Question to the Readership
30 April 2007
Brookline, Massachusetts is in the early stages of considering a raise in the automobile excise tax (car property tax) on all vehicles under 8,500 pounds which do not exceed a specific fuel economy (mpg) standard. The details are not finalized.
The question to the readership is: what other municipalities in the US (or elsewhere) charge a higher property/excise tax or other surcharge for vehicles that are nott considered fuel efficient? Please respond in the Comments section.
In the UK, for example, London boroughs and other municipalities are proposing charging more for residents’ parking permits for cars that produce higher CO2 emissions and less for the least polluting cars. (Earlier post.)
US Gas Guzzler Tax | |
---|---|
Unadjusted MPG (combined) | Tax |
at least 22.5 | none |
at least 21.5, but less than 22.5 | $1,000 |
at least 20.5, but less than 21.5 | $1,300 |
at least 19.5, but less than 20.5 | $1,700 |
at least 18.5, but less than 19.5 | $2,100 |
at least 17.5, but less than 18.5 | $2,600 |
at least 16.5, but less than 17.5 | $3,000 |
at least 15.5, but less than 16.5 | $3,700 |
at least 14.5, but less than 15.5 | $4,500 |
at least 13.5, but less than 14.5 | $5,400 |
at least 12.5, but less than 13.5 | $6,400 |
less than 12.5 | $7,700 |
At a federal level in the US, the Energy Tax Act of 1978 established a graduated Gas Guzzler Tax on the sale of new model year vehicles whose fuel economy fails to meet certain statutory levels. The gas guzzler tax applies only to cars (not trucks) and is collected by the IRS.
The tax is calculated on the basis of the unadjusted combined fuel economy—i.e., the CAFE fuel economy rating, not the adjusted estimated fuel economy for consumers the EPA publishes in its Fuel Economy Guide and on the window stickers in new cars. (Hence, the adjustment in the methodology for the user estimates starting in MY 2008 does not affect the CAFE calculations—or the calculations for the gas guzzler tax.)
Currently, lawmakers in Vermont are considering imposing a further surcharge on gas guzzlers as a way to boost funding for public transportation, but the measure is opposed by the governor.
The Vermont bill would impose a $150 surcharge on the purchase of new cars that get less than 20 miles per gallon and trucks that get less than 17, except those used for work.
California lawmakers are considering a similar measure, after one died last year.
The state of Maryland enacted a gas guzzler/sipper tax in 1992. Shortly thereafter, the National Highway Traffic Safety Administration (NHTSA) found that the 1975 Federal Energy and Conservation Act preempted Maryland’s law. The findings were that states cannot enact laws that conflict with federal regulations on fuel economy disclosures, and Maryland could not tax vehicles based on fuel efficiency or require vehicles for sale to display a sticker stating the vehicle’s fuel efficiency and the resulting surcharge/credit imposed. Accordingly, the sipper/guzzler tax was never implemented.
A 1992 Maryland Attorney General Opinion (92-020) stated that the Act only partially conflicted with the federal act. The opinion stated that: (1) the section requiring each vehicle to display a sticker stating the vehicle’s fuel efficiency and the resulting surcharge/credit did violate the federal statute; but (2) Maryland could impose a tax based on fuel efficiency. The opinion stated that federal law does not preempt Maryland from using the federal fuel mileage ratings to compute taxes owed in Maryland.
Resources:
Maryland HB 756 Fiscal Note
I think that these types of laws are certainly the way to
go in all countries , my only reservation is that all moneys
raised should be put good use in ways that directly lower
carbon and pollution output , ie networks of dedicated cycleways
away from main roads and linking communitys together.
Too much "green tax " is frittered away by local authorities
when it should be going to improve the lives of all !
Posted by: andrichrose | 30 April 2007 at 07:07 AM
Carbon from cars does not Cause global warming. I am all for tax incentives for NG cars to cut down on Crazy Ven or Middle East fuel. I have found that most states waste the "extra" taxes they impose and plus the taxes never go away.
Why not make cars with 30+mpg ratings tax free? People would jump at the chance to save tax on the spot instead of waiting til Tax season to recoup some incentive (less paper work and wasted time).
BTW we are all made of carbon.BBC4 has a great show about the Global warming swindle.
Posted by: Wakeup | 30 April 2007 at 07:44 AM
It's too bad these governments ding the buyers when the auto companies really could meet the standards. The auto group should put the money into R & D instead of paying lawyers and lobbyist to fight the regulations and ad companies to spin the truth.
Posted by: Lad | 30 April 2007 at 08:06 AM
i think a better way to approach the problem would be through taxes at the pump. Setting a tax that would be paid based on the number of gallons of gasoline purchased would have the effect of punishing those who used more gasoline. This would be a more fair way than the above proposals because it would effectively tax the consumption of gasoline.
Posted by: Phred Barnet | 30 April 2007 at 08:08 AM
This is a move in the right direction, but all vehicles below 25 mpg should qualify for this progressive carbon type tax.
I would also agree to make vehicles with 35+ pmg, purchase tax and penalty free + a special progressive credit or subsidy for vehicles above 45 or 50 mph. The total program could be revenue neutral.
Applied nationally, this would make CAFE obsolete and non-required. Manufacturers would have to do better if they want to sell. They would quickly develop flex fuel Hybrids and PHEVs capable of 50+ pmh.
Posted by: Harvey D. | 30 April 2007 at 08:27 AM
Make the gas guzzler tax apply to all vehicles, not just cars. If you can build an SUV or a truck that meets the standards and avoids the tax, fine and dandy.
Posted by: tom | 30 April 2007 at 08:28 AM
Such a tax would unfortunately a) never pass in the United States, and b) be devastating to the millions of working-class residents who commute every day via car. There does NOT exist throughout the US the sort of mass-transit infrastructure that does in Europe or Japan: we need cars to get around cheaply. In addition, the poorest residents tend to be the most polluting in terms of transit. Here in California, for instance, older and more polluting cars are all the more cheaper because they are less likely to pass the state's stringent smog requirements. As a result there are added expenses to getting your car to pass smog, and any further ones to an inefficient car would make transportation impossible for some and in turn have far-reaching economic consequences. In addition, transportation accounts for a smaller fraction of carbon emissions than home electricity use, and a tax on homes that use the most carbon seems as if would be much more effective at reducing GHGs and economically sound.
Posted by: Matthew Leo | 30 April 2007 at 08:37 AM
I agree with the previous poster. Its easier to lead with a carrot instead of a stick. A good example is legislation in Virgina which allows drivers of high efficiency vehicles to use the HOV lanes. This combined with the tax incentives issued by the federal government and local municipalities has driven our state to have the second highest number of hybrid vehicles in the nation according to one study.
I am however concerned that despite these one time efforts we let these benefits expire which sends the wrong message. The federal credit for the Toyota Prius is set to expire because the car is popular?? Why on earth would you want to cut back on a progressive policy when its having the desired effect. Further it is known that the lane benefits for high efficiency vehicles will expire in June or July of this year.
We as a nation should keep our focus on being energy conscious. Our best weapon is tax incentives which decrease income tax liabilities. There is a long history showing that when these benefits are dropped people loose interest and stop the energy saving behaviors which they are developed to encourage. Need an example? Remember all those houses built in the late 70s and early 80s when you could get a tax credit for having solar? How many new houses have solar? Its an inexpensive and extremely effective method the Federal and State governments can use. We've already seen that adding more taxes doesn't work nearly as well.
Please ... learn from history ... or at least take some time to review it ;-)
Posted by: Tom | 30 April 2007 at 08:38 AM
The post calls it a "car property tax." Are light trucks included? It would be very inflationary to put this tax on the pickup trucks used by your plumber, carpenter, electrician, etc. And these people couldn't just get a Prius. The stuff they haul around weighs more than a Prius. But if the tax doesn't apply to SUVs then the perverse effect would be to push people away from cars, as CAFE standards did two decades ago. A vehicle property tax could have a positive effect, but the devil really is in the details.
Raising the gas tax would be more fair, and much cheaper to implement. But of course it wouldn't be popular, and the auto, ethanol, and farm lobbies would fight like tigers to prevent it.
Posted by: JamesEE | 30 April 2007 at 08:38 AM
The loophole of having a threshold above which the law does not apply, while intended to not harm business users requiring large vehicles, often just puts an incentive in for people to buy the absolute biggest trucks they can find. I knew someone that ordered some option he really didn't want on a Chevy Avalanche just because it added a couple of hundred pounds and put it over the threshold for gas guzzler status... that is so heavy it was no longer considered a gas guzzler.
The need to make sure these laws are crafted in such a way that they don't encourage average people to move up to huge "fleet" vehicles.
Posted by: rhapsodyinglue | 30 April 2007 at 08:48 AM
instead of taxing gas you could nail guzzler vehicles at registration. A component of vehicle registration could consider the fuel economy of the vehicle as well as emissions. Vehicles with poor fuel economy/emissions (as a class, not per vehicle) would pay much higher registration costs. You'd need stiff penalties for registering in another state.
Taxing gas is the easiest way to go, but it will increase the cost of many other goods and services. If we stay on the trajectory we're on with fuel prices a lot of this will not be necessary.
Posted by: tripp | 30 April 2007 at 09:05 AM
To actually answer the question posted, Canada now has a federal excise tax on gas guzzlers in effect (as of March 17, 2007):
http://www.cra-arc.gc.ca/agency/budget/2007/excise-e.html
There's also a rebate for fuel efficient cars and gimme to GM for E85 compatible cars:
http://www.ecoaction.gc.ca/ecotransport/ecoauto-eng.cfm
So the two together are essentially a feebate. It's not a terribly aggressive program, however. The Prius get's a C$2000 credit while something like the Nissan Armada gets a C$3000 hit. Most vehicles aren't affected.
Posted by: Robert McLeod | 30 April 2007 at 09:22 AM
I'm all for gasoline tax - you need to tax consumption. If someone buys a truck, and only uses it when necessary - say, towing trailers, and they have a compact or a bicycle for every day commuting, they're being responsible, so they should be taxed less.
And I don't care about businesses having to pay more either. If you buy more stuff, you use more of resources, so again, you pay more. If the retailer has to increase price of the products due to gas, then so be it - it'll reduce consumption on that end as well - people need to think more before they buy something, they buy less stuff, so less fuel is wasted trucking around stuff people don't really need.
Posted by: peter | 30 April 2007 at 09:38 AM
If they wanted to make this an excise tax for all new vehicles foward, then it would be a little closer to fair. This would give people a chance to make a decision. The fact that the price of gas is probably killing some families that drive Mini Vans and small SUV's, this would not help. A gas tax maybe better in the short term until people have a chance to get out from under these SUV trends of a few years ago.
Posted by: Paul | 30 April 2007 at 09:50 AM
I favor the purchaser of any vehicle that is not commercially registered, having excess weight and poor mileage paying an up front tax when the vehicle is purchased and then increased registration fees every year that the vehicle is in service.
For example, if someone purchased a Ford Expedition or Excursion and they have no commercial reason to do so, they would pay a fee of 20% of the purchase price and 3x the normal registration fee for a vehicle of that price. That money would go to promote clean and fuel efficient vehicle purchases. (Feebate)
Posted by: SJC | 30 April 2007 at 10:04 AM
Brookline's municipal budget is presumably in the red because the housing market is very soft. In addition to shoring up revenue, Brookline may be calculating that taxing vehicles will drive low earners out of its territory, which in the long run could raise school standards and therefore, property prices. The green tinge on the tax could reinforce this gentrification.
Nevertheless, it would make a lot more sense for the town to bite the bullet and cut spending. The state of Massachussets might want to consider vehicle fuel economy in setting its annual license fees. Austria levies a one-time fee based on fuel economy and annual fees based on engine horsepower after that. Another option is simply taxing the fuel more heavily, but the New England states would have to co-operate to avoid excessive fuel tourism (a long-running problem in the EU).
Posted by: Rafael Seidl | 30 April 2007 at 10:36 AM
If someone had a vehicle for everyday driving and they bought an SUV or truck just to tow a trailer or similar infrequent usage purpose it would be quite easy for them to incorporate as a business and then license that vehicle under the business to avoid the added taxes. The increased insurance for a commercial vehicle is negligible if the miles the vehicle is used for are shown to be extremely low (one weekend a month, for instance).
Easier to get around that registration tax and initial purchase tax than to get around a usage tax on gasoline.
The poor with long commutes? Increased subsidized housing closer to areas of work or how about "gas stamps" like food stamps...you report a low income on your tax forms and are alloted gas credits based on the annual mileage you have reported during your emissions/safety inspections (they check the odometer from year to year and give you a receipt). If you don't do your emissions tests and register your vehicle like a good citizen, then you can't get the "gas stamps".
Posted by: Patrick | 30 April 2007 at 10:45 AM
The best way to reduce AGW is to turn off the hot water heater to those who want to do something about AGW by telling others how to live. Public official are more interested in collecting taxes the solving problems. When was the last time you saw a picture of candidate for public office washing cloths by hand and hanging them up to dry?
Posted by: kit P | 30 April 2007 at 11:13 AM
Local vehicle taxes based upon efficiency or consumption or emissions are a bad idea simply because they duplicate what the federal or state governments already do - or at least should be doing.
Our problems with fossil fuels and emissions are not local. They affect diplomacy and military actions. They affect our currency and general prosperity. Handling these problems is not why you have a mayor.
There is just no reason why your city government should be given more money because those problems exist. It will not improve anything except paychecks at city hall.
The federal government should be doing more with CAFE, emission controls, and as needed additional fuel taxes.
States are forming alliances to adopt the California model because the feds don't do much. State agreements are less desirable than uniform national policies but they are certainly better than varying rules for each city and town and county.
Posted by: K | 30 April 2007 at 11:16 AM
K,
You're right. It should be done nationally. But it seems that national politics is more heavily influenced by entrenched lobbies. Michigan won't lead on vehicle or fuel taxes, and together with other auto manufacturing and farm/ethanol states will block federal legislation. So states that aren't under the control of those lobbies are moving ahead. That puts more pressure on the fed's to act. Democracy at work -- it's not pretty, but it's the best system invented so far.
Posted by: JamesEE | 30 April 2007 at 11:53 AM
A tax is a tax, and politicians will spend its proceeds on what ever nonsense they think they can buy votes and campaign contributions with. That is the way the world works. Get used to it.
Posted by: Robert Schwartz | 30 April 2007 at 12:50 PM
Unfortunately, the taxes raised are not spent on green energy.
Also, the tax should probably built into the gasoline tax. Becuase I may own a Hummer that I drive 500 miles/yr, whereas someone will do a lot more damage driving a Toyota Tundra 15,000 miles/yr. MPG alone is not a useful metric.
Posted by: Hydrid+E85 | 30 April 2007 at 01:37 PM
A tax based on MPG seems problematic with the advent of alternative biofuels. Does the EPA rate flex vehicles according to fuel type? What if you change fuels or fuel blends during the course of ownership? (likely in ethanol States.)
The taxes if used would be better applied to fuel type - with lower to zero taxes for the cleanest fuels (measured by a standard assay of pollutants per EPA.
Posted by: gr | 30 April 2007 at 02:50 PM
To get a commercial registration, you would have to show that you have a legitimate business that requires such a vehicle. No phony baloney tax loop hole lying and cheating behavior will be tolerated. Fraud is punishable by fines and prison time.
Posted by: SJC | 02 May 2007 at 05:38 PM