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Why not tax gas while it's cheaper?

Allan Sloan is a senior editor-at-large at Fortune

TEXT OF INTERVIEW

Scott Jagow: I filled up my gas tank yesterday, and when the pump stopped, I thought there was a mistake. It was so cheap. The national average is now $2.10 and 16 states have gas under $2. But my friend Allan Sloan says now is the time for a gas tax.

Allan, what are you thinking? Why should we tack on a tax now?

Allan Sloan: Because if we're gonna get people to buy fuel-efficient or alternate energy cars, you don't do it when gas prices start at $2, run up to $4, and by the time, say, General Motors, if any of this happens in Washington, comes out with this magic green vehicle the government's going to offer to make, it may well be that no one's gonna want to buy them again.

Jagow: Do you really think that people will go back to their gas-guzzling ways considering what else is going on in this economy?

Sloan: Yeah, I think they will. And the reason I think that is I remember -- I'm so old, Scott, I remember '73, '74, when oil went from I think $2 a barrel to like $20 or $30, and everyone said it was the end of the world and we've learned something from it. And everything reverted as soon as oil prices went down. And it's gonna happen here, too. People will absolutely go back to their gas-guzzling ways if the price of gas stays at $2 or goes even lower -- of course they will. And we'll be at the mercy of events all over again, and I don't think that's any way to run a country.

Jagow: And what happens if oil and gas go back to the levels they were in July, and then the tax is added on top of that?

Sloan: If you do it now . . . let's say the average price of gas is $2.20 nationally, it's something like that, let say you make it $3.25. People survived more or less at $4, and if there's a problem caused by this, you know for people who can't pay, you'll give them their gas tanks back in some form or other, I'd rather we pay this tax to ourselves than we pay it to Saudi Arabia or Russia or Venezuela.

Jagow: And how do you think this would benefit -- if it would -- the American car makers?

Sloan: Well, if these companies are still alive, and we got rid of these what I consider idiotic rules about average fuel economy, where we mandate that the average mileage of the audio fleet has to be this or that, and then we say SUVs are really trucks so they're not included -- if you're running a U.S. car company, you go mad with this. If you say, here's the market, go serve it, that's a lot easier, let these guys make the cause they think they can sell. And if there are high . . . if gasoline prices are high enough, the socially-conscious among us will be happy, the consumers will buy this -- it's a lot better than being at the mercy of events, which is what our energy policy has consisted of.

Jagow: An interesting topic, Allan. Thanks for your input. Allan Sloan from Fortune Magazine.

Sloan: My pleasure.

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