Autoblog

Virginia's Gov. McDonnell proposes elimination of gasoline tax

Jonathon Ramsey — Wed, 16 Jan 2013 09:31:00 EST

Filed under: Hybrid, Government/Legal, Earnings/Financials

The assessment of a gas tax and the role it plays in a state's transportation and overall budgets has been a topic of discussion for a while, and Virginia state governor Bob McDonnell is the latest to offer up another way to secure more revenue from the state's residents to pay for their roads and public transportation. McDonnell's proposal would eliminate Virginia's 17.5-percent gas tax entirely, with funds for infrastructure projects coming from an increase in the sales tax from five percent to 5.8 percent and an annual $100 fee assessed on drivers of alternative-fuel and hybrid vehicles. He would leave in place the tax on diesel fuel, and naturally, the federal gas tax would remain untouched.

Much of the response to the proposal has been, "Um... what?" - as well as "bad policy," "a no-brainer for dumb idea of the week" and "'bold' and 'unprecendented." McDonnell is right to suggest that a possible response to "any innovative and comprehensive transportation plan" is dislike. Still, we think there are holes in parts of his plan. Virginia's gas tax is already one of the lowest in the nation, doesn't rise with inflation and hasn't been increased since 1986. According to McDonnell, the revenue from it has 45 percent less purchasing power now than it did 27 years ago, so "It's a tax that's losing its value every year."

Raising it, or getting it adjusted to inflation, is for some reason not on the menu. The 0.8-percent bump in the sales tax would bring in $600 million more per year than the current gas tax does, yet to eliminate the gas tax entirely seems a bit much; it might not pay as much as it used to, but its still a pretty fair and direct usage fee, so why not take advantage of whatever it can provide?

On top of that, to jettison the gas tax but then tax owners of alternative-fuel and hybrid vehicles because "these vehicles generate little federal gas tax revenue and therefore need to contribute their share to fund the roads they use" seems disingenuous. That means the SUV buyer pays for roads at the cash register, while the Honda Insight buyer has to chip in at the register and the Department of Motor Vehicles.

And on top of all that, the move to a sales-tax funded transportation infrastructure unlinks the "fair share" argument from "the roads they use." People who buy more goods will pay more for their roads, not necessarily people who use the roads more. It's only a proposal at the moment so it has a way to go before becoming law, our guess is that it will have a long fight as well.

Virginia's Gov. McDonnell proposes elimination of gasoline tax originally appeared on Autoblog on Wed, 16 Jan 2013 09:31:00 EST. Please see our terms for use of feeds.

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Bay area residents could soon be taxed per mile driven

Chris Tutor — Tue, 24 Jul 2012 09:14:00 EST

Filed under: Government/Legal

As cars get more fuel efficient, they become a less profitable source of tax dollars. So what's a city to do? Raising gas taxes is certain political death. For San Francisco Bay officials, creativity is the key.

The Metropolitan Transportation Commission and Association of Bay Area Governments are currently examining a plan to tax drivers by the number of miles driven instead of number of gallons burned. To do that, cars registered in the area would be fitted with a GPS device to track the number of miles traveled.

Drivers could be charged less than a penny or as much as a dime per mile. One estimate puts potential revenue from the system at $15 million a day.

If the thought of your city government knowing your every move sounds frightening, the Commission's spokesman, Randy Rentschler, says not to worry.

"The last thing we're interested in is where you go and what you do," Rentschler tells the Associated Press. "What we're trying to do is get people to figure out a way to raise revenue that they could support."

Still not convinced?Don't get worked up yet - it could take Bay Area governments as long as a decade to implement such an idea. By then we'll surely have flying cars, electric scooters or even molecular transporters.

Bay area residents could soon be taxed per mile driven originally appeared on Autoblog on Tue, 24 Jul 2012 09:14:00 EST. Please see our terms for use of feeds.

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Legal loophole allows GM to avoid paying federal taxes... still

Zach Bowman — Mon, 07 May 2012 09:28:00 EST

Filed under: Government/Legal, GM, Earnings/Financials

The United States tax code will never be accused of being simple or easy to comprehend. With a tangle of exceptions and loopholes, individuals and corporations can work their way around paying their full income tax rate with ease.

According to The Detroit News, General Motors continues to avoid paying its federal income taxes since the company exited bankruptcy. In 2008, the Treasury Department ruled that the automaker could use $18 billion in losses from "old" GM to offset any profits. That means from a tax perspective, GM still hasn't earned enough money to overcome its losses. The automaker has raked in more than $13 billion since 2009.

Of course, GM isn't the only company dodging the federal income tax. Ford, for example, payed $268 million in worldwide income taxes last year, despite claiming an income of $7.8 billion. Likewise, since Chrysler Group, LLC. is a limited-liability partnership, it isn't required to pay federal income taxes. According to The Detroit News, very few companies pay the full 35 percent federal corporate income tax rate.

But that doesn't mean GM or other companies get off entirely. GM says it pays considerable state taxes, and the company reports that its global tax rate for 2012 may jump to 12 or 13 percent, up from an earlier estimate of 10 percent.

Legal loophole allows GM to avoid paying federal taxes... still originally appeared on Autoblog on Mon, 07 May 2012 09:28:00 EST. Please see our terms for use of feeds.

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Ford CEO Alan Mulally called out as a tax dodger [w/poll]

Jeff Sabatini — Fri, 13 Apr 2012 19:28:00 EST

Filed under: Government/Legal, Ford

Remember Jetgate? Back in the pre-bankruptcy days of late 2008, when the Big Three CEO's were traveling to Washington to plead their case for funds, Ford's Alan Mulally, General Motors' then-CEO Rick Wagoner, and Chrysler's former chief Bob Nardelli were publicly chastised for flying in corporate jets to the tune of $20,000 per round trip.

Two years earlier, Ford president Mark Fields became a target of outrage when a Detroit-area TV station discovered that his employment contract included $50,000-$70,000 worth of private jet service per week to ship Fields between Dearborn and his home in Florida.

Now this: The New York Times is reporting that Ford spent spent $178,571 on personal air travel for Mulally last year. While Ford no longer has a fleet of corporate jets, according to the report, it pays a charter service to transport Mulally and his kin. And that's not all. Since this benefit is classified as "security measures," Mulally gets off the hook for paying taxes on it, as he doesn't have to report the benefit as income, according to the Times. Mulally received nearly $30 million in compensation last year, according to other reports.

While Ford refused comment, the article calls out the company for using this "common corporate tax trick" that it says robs the federal government of tax revenue from CEO's like Mulally, meaning that taxpayers are essentially subsidizing his perks.

While the report concerns various corporate executives, it singles out Mulally, suggesting that any potential danger to Ford's CEO has to be less than that posed to Supreme Court Justice Ruth Bader Ginsburg, who flies commercial airlines. The Times also says that former Apple CEO Steve Jobs "received no security services from Apple last year before he died."

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Ford CEO Alan Mulally called out as a tax dodger [w/poll] originally appeared on Autoblog on Fri, 13 Apr 2012 19:28:00 EST. Please see our terms for use of feeds.

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GM says Washington State's proposed electric car fee has "no merit" [w/poll]

Autoblog Staff — Fri, 16 Mar 2012 11:29:00 EST

Filed under: Government/Legal, Earnings/Financials, Electric

General Motors has gone on record to oppose a Washington State bill that would impose a fee of $100 per year on electric-vehicle drivers.

GM Regional Director Howard Lenox, Jr. wrote a letter on March 6 to Washington State Governor Christine Gregoire stating that the automaker, which makes the Chevrolet Volt extended-range plug-in hybrid, is against such a bill. The state is proposing the fee as a way for EV drivers to compensate for the gas taxes that they otherwise wouldn't be paying. The letter was posted on GM's The Future Is Electric blog.

"A fee which singles out electric vehicles will be a disincentive to the growth of the electric vehicle market in Washington State," Lenox wrote in the letter. "As a practical matter, there are so few vehicles on Washington's roads today that their impact in replacing fuel tax revenues will, for now, be negligible."

While drivers of the Volt actually wouldn't be subject to such a fee because its onboard generator is gas-powered, GM appears to be looking ahead as the automaker looks to electrify more of its fleet to meet more stringent greenhouse-gas emissions requirements.

Last month, Washington State passed Senate Bill 5251, which was introduced by Mary Haugen, the Senate's transportation committee chairwoman. The fee, which is subject to a vote by the state's House of Representatives, is estimated to add as much as $1.9 million to the state's coffers by 2017. Arizona, Oregon and Kansas are among other states looking at instituting fees that specifically target electric vehicle drivers.

What do you think, should states enact taxes on EVs to recover lost gas tax revenue? Vote in our poll below, then have your say in Comments.

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GM says Washington State's proposed electric car fee has "no merit" [w/poll] originally appeared on Autoblog on Fri, 16 Mar 2012 11:29:00 EST. Please see our terms for use of feeds.

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PSA: IRS lowers mileage deduction for 2010 - will you owe more in taxes?

Chris Shunk — Wed, 30 Dec 2009 11:00:00 EST

Filed under: Government/Legal

When gas prices rose in 2008, one of the few bits of good news was that the federal government was bumping up the business mileage deduction to 55 cents per mile. Now that gas prices have stabilized in 2009, the Internal Revenue Service has reportedly decided to cut back on some of its generosity. According to Wallet Pop, the new per mile rate is 50 cents, a nine percent decline from a year ago. The decrease will likely do little to the casual business traveler, but high mileage sales types and pizza delivery specialists will likely take a big hit to the pocket book when Uncle Sam reaches out his considerable hand on April 15.

Those who moved for work or traveled for medical expenses will receive an even bigger cut this year, down from 24 cents to 16.5 cents. It's difficult to understand why medical/travel mileage was cut so drastically, but we keep trying to remind ourselves that the IRS works in mysterious ways. Heck, we didn't even know you could claim moving and medical mileage, so this one is pretty much a bonus to us.

[Source: Wallet Pop | Image: Scott Olson/Getty]

PSA: IRS lowers mileage deduction for 2010 - will you owe more in taxes? originally appeared on Autoblog on Wed, 30 Dec 2009 11:00:00 EST. Please see our terms for use of feeds.

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Mass. governor pondering so-called "Hummer Tax"

Michael Harley — Mon, 09 Mar 2009 12:28:00 EST

Filed under: Car Buying, SUV, Truck, Government/Legal, Green, Hummer

Click above for a high-res gallery of the 2009 Hummer H2

The Governor of Massachusetts is backing a new state proposal to tax larger gas-guzzling vehicles each year when drivers register them. The so-called "Hummer Tax" would be the first in the nation, and it is designed to directly discourage ownership of SUVs and pickups. To further chill ownership of larger and more inefficient vehicles and steer buyers towards the small cars, the plan includes provisions to discount fees for owners with lighter and more miserly cars.

"It's a penalty for driving an SUV, which currently is not the popular choice. Or you're being penalized for a lifestyle choice, or maybe the fact that you have a large family and you need that size vehicle to put them in and it just doesn't seem fair," said Tim Lerchenfeldt, general manager of Cadillac Hummer Saab Village in Norwwood. He argues that now is not the time for additional fees, especially when the industry is struggling and sales across the board are down.

The transportation system in Massachusetts is suffering from more than a decade of neglect, according to Democratic Governor Deval Patrick, and the tax would be just one of the ways to raise the funds to foot the repair bill (the plan also includes a controversial 19 cent increase in the state's gas tax). While the "Hummer Tax" benefits from a lightning rod of a nickname, the premise of hitting select consumers who already pay more at the pump with yet another fee doesn't exactly sound universally welcomed.

Gallery: 2008 HUMMER H2

[Source: Foxnews]

Mass. governor pondering so-called "Hummer Tax" originally appeared on Autoblog on Mon, 09 Mar 2009 12:28:00 EST. Please see our terms for use of feeds.

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REPORT: GM lobbying Congress for $7B in tax relief

Jonathon Ramsey — Mon, 02 Feb 2009 10:59:00 EST

Filed under: Government/Legal, GM, Earnings/Financials, UAW/Unions

Ask for a little help from the government, and the next thing you know you're asking for the government to protect you from the very help it's giving you. General Motors is restructuring its debt load by offering equity shares instead of cash to debt holders, namely the government and the UAW. The UAW transaction concerns the VEBA health care fund in that GM wants to pay its obligation to the fund with shares.

The issue is that this transaction is a debt-asset swap and comes with a distressed asset tax (DAT) of $7 billion. The DAT was codified in 1986 to prevent companies from buying money-losing companies just to avoid paying taxes. In GM's case, the debt-asset swap counts as corporate income, but GM can claim it's 2008 losses against that income, greatly reducing its tax bill.

If the tax isn't waived, GM will need to immediately return $7 billion of the money it was just given. It is talking to the Treasury Department, but so far it's been no dice. GM has been lobbying to have a waiver provision put in the economic stimulus bill currently being wrangled over in the Senate, yet there's also been no movement there, either. It's almost inconceivable that the government will demand GM pay the tax. It's equally hard to believe that this is even taking place.

[Source: Detroit News via Market Watch]

REPORT: GM lobbying Congress for $7B in tax relief originally appeared on Autoblog on Mon, 02 Feb 2009 10:59:00 EST. Please see our terms for use of feeds.

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Germany joins EU in taxing CO2 emissions

Jonathon Ramsey — Thu, 29 Jan 2009 08:01:00 EST

Filed under: Europe, Government/Legal, Green

European car ads are always mentioning how many grams of CO2 a car emits because more than twelve European countries tax drivers based on those emissions. Germany, home to a cadre of automakers for which CO2 parsimony is not a prime consideration, has held out from the carbon dioxide taxation scheme, until now. The leading government coalition has finally agreed on a plan to tax CO2 output.

The only problem is that it doesn't really change much of the scheme already in place, and it's hit-and-miss. This, naturally, has Germany's environmental parties calling foul, yet the nation's domestic producers like VW, Audi, Porsche, Mercedes, and BMW initially gotten the government to consider lowering the taxes on gas guzzlers. In that light, the new taxation proposal could be seen as a victory, albeit a small one.

As it stands, the yearly tax will be calculated based on engine size and emissions, and smaller-engined, cleaner vehicles will pay less tax. An Opel Agila owner with a 1.2-liter engine and 120 gm/km would save €75, nearly a 40% discount from the current system. The owner of a V12 Audi Q7 wouldn't pay any more under the new regulations; however, someone buying a Mercedes GLK -- with a 3.5-liter V6, the biggest option available -- would pay 4.7% more.

The new taxing system will go into effect July 1 of this year. Although it now brings Germany into line with a majority of its European partners, if the greens have anything to say about it the issue is nowhere near being put to rest.

[Source: Der Spiegel via Automotive NewsWire]

Germany joins EU in taxing CO2 emissions originally appeared on Autoblog on Thu, 29 Jan 2009 08:01:00 EST. Please see our terms for use of feeds.

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Oregon considers taxing mileage, not gas

Jonathon Ramsey — Sun, 04 Jan 2009 10:54:00 EST

Filed under: Government/Legal, Green

Oregon ran a pilot program in 2006 and 2007 that fitted 300 cars with GPS receivers, which kept track of the cars' mileage. The receivers also kept records of when the cars were on the road, noting whether they traveled during rush hour or not. When the drivers went to several specially-equipped gas stations, they paid a mileage tax based on how far they had driven and when they drove, rush hour being more expensive than the wee hours.

Taxing mileage -- as opposed to trying to raise fuel taxes -- is an idea that's not only raising eyebrows, it's also raising interest. Seven other states are reported to be interested in finding a publicly-palatable way to tax mileage. A panel in North Carolina even recommended that drivers be charged a quarter-cent-per-mile for their year's driving. In such a scenario, after 15,000 miles you'd owe the state $37.50.

Naturally, the hurdles are many and it will be years before we see anything like this happening -- but beware: it's gone beyond "Let's think about it" to "Let's look into this." States envision working with manufacturers to get the standardized mileage-reporting technology installed in cars. In addition to the substantial privacy issues that would raised by such a move, there's a question of whether a flat mileage tax would blunt the move to energy-efficient vehicles -- the gent in the Prius might not be happy about paying the same as the gent in the F-250 Super Duty.

[Source: Yahoo!]

Oregon considers taxing mileage, not gas originally appeared on Autoblog on Sun, 04 Jan 2009 10:54:00 EST. Please see our terms for use of feeds.

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It's not just California: Michigan wants to raise the gas tax, too

Jonathon Ramsey — Sun, 28 Dec 2008 18:02:00 EST

Filed under: Etc., Government/Legal

California isn't the only one taking aim at the pumps in an effort to raise state revenue. The Michigan state legislature is also proposing a hike in its gas tax that could potentially make its gas taxes the highest in the nation. The current nineteen cent per gallon tax on gas, and fifteen cent per gallon tax on diesel, would be replaced by a simple 18% tax on the wholesale prices of both. Michigan says that the state isn't earning enough now that people are driving less, and driving more fuel efficient cars.

The reasons in for the tax are the same in MI as they are in CA: the transportation sector and road funding are sorely inadequate. Michigan has legendarily bad roads -- not the worst in the nation, but close in some cases. The oil and gas station lobby, however, wants none of it. One oil company exec said, "Cheap fuel prices are fueling the (economic) activity we have now. Taxing gasoline to fix roads is an old way of doing it." They are also worried that when gas prices inevitably go back up, the tax will make pump prices exorbitant.

A Michigan transportation rep said "We didn't necessarily see memos coming out from them when the price of fuel exceeded $4 a gallon." He also said that the tax is capped in the first couple of years, so no one needs to be concerned. The measure, along with a rise in DMV registration fees, is expected to raise $1.5 billion per year. If it doesn't pass this year, the legislature is expected to resurrect it next year. Hat tip to Braggin Dragon!

[Source: Michigan Live]

It's not just California: Michigan wants to raise the gas tax, too originally appeared on Autoblog on Sun, 28 Dec 2008 18:02:00 EST. Please see our terms for use of feeds.

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Ward's columnist wonders if Americans can handle the truth about gas taxes

Sam Abuelsamid — Sat, 27 Dec 2008 18:57:00 EST

Filed under: Car Buying, Trends, Government/Legal, Green

People have always had something of an aversion to hard truths. Most Americans say they want their country to get off foreign oil or help the environment, but when it comes to the bottom line, they want cheap fuel. And when the prices on gas pumps start to dip, consumer interest in smaller more efficient vehicles tends to go out the window. Understandably, drivers everywhere tend to make vehicle purchasing decisions in large part based on fuel prices.

Ward's Auto World columnist Drew Winters notes that executives like Bob Lutz have long advocated that fossil fuel prices need to increase in order to make more efficient vehicles appeal to consumers. But with U.S. consumers' almost instinctual avoidance of taxation, it has been difficult for politicians to consider such measures. Instead, it would appear that most constituents want government to mandate both more fuel efficient cars (through mechanisms like CAFE) and cheap gas without impacting the cost of automobiles themselves.

Winters paraphrases The End of Oil author Paul Roberts, noting that "every major fuel shift in history - from wood to coal to oil - was driven primarily by market forces, specifically by competitive advantages of the new fuel over the old." Thus, part of the solution may simply to make the fossil fuels more expensive relative to other energy sources.

Unfortunately, Winters surmises, it appears that nobody can handle this truth.

[Source: Ward's Auto World | Photo: GoodGreentips.com]

Ward's columnist wonders if Americans can handle the truth about gas taxes originally appeared on Autoblog on Sat, 27 Dec 2008 18:57:00 EST. Please see our terms for use of feeds.

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New York considering 5% luxury tax on expensive cars

Jonathon Ramsey — Thu, 18 Dec 2008 17:31:00 EST

Filed under: Car Buying, Etc., Government/Legal

New York Governor David Paterson needs to close a $15.4-billion budget deficit, and has proposed 88 new fees and taxes to do it. One of them is aimed at New York car buyers: a 5% tax on all cars sold for $60,000 or more. Notice the phrasing "sold for," not "MSRP of". That means if you add $8,001 in options to a $52,000 car, then you can add 5% to the final price. Intriguingly, the proposed new luxury tax on yachts doesn't happen until a buyer crosses the $200,000 mark, and not until $500,000 for planes. The bill would need to be passed by the legislature, but we can imagine that luxury car dealers in Connecticut and New Jersey are watching this one closely.

[Source: Automobiles Deluxe]

New York considering 5% luxury tax on expensive cars originally appeared on Autoblog on Thu, 18 Dec 2008 17:31:00 EST. Please see our terms for use of feeds.

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All VW and Mercedes diesels eligible for tax credit

Michael Harley — Mon, 11 Aug 2008 16:32:00 EST

Filed under: Hybrid, Sedan, SUV, Green, Mercedes-Benz, Volkswagen

We knew last month that the Jetta TDI was qualified for the tax credit. Now, word is out that all of the new-generation clean diesels for Volkswagen (TDI) and Mercedes-Benz (Bluetec) will be joining the elite handful of vehicles that qualify for a federal alternative-powertrain tax credit. Formerly reserved for just hybrid vehicles, the diesels have been designated as advanced lean-burn-technology vehicles that meet the Alternative Motor Vehicle Credit standards of the IRS. The credits vary based on the vehicle. In the case of Mercedes, the ML320 qualifies for $900 while the GL320 is good for $1,800. If diesel still isn't your thing, the IRS has also qualified several Ford hybrids as eligible too. Of those, the highest credit (a sweet $3,000) goes to those consumers who take home an Escape or Mariner two-wheel drive hybrid crossover.

[Source: Automotive News, subs. req'd]

All VW and Mercedes diesels eligible for tax credit originally appeared on Autoblog on Mon, 11 Aug 2008 16:32:00 EST. Please see our terms for use of feeds.

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Round Three: Mayor of London rejects Porsche, we're going to court

Michael Harley — Tue, 11 Mar 2008 12:32:00 EST

Filed under: Europe, Government/Legal, Green, Porsche, UK

Ding, ding... Round Three!

When the city of London decided in November 2006 to tax gas-guzzling, emission-spewing vehicles (aka sports cars), we knew someone would put up a fight. It didn't take long before Porsche, the enthusiast-oriented German automaker, stepped into the ring. Round One started last month, after London's Mayor Ken Livingstone decreed that a $50 daily tax shall be levied against all environmentally unfriendly vehicles that drive through his city beginning this October. After Porsche formally requested the mayor reconsider his plan or else it would call for a judicial review of the proposal, the Mayor kicked off Round 2 by accusing Porsche of imposing unnecessary pollution on Londoners and then compared the brand's sports cars to garbage littered on the street.

After consulting with its ringside trainer, Porsche has chosen to involve a legal referee in this match and make a formal application for judicial review to challenge the matter. Once the papers are filed, Mayor Livingstone's corner will have 21 days to acknowledge the claim. Don't expect the Mayor's office to throw in the towel -- most expect this bout to go the distance.

[Source: Porsche]

Continue reading Round Three: Mayor of London rejects Porsche, we're going to court

Round Three: Mayor of London rejects Porsche, we're going to court originally appeared on Autoblog on Tue, 11 Mar 2008 12:32:00 EST. Please see our terms for use of feeds.

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Mulally not proposing a gas tax - but he's not against it

Jonathon Ramsey — Thu, 09 Aug 2007 18:02:00 EST

Filed under: Government/Legal, Green, Ford

The hallmark of the environmental debate is that there are so many important players on so many different sides. Eminent scientists and intellectuals have taken every side of the debate, challenging their eminent colleagues. When it comes to the two most involved and highly charged players, the automakers and politicians, things get even more curious. On the same day that Bush opposed a gas tax to give states more money to repair bridges, Alan Mulally said he supports the idea of a gas tax to encourage customers to buy more fuel efficient vehicles.

Mulally believes Congress' CAFE standards represent failed policy and has hurt automakers. Regulating fuel efficiency has, in his opinion, only lead to consumers buying more cars and driving more. While making sure to stress that he and Ford are all in favor of fuel efficient vehicles and environmental health, he wants some of the onus put back on consumers. He said, "I just think it's so important that we all join in this debate and we really decide what we want to do about energy security and global warming. A piece of that could be a tax."

[Source: Detroit News]

Continue reading Mulally not proposing a gas tax - but he's not against it

Mulally not proposing a gas tax - but he's not against it originally appeared on Autoblog on Thu, 09 Aug 2007 18:02:00 EST. Please see our terms for use of feeds.

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Canada's new budget will add $4,000 tax to SUVs

John Neff — Wed, 21 Mar 2007 15:02:00 EST

Filed under: Government/Legal

The Canadian government's new proposed budget includes both a $2,000 incentive for buying fuel efficient vehicles like hybrids and a $4,000 tax for purchasing less efficient models like SUVs. Unfortunately, the Detroit News article doesn't specify how the budget determines what vehicles qualify for the fuel efficiency rebate and which get dinged with the heavy tax.

What affect the Canadian government's new budget will have on car buying habits in the country is unclear, as Canadians don't buy many SUVs to begin with - only around 15,000 in 2006. At the same time, the environmentally-inspired incentive/tax combo may serve to irritate the very automakers that are deciding which plants they can afford to idle or shut down completely, many of which are located in Ontario.

The plan also has plenty of loopholes that can be used to get around the tax. For instance, it doesn't apply to used vehicles, so Canadians can freely buy year-old HUMMERs for significantly less than a new one. There's always the option of driving south to purchase a car in the States, as well, though we're not clear what mess of paperwork that would create to own and operate it back in Canada.

You can read all the details about Canada's new budget and how it affects the auto industry here.

[Source: The Detroit News]

Canada's new budget will add $4,000 tax to SUVs originally appeared on Autoblog on Wed, 21 Mar 2007 15:02:00 EST. Please see our terms for use of feeds.

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Congressman wants to close SUV tax loophole

John Neff — Tue, 05 Sep 2006 14:59:00 EST

Filed under: SUV, Government/Legal

Congressman Ed Markey (MA) has released a new report entitled Tipping the Scales to coincide with a bill titled H.R. 5579, the No Special Subsidies for Gas Guzzlers Act. The report focuses on the tax loophole that exempts people purchasing an SUV from paying a gas-guzzler tax, which is normally applied to the purchase of any vehicle returning less than 22.5 mpg. The report points out that, for instance, someone buying a 20.5 mpg Audi gets dinged by a $1,300 gas-guzzler tax, while someone purchasing a 15.8 mpg Jeep pays no extra tax. Congressman Markey's bill would also close a "loophole" that allows business owners to write off most of the cost of an SUV, but not other types of vehicles.

Fair enough. Joe Average consumers should not be exempt from a gas-guzzler tax on an SUV that will be used for soccer practice runs and towing the family boat. However, legitimate businesses that require the utility an SUV or large truck provides shouldn't be penalized, either. To close the loophole may mean that the landscaper down the street has to pay a gas-guzzler tax on a vehicle that his business requires, which is a different proposition altogether. That is, of course, unless you want to argue that no business requires a body-on-frame SUV, but we're doubting that's the case.

Markey's report estimates that the loophole will cost taxpayers $2.6 billion next year and $15.7 billion over the next decade. While the current tax law at stake here needs some attention, rather than just closing the loophole, perhaps some intelligent people should sit down and revise the law so that it doesn't encourage consumer purchasing of extra large SUVs but also doesn't penalize those business and industries that require vehicles like this.

Oh, and it would be a lot easier to take Mr. Markey's argument more seriously if someone had the caught the reference in his report to a "GMC Yukon Sierra", which technically doesn't exist. You can get a Yukon SUV or a Sierra truck, but you can't get both in one without a head-on collision.

[Source: Wired]

Congressman wants to close SUV tax loophole originally appeared on Autoblog on Tue, 05 Sep 2006 14:59:00 EST. Please see our terms for use of feeds.

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PSA: Still time for the U.S. hybrid tax credit

Erin Mays — Thu, 06 Apr 2006 17:03:00 EST

Filed under: Car Buying, Hybrid, Government/Legal, Green, Ford, Honda, Toyota

Looking for an easy tax credit? Look no further than the U.S. tax credits for hybrid vehicles. While the program's days are numbered, our friends over at Treehugger tell us that the program isn't extinct yet.

60,000 vehicles is the magic number of hybrid each manufacturer can sell and still have buyers net a tax credit of up to $3,400. Only Toyota is close to that unit total, with the expectation that they'll hit it later this fall. Honda may not hit it this year after having sold just over 40K, and with only 3,475 Ford Escapes having found their way off the lot, there's no immediate fear that Ford will hit that 60K in the near future.

[Source: Treehugger]

PSA: Still time for the U.S. hybrid tax credit originally appeared on Autoblog on Thu, 06 Apr 2006 17:03:00 EST. Please see our terms for use of feeds.

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