PENALIZING BIG, inefficient cars is fine. But President Carter's automobile tax plan, with its rebates on small, efficient cars, has dangerous implications that are getting increasingly clear. Both the Carter administration and Congress evidently intend to accompany the rebates with flagrantly discriminatory penalties on foreign imports. If there's no way to give the rebates without starting a worldwide trade war over cars, it would be a great deal wiser to forget the whole idea. There are other and better ways of discouraging people from buying fat cars and wasting gasoline.
A law enacted a year and a half ago already requires American manufacturers to increase the fuel efficiency of their cars. It goes into effect this fall, when the cars that each company sells will have to average 18 miles per gallon. That standard rises annually to 27.5 miles per gallon in 1985. A company that misses the average will have to pay a fine.
The rebate system is designed to reinforce those efficiency standards. Otherwise, the administration fears, there will be the kind of resistance from the industry, with repeated delays and slippage, that has attended the long struggle over clean air and automobile pollution. Under the President's proposal, there would be a federal tax next year of $52 on the sale of a new car that got only 17 miles to the gallon, and a rebate of $47 on a car that got 19 miles. At the extremes, there would be a tax of $449 on a car getting 12 miles to the gallon, and a rebate of $473 on a car getting 38 miles.
The trouble is that a lot of the small cars sold in this country are imports. The companies and the United Auto Workers object tht taxes on big American cars would be used to subsidize cars from abroad. In principle, there's no reason why the American companies can't compete effectively against imports. But, having abandoned a large part of the small-car market, they would need years to win it back. Even without the rebates, the sales of imports this spring are soaring.
To avoid hurting the U.S. industry, the administration proposes not to pay the full rebate on imported cars. That's some remedy. For one thing, it's illegal under American trade treaties. For another, it would certainly bring retaliation abroad. But it would also be harmful to competition here at home, increasing General Motors' present dominance. Both Ford and Chrysler are depending on their imported subcompacts to compete with GM's American-built Chevette.
The administration fears that the fines in the present fuel efficiency law may not be stiff enough to enforce compliance. In that case, Congress can increase the fines. If that's not enough, it can simply prohibit the sale of any car, domestic or foreign, that doesn't meet a basic mileage standard. Either possibility would be preferable to a discriminatory rebate that promises to disrupt competition and fair trade.
Reps. Charles Vanik (D-Ohio) and William Steiger (R-Wis.), the chairman and ranking Republican of the Ways and Means subcommittee on trade, put it bluntly in a letter several weeks ago to Mr. Carter. "The rebate is unnecessary," they said, "and will prove to be extremely disruptive to international relations." They urged him to consider withdrawing it. That's no bad advice.