The chairman of General Motors Corp. today blasted a proposal to impose taxes on large automobiles and give rebates on small cars in order to encourage energy conservation as "one of the most simplistic, irresponsible, and shortsighted ideas ever conceived."
A sliding tax on automobiles that would fall heaviest on heavy gas users, be zero on moderate sized cars and change to a rebate on smaller models is reportedly a key part of the comprehensive energy program that President Carter plans to prevent to Congress on April 20. A slightly higher tax on gasoline may also be part of the plan."The policy-makers in Washington haven't come right out and said to the American people, you're not smart enough to know what's best for you and what's best for the country, so we've got to decide for you." GM chief Thomas A. Murphy said."But that's exactly what is being done."
The denunciation by Murphy, which took place in a speech before the Sales Executive Club of New York, is the sharpest attack yet by an auto industry executive on what is expected to be in the Carter administration energy plan and is a sign of the kind of resistance the administration can expect from all affected industries once the energy policies are outlined in detail.
Murphy predicted the American people would "rebel" at the sliding excise tax plan, and that it could in fact slow the switch to more fuel-efficient cars by encouraging present owners of big cars to hang on to them longer than they would otherwise. A tax of about $500 on the largest cars has been mentioned.
"To the extent that people decide to get another year out of the old car, the reduction in fuel consumption of all cars on the road will be retarded," he said.
The head of the nation's largest auto company, which also is the largest manufacturing concern in the world, blamed "the government's interference with the free market" as "the basic reason we have an energy problem today."
And he said the problem would continue "until the government writes itself out of the script and lets the proven remedies of a free market come into play over time, the law of supply and demand will not only lead to the more sensible use of the energy reserves we have left, but will make economic development of new sources of energy."
"It makes no more sense to dictate to a family the size of the car it must own that it does to say that everybody must live in a one-bedroom house," Murphy told the group.
Murphy said that among the adverse effects of the excise tax proposal that "the hip-shooting marketeers of the Potomac probably didn't consider," were the possibility of large job losses for the auto manufacturers and related industries, increased foreign car sales, a cut in the resale value of small cars because used large cars would become more desirable and an overall delay in automobile turnover which "eventually works its way down to those low-income persons who can only afford a used car at a low price." He did not mention any impact on auto company profits.