The Push to Repeal Federal Excise Tax for Cleaner Transportation
Trucking and transportation groups, including the American Trucking Associations (ATA), American Truck Dealers (ATD), and Zero Emission Transportation Association (ZETA), are urging Congress to repeal the federal excise tax (FET) on heavy-duty trucks. These organizations believe that the century-old tax is obstructing the deployment of cleaner, more environmentally friendly trucks on American roads.
The Impact of the Federal Excise Tax on the Trucking Industry
The federal excise tax was first implemented in 1917 to help cover the costs of World War I. Today, it adds a significant 12 percent to the cost of a new truck. This creates a major disincentive for both small and large trucking fleets to modernize their equipment and replace older, high-emission tractors with new, low-emission power units.
The Cost Barrier to Cleaner, Energy-Efficient Trucks Due to Federal Excise Tax
The FET can add more than $50,000 to the price of the latest low or zero-emission vehicle, making these investments cost-prohibitive for smaller fleets. According to a statement from the organizations, more than 90 percent of U.S. motor carriers operate six or fewer trucks. Scott McCandless, ATD chairman and president of McCandless Truck Center of Aurora, Colo., said, “The federal government wants heavy-duty trucks to be cleaner or emission-free but slaps a 12-percent tax on the newest, greenest trucks. If the goal is to reduce emissions, repealing the counterproductive FET is a good place to start.”
The Environmental Impact of Transportation Emissions
Albert Gore, executive director at ZETA, pointed out that “medium and heavy-duty trucks account for 24 percent of all transportation carbon emissions in the United States, but represent only 4 percent of vehicles on the road.” Repealing the federal excise tax would help accelerate the transition to modernized transportation fleets while enabling fleet operators and truckers to contribute to this effort.
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The Modern, Clean and Safe Trucks Act for a Greener Future
In the 117th Congress, U.S. Senators Todd Young (R-Ind.) and Ben Cardin (D-Md.), and Representatives Doug LaMalfa (R-Calif.) and Chris Pappas (D-N.H.) introduced the Modern, Clean and Safe Trucks Act (H.R. 8116/S. 2435), bipartisan and bicameral legislation to repeal the tax. This act aims to remove the financial barrier preventing the widespread adoption of cleaner, more energy-efficient trucks in the United States.
As the transportation industry plays a critical role in addressing climate change and reducing emissions, repealing the federal excise tax on heavy-duty trucks could be a significant step forward. This move would not only benefit the environment but also help modernize the trucking industry and make it more competitive on the global stage.
With the support of various stakeholders, including trucking companies, environmental organizations, and policymakers, the push to repeal the federal excise tax has gained momentum. The collective efforts of these groups have highlighted the urgent need for cleaner and more energy-efficient heavy-duty trucks in the transportation sector, which is a significant contributor to greenhouse gas emissions.
Benefits of Repealing the Federal Excise Tax
Repealing the federal excise tax would bring about numerous benefits to the trucking industry, the environment, and the economy. Some of these advantages include:
Accelerated Adoption of Clean Technologies
By removing the financial barrier posed by the FET, trucking companies would be more inclined to invest in cleaner, low or zero-emission vehicles. This would lead to a faster transition to eco-friendly transportation solutions, ultimately reducing the carbon footprint of the trucking industry.
Enhanced Competitiveness in the Global Market
Modernizing truck fleets with advanced, energy-efficient trucks would not only help reduce emissions but also improve the competitiveness of the U.S. trucking industry. With cutting-edge technologies and lower operating costs, American trucking companies could better compete in the global market, creating new opportunities for growth and expansion.
Job Creation and Economic Growth
The increased demand for cleaner trucks could lead to the expansion of the clean transportation sector, creating new jobs in manufacturing, maintenance, and research and development. As a result, the repeal of the federal excise tax could contribute to economic growth in the long run.
Improved Public Health and Air Quality
Reducing transportation emissions would lead to better air quality and, consequently, improved public health. The widespread adoption of cleaner trucks would decrease pollution-related health issues, such as respiratory problems and heart diseases, lowering healthcare costs and enhancing the overall quality of life.
Challenges and the Road Ahead
While the effort to repeal the federal excise tax has garnered support from various sectors, there are still challenges that need to be addressed. For instance, finding alternative funding sources to offset the loss of revenue from the tax would be crucial for maintaining essential government services and infrastructure investments.
However, with the growing awareness of the environmental impact of transportation emissions and the increasing demand for cleaner, energy-efficient trucks, the movement to repeal the federal excise tax has the potential to bring about significant changes in the trucking industry and beyond. The continued collaboration between industry stakeholders, policymakers, and environmental advocates will be essential in overcoming these challenges and realizing the goal of a cleaner, greener future for transportation.
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Below are some external resources that provide further information on the federal excise tax and efforts to repeal it:
- American Trucking Associations (ATA) – Federal Excise Tax Information: ATA Voices Support for Bipartisan, Bicameral Effort to Repeal Truck Excise Tax This resource offers insights into their efforts, arguments, and collaborations with other organizations.
- Modern, Clean, and Safe Trucks Act – Congress.gov: H.R.8116 – Modern, Clean, and Safe Trucks Act of 2022 This official resource from Congress.gov provides information on the Modern, Clean, and Safe Trucks Act, which is a bipartisan and bicameral legislation aimed at repealing the federal excise tax on heavy-duty trucks.
- Congressman Chris Pappas – Federal Excise Tax Repeal Bill: Pappas, LaMalfa Reintroduce Bill to Repeal Federal Excise Tax on Heavy Trucks This official site for Congressman Chris Pappas (NH-01), a member of the House Small Business Committee, provides press release information on bill to repeal the federal excise tax on heavy duty trucks he has put forth with Congressman Doug LaMalfa (CA-01).
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