferences and lower gas prices, he said.

Hiking the gas tax would not only help repair U.S. infrastructure, but send a message to Americans that gas prices will not stay low forever, he said.

Sens. Bob Corker, R-Tenn., and Chris Murphy, D-Conn., have proposed raising gas taxes 6 cents a year over the next two years. The current gas tax is 18.4 cents per gallon.

Read More Congress should raise gas tax: Sen. Corker

Former House Majority Leader Eric Cantor said on "Squawk Box" the current Republican-controlled Congress is unlikely to increase the gas tax. With vehicles more efficient these days, the country's model for funding infrastructure needs to be overhauled, he added.

The current highway bill expires in May, and Congress will have to respond to the need for a long-term infrastructure plan, the former seven-term Republican congressman from Virginia said.