Report Calls for Gasoline Tax, Urges Decrease in Consumption

The United States must reduce its gasoline consumption by 20 to 25 per cent to obviate both a "security" and an "economic crisis," according to a report released yesterday by Daniel H. Yergin, research fellow in the Center for International Affairs and co-author of the bestselling book "Energy Future."

The report calls for a gasoline tax of 30 to 50 cents a gallon which would rise by ten cents every year until the tax reached one dollar per gallon, Bill Chandler, a director at the Environmental Policy Institute of Washington, D.C. and a contributor to the report, said yesterday.

The tax would be returned in full to the consumer by an end-of-year rebate, Chandler said, adding that if a consumer used 700 gallons of gasoline he would be given a $700 rebate.

To support the case for the heavy tax, the report cites the volatile situation in the Middle East and the potential of a severe cutback in oil supplies because of "the imminent possibility of another revolution in the area," Chandler said.

Raymond Vernon, Johnson Professor of International Business Management, yesterday agreed it is essential to an- ticipate oil cutbacks because of the potential for violent disruption in the Middle East.

For the government not to anticipate such disruption "would be like walking through a fire zone swinging a gasoline tank and expecting it not to explode," Vernon said.

The idea for the report originated at an energy symposium held last March at the Kennedy School. The participants included Yergin, Thomas C. Schelling, Littauer Professor of Political Economy, as well as representatives of oil companies and the federal government.

After the symposium "most of us who worked on the report felt that gas rationing was the solution," Chandler said, adding that the ensuing research determined that rationing would be bureaucratically impossible.

It would involve the issuance of 20 million coupons and result in unauthorized trading, Chandler said.

The possibility of peacetime gasoline taxation and rebates are currently under study by the Department of Energy (DOE), William Taylor, director of the Energy Conservation Project at the DOE, said yesterday, adding that a dollar tax on gasoline over a three year period would reduce consumption by over 30 per cent.

Taylor agreed both with the report's premise that "that type of reduction is necessary," and with its projection that without cutbacks in United States crude oil consumption there would be severe economic repercussions in the 1980's