I think the main cause for the gas crisis that we are currently experiencing in this country (aside from mother nature) is the fact that SOOOOO many people choose to drive vehicles which are so fuel inefficient.... So, if I were running the show, I would propose the following additions to the tax code:
All persons who drive vehicles which get less than 20.1 mpg are assessed an annual tax.... This tax will be determined according to the following formula:
x = fuel efficiency of the vehicle in mpg
inefficiency tax = (1/x)(1/x)(200,000)
And all persons who drive a vehicle which gets greater than 27.0 mpg fuel efficiency will be able to claim a tax deduction determined by the following formula:
x = fuel efficiency of the vehicle in mpg
efficiency deduction = (x)(x)
Any additional funds left over from the inefficiency tax which are not used to cover the tax loss associated with the efficiency deduction will then be used to fund research into alternative fuel vehicles.....
Let's look at a real life example..... For the sake of discussion we will assume that our tax base consists of only 2 people - Susie Homemaker and John Treehugger....
Susie Homemaker drives a Chevy Suburban which gets 14.5 mpg...
John Treehugger drives a hybrid vehicle which gets 33.0 mpg... He is single, works at a job earning $40,000 per year, and for the sake of discussion we'll say he claims no other deductions....
The net change in the taxes John pays because of his deduction are as follows:
At $40,000 per year (in 2004) he would normally pay $6,744 in federal income tax.... With his deduction he would only pay tax on $38,911... Which would require him to pay $6,469... The net decrease in John's taxes based on his fuel efficiency deduction is $275.00... (note: we will only allow people to claim 1 fuel efficiency deduction per year in order to prevent them from buying 10 highly efficient vehicles in order to reduce their tax burden to zero)...
So the leftover money which would be used on research into alternative fuel vehicles would be: $951.25 - $275.00 = $676.25
This is assuming our tax base consists of only 2 people, one of which drives an inefficient SUV, and the other of which drives a highly efficient hybrid vehicle.... If you were to imagine the numbers assuming a tax base of 300-million people, MANY of which drive an inefficeint SUV and very few of which drive super efficient hybrid vehicles, you would find that the money going into research would be in the hundreds of millions.....
Now, consider the impact that such a policy would have on consumer choices.... Think of how many people would choose NOT to buy a gas guzzling SUV if they knew they would be paying a tax for the privilege that might average between $700-$1000 depending on the model they bought.... And think of how many people would demand highly effecient vehicles which could earn them a tax deduction of up to $3600 for a vehicle which got 60 mpg.... The end result would be a WHOLE lot more people wanting to buy super efficient vehicles, and a WHOLE lot fewer people wanting to buy the gas hogs.... How do you think the car companies will respond to that? Seems reasonable to me that the laws of supply and demand would require that they start producing more vehicles which get better than 27 mpg, and fewer vehicles that get fewer than 20.1 mpg.... Right?
And in the meantime, while this shift in consumer demand occurs, the government will earn a tax surplus in the hundreds of millions of dollars to put towards research into alternative fuel vehicles, which will eventually decrease our dependence on foreign oil, clean up our environment, and generally make life better for all Americans....
Using taxes to try and change behavior is nothing new but in this case the laws of supply and demand will eventually work. As gas prices go up, people will eventually change their habits and buy more fuel-efficient vehicles on their own. Moreover, as gas prices rise other forms of energy will become more cost-effective in comparison. I would favor letting the marketplace solve the problem without getting the government involved. Politicians are notoriously bad economists and will probably fark it up.
One other thing, not to be rude but this is a pretty easy plan for a guy living in Florida to come up with. I have lived several areas where 4-wheel capability is not just a luxury. I used 4-wheel several times last winter and it wasn't even that bad of a winter. It can mean the difference between getting to work or not, or being able to stay on the road and not slide off. Another thing, there are plenty of farm families here that have trucks as their single vehicle (except for tractors, etc.) which is used for light farm work plus getting to the store, getting the kids to school, etc.
If you need the gas guzzler to lug several people (meaning over 3 other people) or cargo around all the time, I have no problem with you using it. It's the freaking 20 year old kids that have no other reason to have an SUV other than to look cool that bug me.
I drive a Neon that gets like 25-28 mpg. I have no problem with the car because I don't care how I look when I drive. Half the time I'm singing so loudly while driving that I'm sure I look like a goofball anyway. But, I only have to get gas once a week, and I wouldn't have it another way.
People better start figuring out that their vehicles are costing them and everyone else more money. Gas companies have people by the nuts because you need gas to go places, especially work (unless you like 2 miles away). There is no major public transportation in my podunk area, so I can't fall back on that. One of my co-workers drives 100 miles a day to get to work. She drives a Grand Caravan...it's because she needs it to carry her husband's disc jockey equipment in at night and because he also uses it for his woodworking business.
She will be starting to look for a new job very soon because it's just too much now.
Anyway, I liked Plindsey's idea...I'm sure it won't happen, but sadly it seems like people need to be shocked into reality at some point.
Last edited by Mercer Boy on Wed Aug 31, 2005 9:05 am, edited 1 time in total.
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Mercer Boy wrote:If you need the gas guzzler to lug several people (meaning over 3 other people) or cargo around all the time, I have no problem with you using it. It's the freaking 20 year old kids that have no other reason to have an SUV other than to look cool that bug me.
Im 17 and drive a pathfinder... living in new england though it is needed, well not needed, but it helps, in the winter and my dad didnt want me driving a small car because of the snow, and he felt id probably crash somehow.
but i do need the trunk space for my brothers and my hockey crap... just the 16-18 mpg kill my wallet
Plindsey, not a terribly bad idea, and I like the notion, but there are several complications I foresee:
1) Many vehicles get different mileage per gallon depending on how they're driven (city streets vs. highway). How would that come into effect? Would people who drive in the city more often be paying more for the same gas mileage car than those that only drive said car on highway?
2) What about someone who owns an SUV and a fuel-efficient car? Which cateogry would they fall into? Would it be based on which one they drive more often? How would you enforce such a breakdown? etc
3) And this is the one that kinda hits home to me. Ok, SUV's are one thing, but a lot of young people, I'm talking your 16-24 crowd, don't have parents to give them nice cars be they SUV's or fuel-efficient, so they have to buy substantially older cars. These older cars, naturally, don't get great gas mileage. So, now these young people would get taxed more under your proposed solution, when they don't have any feasible other option for a car.