Arco Chairman Favors a Stiff Tax on Gas : Energy: The controversial suggestion was one of several that he offered as solutions to America's dependence on Middle East oil.


Taking a stance that puts him at odds with the oil industry and some consumer groups, Atlantic Richfield Co. Chairman Lodwrick M. Cook says he favors stiff gasoline taxes as a means of encouraging conservation and lessening reliance on imported oil.

Speaking in Dallas on Wednesday, Cook offered the suggestion as one of several things that could be done to wean the nation of its dependence on oil from the unstable Middle East.

"I think we've got to discourage unneeded consumption. What about raising taxes on gasoline?" he asked in remarks delivered to the Southwestern Legal Foundation. "American gasoline taxes average out at 29 cents a gallon, by far the lowest of any major industrial country. West Germans pay two bucks, the Japanese $1 and Italians close to $4. We ought to think about that."

Cook stopped short of recommending a specific tax hike. Analysts have said taxes would have to rise at least 50 cents a gallon to have a significant effect on consumption.

A spokesman for Cook said he would not favor a hike of that magnitude, adding that the executive believes that a tax should be phased in over time.

Cook's comments, during a speech discussing national energy policy, are in keeping with past Arco statements that the company would not oppose major new gasoline taxes--provided that the resulting revenue was channeled to public transportation and conservation.

But they are at odds with President Bush's proposed National Energy Strategy, released Wednesday, which does not recommend raising taxes. Tax hikes are also generally rejected by the oil industry and by some consumer groups.

"We don't think it's equitable," said Joe Lastelic, a spokesman for the American Petroleum Institute, the oil industry's main trade group. He said such taxes would unfairly burden the poor and middle class.

In addition, opponents say, higher gas taxes would hurt people in rural areas--who need their vehicles to traverse long distances--more than they would affect residents of cities who may have access to public transit systems.

The consumer group Citizen Action, which normally finds itself in conflict with the oil industry, agrees that a gasoline tax would be regressive.

"Analytically speaking, clearly Europe and Japan do impose high gasoline taxes and that does discourage consumption. . . . There's no question that there's a clear relationship," said Ed Rothschild, director of energy policy for the Washington-based group.

"The question from our point of view is, what is equitable? Who ends up paying and who ends up getting the benefits?"

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