America’s auto Mecca Detroit is championing higher gas taxes. For years, the Big Three strongly lobbied against any effort to raise national or state gas taxes, but now they are doing the reserve. Why? Because they invested in hybrid cars and small vehicles that have fallen out of fashion after a brief period of relatively high sales. When gas was $4 a gallon the last thing anyone wanted has an SUV. Smaller cars and especially hybrids were all the rage. The Hybrid was also made larger than life by a sympathetic liberal media that is very “pro-environment.” Its status was always exaggerated. Sure, a lot of people bought the Toyota Prius. But they once fashionable vehicle has exhausted its target market and sales slipped so low that Toyota indefinitely shut down its only Prius-manufacturing factory in Mississippi.

The Big Three bought the hype and failed to see that gas prices would eventually come down. They built inventories of small vehicles and hybrids but now that gas is around and less than $2, they just aren’t selling. Stuck with idle show rooms, the Big Three want to create the circumstance when the smaller car was in vogue. Viola: higher gas taxes to push up the price of filling up. How ironic.
The SUV is in style again but Ford has too many mid-sized vehicles. Of course, rising gas taxes during an economic recession would drive car sales, already morbid, even lower and put the vulnerable automakers on even more shaky grounds. Obama’s raise in fuel-efficiency right now likewise does not help the ailing automakers.
But the often unimaginative automakers who thought only about the short-term gains in building an abundance of smaller vehicles may also fail to see the longer-term consequences to their health in raising gas taxes, regardless of whatever dubious gains may be had in the short term.
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