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The annual registration tax on passenger vehicles should not be directly linked to their gas mileage.

The Registration Tax

Fossil fuels are not an indefinite source of energy and motor vehicles are a major consumer of such energy. Environmentalist urge car manufacturers to increase fuel economy and lower emissions that pollute the air and are believed to cause global warming. A simple increase in the annual registration tax on poor fuel-efficient vehicles would not be the best answer to the problem as it only provides a mediocre short-term solution. For the best long term results, the US Government should increase funding for hybrid and hydrogen fuel cell vehicles and set a date for production. The increased funding would be paid by an increase in the gas tax from the current eighteen cents per gallon.

US roads are cluttered with a truck-biased public. The Ford F-150, a full-size pickup, has been the number one selling vehicle for the past twenty-three years in the US (AutoChannel). Few of these vehicles are actually used to for what they are made for, utility. “Soccer moms” drive large SUV’s on city streets to pick up their two children and a few bags of grocery.

The US Government has been a key player in increasing fuel economy by passing bills that require certain emissions and miles per gallon. Vehicles that do not meet these standards are taxed. The Gas Guzzler tax is one that if the mpg is in certain ranges (starting at 22.5 mpg and lower), it is taxed anywhere from $1,000-7,000(Form 6197). One problem is that “light trucks” are exempt, this includes pickup trucks and SUV’s which are of course the main gas guzzling vehicles on the road.

Nearly all fuel economy, emissions, and even some safety regulations that hold true for “passenger cars” do not apply to SUV’s, pickup trucks, or any of the larger commercial vehicles. Now even though the commercial vehicles do not hold a substantial market share and nor would it be economic for the Government to regulate them, SUV’s, pickup trucks, and minivans out number (since 2002) sedans and coupes in new car sales and thus it is essential that the Government step up and regulate them (Brown).

In order to implement an increase in registration directly related to the fuel efficiency of a vehicle, one faces several issues. First off, it creates a double taxation on some cars due to the current Gas Guzzler tax. Second, the miles per gallon (mpg) cut-off for the tax would have to vary depending on either the size, weight, type or other methods which would in no way be completely fair across the board. Third, the bill would need to either slowly increase the mpg requirements or revisit the bill often.

As the National Corn Growers Association (NCGA) reports, the US consumed 131 billion gallons of gasoline in 1999. With an average increase of one percent per year, the estimated consumption for 2005 is 139 billion gallons. In the FY 2005 budget, there is only 318 million dollars allocated to hybrid and hydrogen research (Committee on Science). If the gas tax is increased by just two cents to twenty cents per gallon, that would raise an additional 2.78 billion dollars which could go towards new research for hybrid and hydrogen vehicles.

Another problem is that many automotive manufacturing and petroleum lobbyist in Washington strongly oppose any tax or other regulation that make them loose money in their enormous markets. Raising the minimum mpg for vehicles would cause either a decrease in horsepower in vehicles or an increase in cost due to the tax and extra cost of implementing high-tech and fuel-efficient parts. The registration tax would also indirectly affect the petroleum market, as less gas consumption would be a result of such actions.

The purpose of these regulations is to lower emission and gas consumption, not to penalize someone for buying a SUV. If a SUV has the same fuel economy as a car, equal regulations should apply. Equally valid is the point that a vehicle rarely driven should not be unproportionally taxed more than a vehicle driven often. If a vehicle is driven rarely, it will logically consume less gas and pollute less than a similar one driven often. It is not feasible to have separate registrations for cars driven daily and cars driven less/more often as it is not enforceable but you can base usage on gas consumed.

Supporters of the annual registration tax on passenger vehicles being inversely proportional to their gas mileage have a few issues to look at: Bob buys a truck as a second vehicle to haul his boat to the lake every summer and thus only puts 5,000 miles on it a year. Bob drives his mid-sized car daily and puts 15,000 miles on it a year. Overall, his car consumes more gas than his truck even thought his car is more fuel-efficient. Why should Bob have to pay more registration tax for a vehicle he does not use often. By taxing gasoline itself, you are making both the car and truck owners pay for the amount of gas they are consuming. If one has a fuel-efficient car, the tax will not affect them nearly as much as it would one with a gas guzzling SUV.

These are still only short-term solutions. The only way to truly provide long-term results is to move the current petroleum-based motor vehicle production over to a hydrogen fuel cell one. Some critics believe that hybrid vehicles will have sixty percent of the market share by 2024 and only hydrogen vehicles will be sold by 2038 (“The Hydrogen Economy”). There are hybrid vehicles on sale currently and current hydrogen fuel cell vehicles in testing for production but even so the transition from completely petroleum based to fully hydrogen based will be slow and only possible with government intervention to promote such a large market shift.

This requires major changes but these changes need to start now so that a quarter of a century from now, everything will be in place for a purely hydrogen fuel cell population. Gas stations have to change over to hydrogen ones and supply lines have to be modified as well. The oil companies do not want to spend billions switching over to hydrogen before car manufactures produce hydrogen cars and car manufactures do not want to produce cars without having fueling stations for them. The only way to overcome the hen or the egg problem is to have the government step in to organize a gradual simultaneous switch.

The annual registration tax should not be the means of taxing fuel efficiency as it has to many inconsistent factors and is too difficult to enforce. Any tax on consumables should be based on actually not theoretical consumption. Instead of incorporating a fuel efficiency tax in the annual registration tax, it should be part of the federal tax on gasoline at the pump because that enables the consumer to be taxed based on their consumption of gasoline.

AutoChannel. “Ford's F-Series Sets Industry Truck Sales Records” [web page] Jan 4, 2005; [Accessed Apr 17, 2005]

Brown, Warren. Washington Post. “More and More Americans Prefer Trucks, Not Cars - Industry Overview - Column” [web page] Feb 14, 2003; [Accessed Apr 17, 2005]

Committee on Science. Committee on Science, House of Representatives, One Hundred Eighth Congress, Second Session. [web page] March 3, 2005; [Accessed Feb 2005]

Form 6197. “Gas Guzzler Tax” [web page] Jan 2004; [Accessed Feb 2005]

National Corn Growers Association. “Frequently Asked Questions” [web page]; [Accessed Feb 2005]

“The Hydrogen Economy”. The National Academies Press. 2004. [web page] [Accessed Apr 17, 2005]

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