Payne: Dr. Lutz’s Gas Tax Snake Oil

Posted by hpayne on April 30, 2012

Like President Barack Obama, Chevy Volt designer “Maximum Bob” Lutz yearns for Euro-style high gas prices. “People say politically it can’t be done. . . in the United States,” said Lutz on the Frank Beckmann Show Monday, holding up high-gas tax European nations as leaders in the fight for oil independence from OPEC.

But despite $8 a gallon gas prices, Europe today is more dependent on foreign oil than ever.

Since 2001, gas prices in Germany, for example, have more than doubled, from $3.60 a gallon to over $8 a gallon. Yet European dependence on oil imports has grown from 74 percent of consumption to 84 percent of consumption according to Eurostat (Germany is 97 percent dependent on foreign oil).

Lutz’s campaign is no doubt a self-serving ploy to increase demand for his pet Volt — but he also wraps himself in the moral imperative of, not global warming, but national security. He claims high gas taxes will wean America from oil. True? Again, Europe is instructive.

The doubling of gas prices should, by Lutz’s logic, have dried up European demand for oil — but it has not. Gas and diesel-powered cars remain the dominant form of transportation despite more than a decade of hybrid vehicle availability. Why? Because internal combustion engines remain the most cost-effective technology for consumers even in congested European nations.

Meanwhile, all that taxation — and its twin brother, regulation — have strangled European productivity with per capita income now just 70 percent of the U.S. as less-efficient government takes 45 percent of gross domestic product (compared to the 25 percent (and rising) in the U.S.).

No wonder raising the gas tax is, as Lutz puts it, “the third rail of politics.” Even President Obama and his Europhile sidekick, EnergySec Steven Chu, have backed off on their previous calls for higher gas taxes this year, saying: “Do you think the president of the United States going into re-election wants gas prices to go up higher?”

Trumped by facts and political reality, Lutz then got REALLY Obama-like. “When (gas) gets to $4 a gallon for market reasons, when it starts creeping down again, you don’t let it go down” he told Beckmann in describing how a gas tax might work. “You make up the difference in taxation. That would be one way to sneak it in where the public wouldn’t be aware of the fact that you’ve added taxes.”

Kinda like the EPA killing coal via sneaky carbon regs, get it?

At this point, the WJR phone lines exploded with fury against Lutz, whose reputation as Detroit’s car guy won’t survive many more of these interviews. A better solution? Let the market work. If there’s a better alternative to gasoline, the engineers will figure it out. And those evil OPEC countries? Boycott them. Just like we’ve done with an embargo on Iran the last 30 years.


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