Survey: Should You Pay More to Drive a Gas Guzzler?
by Lloyd Alter, Toronto
on 01.29.08
Jeremy asked that question in his post yesterday, discussing a California proposal to hit up hummers with a $2,500 registration fee and give rebates to purchasers of super-efficient cars. According to early estimates, 25% would be unaffected by the bill, while 35% would be charged a fee and 40% would receive rebates (paid for by the fees).
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Raise gas taxes and offset it with a reduction in payroll taxes. That way, working people aren't harmed, but it still feels bad to spend $80 to fill up your truck.
This is ridiculous! Where is that choice? Why do we as Americans feel that the best way to change someone is to over tax them?
Look at smokers (which I am NOT but still disagree with this practice). We tax the crap out of them and still they smoke. Now with cars we want to tax them to change their behavior?
Keep it up people. One day, and I PROMISE this will happen, you will find yourself on the receiving end of some of this 'behavior therapy'. Once you give someone the ability to have monetary gain they don't stop. Look at the war. You laugh and pat yourself on the back now but beware the bed you make....
Ahh, Tablebread, you didn't READ the post, did you?
It's not at all like the cigarette tax. Why? Well, silly, us non-smokers don't get a rebate.
It's not at all like gas tax. Why? Well, silly, us people who use less gas don't get a rebate and still pay the same RATE per gallon.
This proposal is elegant and VISCERAL. You buy a guzzling POS, you PAY. You buy a reasonable and efficient vehicle, you GET MONEY BACK. POS purchaser is handing Prius purchaser his/her money. Nice and visceral.
So the money doesn't just disappear into the public coffers, it goes into the pockets of those who make the right choice. Those who wish to choose otherwise are free to do so, and I'll happily take their money when I get my rebate.
The problem isn't raising gasoline taxes on SUVs. The problem is that businesses get huge tax breaks for buying these gas guzzling SUVs and trucks. Because they save thousands of dollars in taxes they can afford to drive them. If we are going to subsidize vehicles with our tax dollars lets subsidize the most fuel efficient vehicles.
Tablebread
this isn't anything like the sins taxes (tobacco alciohol) Those are things that only truly affect the person buying them and do not have a lasting affect on the rest of the citizen.
Gas guzzlers affect us all. They destroy the environment. This isn't behavior modification. this is a way of regulating out obsolete equipment. Gas guzzlers have no place in our society. Other than a use in constrution or business uses, which can right of the taxes in the first place, ther is no need to drive a hummer and I can think of no business where you would need a hummer, a pick yes but a hummer no. Anyway, people are making stupid choices that affect the environment and this isn't personal freedom, this is what shiny car they get to drive, what status symbol they get to destroy our environment with and in that case they should be made to pay the price.
Hindsight is great! If the voters can be swayed to support such a proposition then we won't have to look back and say"We should have..THEN" Learn from the past and plan today to have a tomorrow.
I have been wondering lately at the switch to smaller more efficient cars. It's leaving a lot of huge SUV's in the second hand car market, where poorer folks can afford them. The really cool new tiny fuel efficient cars are not trickling down as fast. This is leading to my poor income neighborhood to have a vast increase in SUV's.
I am sure this will be temporary in nature, as more higher income folks buy more efficient cars, then update to a new one, leaving that original one in the second hand market, but it's something I have been noticing.
The Canadian federal government currently has a plan like this in place. I'm not sure how it works (or how effective it is). You can read more about it here:
http://ecoaction.gc.ca/ecotransport/ecoauto-eng.cfm
heresyoftruth - In the Rocky Mountain Institute's book "Winning The Oil End Game" they come up with a comprehensive plan to prevent the problem you mentioned. It's not something I can explain myself, but it would be something good to check out.
Honestly, I'm not trying to be difficult or argumentative but I just can't get on board with ANY form of tax or hike in prices meant to punish a person for their OWN decisions. No I don't own an SUV or 'Gas Guzzler' nor will I ever own one. I won't because I understand the impacts of these machines on the environment and strive to live a 'greener' life which is why I read this blog.
I'm not saying that I have the answer to this problem or any other problem but I just don't agree with punishing someone for their decision - no matter how other people making the 'right' decisions could benefit.
That's the same as letting a mob of people rule the country.
...better hope you agree with the mob...
What about the people that decide to not buy a car at all? Where's their tax break? :P
I would rather see a fuel tax increase and offset payroll taxes, improve the roadway infrastructure, etc.
Most Americans say they want high fuel economy and low emissions, but speak much more loudly with their wallets. In the '90s and early '00s, when fuel prices were quite cheap, SUVs and trucks were flying off the lots making huge profits. Why else would Toyota and Honda enter the truck market?
We've already seen the effect of a $1 increase in the price of gas. People have started switching to more fuel efficient vehicles. If the fuel tax were to increase every year by a set amount ($0.25-$0.50 for example), people could plan ahead for their next vehicle and OEMs could plan their future production accordingly. The biggest issue the American OEMs had was the sudden shift in consumer vehicle choice due to the sudden increase in the price of fuel.
People are more likely to change if they see the financial penalty every week when they fill up compared to once every few years when they buy a car (and roll the tax into the loan/lease payment). The price of fuel in Europe is ~$6/gallon due almost exclusively to taxes and the European consumer has spoken with their hard earned cash.
By the way, which is worse for the planet, a truck driven 10k miles/year @ 15 mpg (667 gallons per year) or a Prius driven 50k miles per year @ 45mpg (1111 gallons per year) or even 60 mpg (833 gallons per year)? Penalize those who use the most fuel.
I'm with TableBread.
If the issue you want to correct is businesses having incentive, why offset that with another tax change. Why not just take that incentive away. Push for higher standards in MPG and hybrid technologies.
This is the same as taxing cigarettes or butter or whiskey. You are trying to dissuade people by law. Yes, the SUV example is clear cut. What if they decide to dissuade low income families from having children....what kind of killer legislation would that be.....formula and diapers are more expensive for poor people now...the country would benefit!
The first and foremost reason I disagree with the death penalty is there is a chance that 1 in X people are innocent. I would not see 1000 murderers killed knowing 1 may have been innocent. I know its a drastic comparison but SUV's also have a purpose. Like my neighbors, who have 5 kids and are taking care of one of their own parents. They also own a honda civic. Why should he bear the cross for "businesses" because a honda civic can't hold his family and groceries? Have you ever coordinated a Costco trip with 5 young children and a Honda Civic? He drives the thing probably 9 miles a week.....I don't see anything wrong with that.
SUV's are bad because they guzzle gas. Push for legislation that forces them to have stricter standards. Businesses have tax incentive to by SUVs....take it away. Lets not confuse the issue. We should never be punishing people for doing something perfectly legal like buying a car or gas. We should push to have the govt be more strict with manufacturers.
Cars have to meet safety requirements before they can be sold, tack on a MPG requirement for the safety of the environment.
Tablebread, its not a "punishment". It's a small attempt at making one PAY FOR THEIR DECISION.
Punishment, by definition, happens after the fact and is generally not expected by the one making the decision. This is a fee they know in advance, and can choose if it is worth it or not. Simple.
Why should they have to pay? Because frivolous use of a fast dwindling, currently necessary for basic living, resource, should not be cheap. Frivolous burning of gasoline negatively effects all of society, and is now a direct threat to national security. That should cost more, from a strictly capitalistic point of view.
Gee, what a surprise. This is typical liberal philosophy. The fact is that people who buy gua guzzlers already pay more in the form of taxes, registration fees, insurance premiums, etc. I own an SUV and use 10 gallons a week. My neighbor owns and drives a Honda Civic but uses 19 gallons a week. Who is worse for the environment? I'll give you a hint; it's not me. The issue is not miles per gallon but how many gallons each of use.
Yes, a 50 MPG law would actually be a good thing and would limit or eliminate the hummers But thinking that the current 35 MPG law almost did not pass shows how difficult it is to make corrupt politicians do the right thing.
Instead of making new taxes just get rid of the subsidies that oil companies are given.
Thanks, Pat. I will look at that book.
This misses a significant part of the problem: the weight of these larger vehicles and the resulting damage to the roads and bridges from their increased popularity. And the increased taxes at purchase time are just rolled into the bank loan, so they never really feel it.
My solution is a weight-based tax, collected at the pump. If you tow a boat twice a year, you still need to pay for the wear and tear your behemoth leaves in its wake. If you really need that capacity, great, you can justify paying for it.
How to do it? I suppose either scales at the pump (hard and expensive) or a tamper-proof transponder, like what it used to collect tolls in some cities (much easier and extensible).
It's not just about the use of gas, but about the other externalized costs.
Tablebread needs to compare places with high cigarette taxes with lower ones and see how it works, if he thinks sin taxes don't work. It's not like we're proposing a tax on food: last I looked, the items used in sin taxes are discretionary and certainly not something anyone needs to buy.
All these taxes do is force people to make choices: that's what freedom and markets -- all those happy talk ideas that make capitalism work -- are all about. If you're opposed to that, what do you propose? Just asking people nicely? I think we have seen how well that works . . .
As for sin taxes, I would never have imagined how unpopular smoking would become in my lifetime. Humans are pretty adaptable, especially when it comes to money.
It makes absolutely no sense to do this - this is a democracy not a dictatorship. If you can't get people to make a change naturally, who are you then to dictate that they change through fees and taxes? This is imposing your will upon another, PERIOD. I will not tell someone else how to live their lives. In turn, I expect the same.
"I just can't get on board with ANY form of tax or hike in prices meant to punish a person for their OWN decisions"
Tablebread is right; There should be no consequences to anyone's decisions. People can't be expected to be held accountable or be responsible for anything they do. I should be free to do whatever I want without having to think about how it might affect other people.
"That's the same as letting a mob of people rule the country.
...better hope you agree with the mob..."
Isn't that democracy?
Chris and the others who point to the tax system are right.
It is a matter of public record that GM, Ford and DC all made large contributions to the congressmen who added the extra heavy tax break to the law.
You should also check out the "Chicken Tax" which is a 25% tariff on imported trucks that the US has had since 1963.
In the US, all the operating costs like maintenance, insurance, parking, tires, oil, registration and even fuel are all tax deductable for companies. The purchase price of a Prius can only be depreciated (small claim per year) but the price of an extra heavy truck or SUV can be completely deducted from the company income tax.
It most certainly does influence what businesses buy and what companies make. Toyota ran out and added dead weight to their large trucks and SUVs made in the US to make them qualify for the heavy weight tax break.
Oh but if you're a working class person, you pay taxes on all of it and can't get a more efficient European truck.
The US has a serious problem with overconsumption, yet it continues to tax production instead of consumption. The only way to fix the long term trends is to move the tax base from income to consumption and imported oil is the #1 item in the trade deficit so I support much higher taxes on petrochemical oil but not biofuels.
Humans are too reliant on cars, especially North Americans. You don't need a Hummer for one person, or even 5 people. We need to start making changes to our lifestyles, one being efficiency. Even if we never completely rid ourselves of cars, we should increase their efficiency a lot. This begins with a reduction in size. We don't need large cars. A waste of money, space, materials, gas, and even time. It is astonishing that we need that many tons of steel and gasoline just to get from point a to point b.
One thing that needs to be cleared up is that smokers cost all of us because they spend more on health care. The people that breath their second hand smoke pay more for health care. So yes, they should be taxed for their consumption. Do we get the money back? Yes, albeit indirectly, since other taxes are able to be kept in check. And by the way, obesity costs as much in extra health care costs as smoking. We need to find a way to battle obesity, too. And don't forget the idiot that just lost half his brain in a motorcycle crash while not wearing a helmet. We will be paying that guys bills until he dies. Yes, indirectly we pay. But it doesn't matter if it's a direct payment or an indirect payment - we pay for that guys injuries - he doesn't pay for his medical costs.
As far as the fairness of a gas guzzler tax it is fair. Those people cost all of us dearly and they should pay.
Really, these things need to be looked at logically and yes, you need to do the math. Add up the numbers. My impression is that so many people are so bad at math that they don't have a clue about any of this.
Many countries apply different rate for car registration fee based on the size of the engines. The bigger the engine, the higher the rate. With different technologies in place nowadays, a better way is to set the rate based on initial MPG values.
I just wanted to add one comment. Not everyone out there has an SUV or Truck simply because it is cool or whatever. There are those of us who have them for a need. I for one, have an SUV to tow my small, 13ft, Vintage Shasta Travel Trailer, that I live in Full Time with my daughter that I Homeschool. I really hate that I am not as fuel efficient as I would like to be. But, on the other hand, I am as efficient as I can be. I don't have a huge rig, and I take up very little space. I am recycling a very old 41 year old trailer, and we love her dearly. Having my SUV enables us to travel everywhere, including Central America, which we do frequently. I have PTSD, and being on the road full -time eases my anxiety. Without my SUV, and it's ability to pull my little trailer, I would be in a terrible fix, as would my daughter who has Dyslexia. So I guess my point is this, please don't punish all of us because some of us simply desire to look cool. That is simply not the case in my situation. Thank you for reading.
I was going to make a selection on this poll, but decided not to because it is a totally one-sided question. If I had my choice, I would also ask what we should do to the car companies that continue to produce these gas guzzlers? Here, we are seeing a national problem... not only is gasoline becoming exceedingly expensive, but the supply is limited. Therefore, why not tax the hell out of the automotive makers who produce these low-mileage engines, to begin with? I understand business is a formula driven by supply and demand... if there was no demand, this supply would not exist. What about negating the possibility of the supply, it might not actually wipe out demand, but at least create a situation in which the demand could not be met. People keep trying to come up with solutions that place the burden on the consumers, not the businesses.
Also, regarding the sins taxes that have been addressed... although making the choice not to smoke or drink means you don't have to pay the taxes up front, there is still a societal cost... in paying higher health premiums in order to cover those people who overindulge, or to cover people hit by drunk drivers, or to pay for fires started by careless ashes.
The bottom line is: car manufactures will be producing this dirty cars as long as they're allowed to. Currently people still see dirty as trendy or even posh. it doesn't mean that flashy cars should be swept from our roads by the day. This means that strict emission norms should forced on car producers and they should be penalized for producing and selling something that is already 20-30 years out of date.
People drove, drive and will always drive. Pollution is a side effect due to poor technologiesand they shouldn't be punished for that; it's like tempting a kid with sweets and smacking him for eating them...
Not that I think gas guzzlers are a great thing, but I have no choice but to drive one. I have 4 kids and mine is always full. Full of my kids and carpool extras. (btw, I drive a suburban type, new and with some green features, not a hum-vee) We keep our car well tuned and participate in other "green" practices. I guarantee you that we already pay enough in taxes. I'll pass on more thanks.
Perhaps if the people who don't really need them and just want a status symbol would make more appropriate choices we wouldn't be worried about it. I see far too many SUV's on the road with one person in them and I know far too many single people who drive them.
I don't think we neeed to tax people into oblivion, we just all need to make the right (or left as it may be) choices.
Also, shouldn't auto makers be more responsible for the making of more fuel efficent cars? I'm pretty sure they have a lot to do with this debate. Just a thought.
How about we just make them pay the gas guzzler tax they are already exempt from....due to their classification as light trucks, they are exempt from the gas guzzler tax that is levied on passenger cars. It's a variable amount depending on the mileage (between $1500-7000 or so). I'd speculate 90% of light trucks on the market would "qualify" with several models hitting the high end of that penalty.
Sadly some of those 9mpg tax exempt trucks are single occupant daily drivers while the "gas guzzling" garage queen Lambo's and Ferrari's spend more time getting detailed than driven.
Large cars and trucks have their place, we just have to find alternative fuel. I can't put my power wheelchair into some of the mini vans now. We now have a full size van and when the chair, kids, oxygen, dogs get in there it's full.
What about farmers, you can't put the llama into a small car.
All is not black & white. I'm looking for a hand cycle for local
trips but can't afford 3000$ for it.
Life is not so simple
Try finding out about the carbon tax with 100%rebate idea...tax fossil fuels according to amount used/sold, with 100% rebate, but rebated equally to individuals...high users get taxed more than conservers but get the same rebate....try the James Hansen website, has a four page copy of his recent presentation before the House Select Committee for Energy Independence & Global Warming...or try that committee's website....(fossil carbon tax with 100% rebate isn't Hansen's idea I don't think, just one place where I've seen it...that four pages, mostly about climate change, should be read by all voters though...DB .
I don't think the answer is in higher taxes. Don't we pay enough already? If anyone should be penalized it should be the companies that make the vehicles. Maybe that would inspire them to create more fuel efficient vehicles and create competition amongst them to do so.
I also think we need to switch from gasonline to a more eco friendly fuel. When we do so I think that you should be able to convert your vehicle instead of having to buy a whole new one. This might lessen the problem of availability and having thousands of second hand vehicles rusting away.
I also think we need to get better mass transit systems that support green power. I've seen a commercial that boasts a train can get around 500 mpg and wonder why we can't incorporate that technology into other vehicles.
"If you can't get people to make a change naturally, who are you then to dictate that they change through fees and taxes? This is imposing your will upon another, PERIOD. I will not tell someone else how to live their lives. In turn, I expect the same."
Why, then, do we regulate markets at all? Externalities. Men are not angels, but we are good economic decision makers. On the whole, we make the best economic decisions given what is best for us, at the time given the information available that we are aware of. Ideally, governments are there to look out for everyone's collective best interest, and so make us consider the externalities- costs and/or benefits accrued to people other than the seller and purchaser- through taxes, rebates, regulations, requirements, even labels.
CO2 emissions are a cost we all pay, not just the driver, but it should be the driver who pollutes the most who pays the largest share of cost. That said, a higher gas tax would be better than an SUV tax, although I would have no problem with taxing the car manufacturer based on how much fossil fuel energy it takes to manufacture a given model.
The best thing to do would be a straight up CO2 tax, assessed on all purchases of all goods, from food and beverages to cars and homes. Or maybe just on all purchases of oil, coal, or natural gas. Works out the same, since ultimately the price increase will be paid by the end consumer. It only makes sense, though, if you earmark the revenues towards some combination of CO2 emission-reducing improvements: building more rail, improving the power grid, encouraging research into green and energy-efficient tech, and so on.
As people shed their Tahoes, Suburbans and other SUV's, those cars will be purchased by families with many children, who buy them not only for space but because they can't afford a new car.
So you have to ask yourselves: are you willing to shove a tax on the poor?
I'm not. I'd much rather they use that money for clothes, food and housing.
In France, they already have this tax system... and it work!
It makes efficient car more affordable to everybody, and not efficient cars too expensive...
For me, it's one of the best solution and I'm waiting this tax system in Switzerland.
Every time a Hummer pulls up next to me .... I say to myself .....I have to get me one of those. I love Hummers and if you can afford to own one,Good for you.Would you say the same thing if a Suburban pulled up to you ?
Its the chassis that the Hummer sits on. As Americans for the past 100 years we have been drilled into on heads that if you go to college work hard get a great job,make good money we can afford to buy nice things.... Welcome to America.Now in the last 10 years we are asked to down size our homes our cars and our life styles. To reduce our carbon footprint .Like turn up my thermostat .....I have my thermostat up 82 most of time I even put in a nice new Digital thermostat ,don't drive very many places anymore. We don't shop for fun anymore , So i adjust my life to do all these things and what happens, they raise my electric K/W per hour,raise my water bill, raise my taxes ,food cost to much ,gas cost to much.. so now I spend more money on less....
I make more money then I have ever have in my life and I feel like I have taken a step backwards of about 10 years,money wise .you guys have got to get a grip,Free trade , less taxes for big business and less taxes for the rich is great for the people,I don't need The government to tell me how to live my life .Think about it if America sneezes the rest of the world gets a cold.
The only thing that the population responds to their cost. If you are waiting for people to make the right choice for the environment or health, it is not going to happen. That is why governments must use taxes/rebates to encourage people to do the right thing. This not only goes for transportation, but for food, packaging etc. Both consumers and manufacturers that do the right thing with regards to the planet are rewarded, ones that do harmful or wasteful things are penalized. Now only if there were more governments at all levels that could recognize their place in guiding the way to a healthier planet rather than trying to line their own pockets or their friends. Choice is a great thing, but you should have to pay for making the WRONG CHOICE. Many of these carrot or stick scenarios could be revenue neutral as the the bad choices would pay for the rebates for good choices.
I wanted to say that I don't own a car, so the amount people already pay in taxes for cars already isn't something I know much about. It seems to me that, taxing people who don't have a certain occupation (ie. not in the primary sector), or who don't have children/disabilities (the wheel chair comment), should be taxed some. I'm not saying take all their money, no. Its not right.
The only thing that bothers me is that people here say "tax the car companies instead of us!". Car companies manufacture what people want to buy. If people don't want to buy SUVs, they won't manufacture them. Either that or my highschool economics teacher was VERY wrong.
I only want to say that, I understand we don't want to pay extra money if we obviously own the product being taxed. When people drive Hummers or any SUV or whatnot with one person in the car as a status symbol, they're making the rest of us suffer because of their desire to be seen as "rich" or "cool". I don't think that should be tolerated. Yes, it could be considered "Behaviour modification", but it happens all the time. That is why most laws are in place. If you don't believe in trying to make the environment, or society, cleaner/a better place to live, then you'll obviously not support any regulations on people buying OR people selling SUVs.
A law like this wouldn't make your choice for you, just in the same way that smoking taxes don't make the choice for you. They're just there to let you know that your choice can affect you, loved ones and complete strangers. If you're willing to be selfish enough to make that choice anyway, you should be willing to pay extra. Period.
On a side note, I feel that providing more public transport, or even making it easier to walk places, in USA would be highly beneficial. I just don't see that happening, however, just like I don't see this tax or other fuel regulations happening.
Here in the UK this has already happened and it's made a huge difference to buying habits, large SUVs have plummeted in value (used). But I think this would have happened anyway simply with fuel prices high so actually this is just another tax that the government can argue is for our own good. Also, on long trips smaller capacity vehicles can be less efficient as their engines work harder.
OK, why isn't the option of voting to NOT tax gas guzzlers? There can be no shift to more fuel efficient vehicles unless more fuel efficient vehicle that do the tasks people expect out of their vehicles marketed.
I own a small 4x4 SUV and maintain it so I can have the best gas mileage possible but I live in the country and have to drive 40 minutes to work. When we have bad weather I must drive through a creek and have to remove or drive over trees that may have fell during storms just to get to the main road.
I already pay alot of gas tax & more for maintaining my vehicle. Should I be penalized for living out in the midst of Nature? A Hummer is just a gargantuan gas sucker and they can pay a fee for the "priviledge" of having such a big vehicle but I don't want to have to pay through the teeth for what is a necissity in the country. I can't afford a hybrid SUV either!
It's already happened in a big way in the UK and has really made a difference to what vehicles people buy, rarely now do people buy cars with over 2 litre engine (that's right), turbocharging small engines is becoming much more widespread now. We average about 37mpg for most cars and it will be 40mpg within a few years.
I've always favored a $1 dollar a gallon carbon tax and use the revenue to fund public transit projects in the nation's most fuel-hungry cities. I think it would be political suicide, but it's a good idea.
Ultimately, this is sort of a moot point. Petroleum fuels will become more expensive again as the economy rebounds and people will make the decision to buy more fuel-efficient vehicles.
As it stands, people have already very much made the shift to smaller vehicles and I think any future tightening of credit markets will have most of us driving Nissan Versas and Toyota Yaris' anyway, as the $30,000 SUV in every middle class driveway becomes a thing of the past, especially since many people bought those cars with second mortgages on homes they no longer own.
I think the future costs of borrowing money and fueling vehicles will do for us what we seek to do with these sorts of taxes. Indeed, the lack of easy credit in the future, coupled with rising energy costs, is going to do a lot to keep people in smaller homes closer to urban cores. I think we've finally got to pay the piper on this one, as this high-consumption, suburban lifestyle is no longer sustainable, either financially or in real energy costs.