Greenie vs. Guzzler Tax Proposed

Leave it to the legislators in California to come up with this innovative and provocative little tax idea. Assemblyman Ira Ruskin is proposing a “Clean Car Discount” bill that would tax drivers of low-mileage vehicles up to $2,500 while giving rebates of equal amounts to drivers of more efficient vehicles.

The Hummer versus Prius fight would rest on a sliding scale where owners of slightly offensive vehicles would pay as little as $100 or as much as $2,500, with equivalent rebates on the other side. Some 25% of vehicles in the middle of the green versus guzzling pool would get no rebate or fee.

Is this the way of the future? Some commenters in the debate have said there are already too many new laws on the California books regarding emissions that haven’t taken effect yet and should be evaluated before more regulations are passed. Why an added gas tax wouldn’t have a greater effect is another question.   

[Paying the Price for an SUV, San Jose Mercury News]

Comments

Many times have I said this - more taxes on gas guzzlers is a great idea. Now, first to defend myself from those truck & SUV lovers - USA is NOT a special country in this world; it's just another country - pretty much the same as those in Europe & Asia. They, too, have farmers and contractors! Yet, these taxes are and have been in the daily lives of those people. And please, don't say "go live in those countries" crap, 'coz even if I do live in those countries, *it doesn't give u the permission to pollute the atmosphere, which the entire world share. Besides, if you are a true contractor/farmer that needs the trucks for work, you can either buy a gas efficient truck (available in both Europe & Japan) or apply for special tax-exempt permit. Yes, that will add cost, but hey, look at * again!
Moreover, non contractors/farmers will have to pay a hefty price now to drive those gas guzzlers, so the new taxes will definitely defer them to purchase those vehicles. Look @ Asia & Europe! Most "common" people select to purchase fuel efficient vehicles because of their high taxes on gas guzzlers! Rich ones, of 'coz, are the exception, but if you can afford those MB/RR/etc, there's no law banning them to do so.
The 1 thg that I'll see from the greatest opposition is support for those pro-dom. But look, world changes, time changes, and business must change too! If you # bet your entire farm on 1 egg (selling SUV and trucks), then you are essentially leading yourself to your own tomb. Look @ Toyota, Nissan, Honda, VW, MB, Audi, etc...they have BOTH cars line-up and SUV/Truck line-ups, with BOTH being invested evenly more or less. But when u look at the dom, although they also have both cars and trucks/SUV, emphasis has always been paid to the trucks/SUVs 'coz they WERE the $$$ maker. Even Bob Lutz said it himself (in a way). With gas prices only going up, as history has indicated...go check out #

It's certainly true that Americans don't have special needs which don't exist in Europe; Americans have *wants* that don't exist in Europe . Those wants aren't going to go away just because they're less economical. If you're wiling to piss away $50K on a Hummer that you don't need then endure the enormous maintenance, fuel, and insurance costs will you really care about an extra $2500? I'm not saying the economic incentives won't have an effect, just don't expect everyone to trade their pickups for compact cars.

I think a crippling gas tax would be more effective—or at least fair. The amount of gas someone consumes is what matters; not the rate at which they consume it. I know of someone with a Honda Insight who burns about 25 gallons per week due to his 130 mile commute (each way). Like everyone else who owns an Insight he likes to compare it to a Ford Excursion and claims he's saving a huge amount of money while saving the earth, but I don't really think he deserves any reward.

and don't forget the mega commute (90+ miles each way) is getting MORE common in the U.S.

The mega commute is not really a choice as where a vehicle purchase is. With real estate prices the way they are, many people find themselves outpriced in the localities where they work. I don't think we can say someone is greener than someone else because his/her salary allows them to commute a shorter distance.

Gas taxes are very short sighted and very far reaching. They affect the entire economy and are very inflationary. Gas taxes are not the answer. American motoring needs are very different from those in Europe. American cities are sprawling and the distances between cities are far greater than in Europe. Americans travel many more miles by car annually than Europeans do and small cars do not handle long distances well, and are just not as durable or as safe as larger vehicles.
American motoring needs are similar to those in Australia, but probably nowhere else. Anyone who suggests that our needs are the same as Europeans is obviously speaking without any knowledge of the subject matter.

To Al...

The solution IS to charge more to those who pollute more, so that locational decisions will be made that reduce CO2 put in the air. It's a tough pill to swallow, short term, as much of our society has developed in response to low oil prices. Well, in order to affect change in the opposite direction, and encourage denser land-use patterns that bring things together (as in parts of the northeast), we need to create disincentives to driving long distances. A CO2 tax, based on miles driven and MPG, is the most direct way to penalize those making the decision to drive long distances AND buy inefficient vehicles. This of course needs to be coupled with strong land-use incentives towards densification, and a concensus among citizens that agree this is necessary to fix the problem.

Now, a law to penalize those who decide to buy inefficient vehicles and reward those who buy efficient vehicles is a good idea and should be encouraged if you truly care about preserving our environment. I say it should be even more drastic, maybe $5000 to tax the Hummer and a $5000 credit to the Prius.

Actually Al, wonder if you've been to any of the European, Australian and Asian countries (which I have). Don't be short-sighted by giving yourself an excuse of "Americans are different." No, we aren't. We have metro cities, than rural areas. Same for many European countries (Germany, France, England, Italy, etc.) and Asian Countries (Japan, Taiwan, Hong Kong, Korea, Thailand). MOST people lives in the cities, with less number living in the rural areas. And if you think that small cars do not handle long distances well and are not as durable as large vehicles, this tells me that you are just speaking out of your own mind with no proof at all! It's not that small cars can't be made to durability and safety (example, Corolla, Sentra, and many others); its weather the manufacturere can make them durable or safe...Besides, if you use the idea that larger cars are safer and more durable to sacrifice fuel economy, then someone else will just build a EVEN LARGER one, and then someone else again will build sthg even MORE larger than the even larger (hello? Gas mileage anyone?)...now see your excuse is getting no where? We have many data to suggest that smaller, gas efficient vehicles are just as safe as the gas guzzlers!

And to tell yourself that "Americans travel many more miles..." - that's just a perfect example why we DON'T need a gas guzzler! Stop making unnecessary trips! Besides, we can use the tax $$$ to build better public transportation, such as bullet trains like in Europe and Asia, instead of driving personally between major cities. See, now that's smart thinking, and people who prefers driving many miles alone/with family (like you've suggested) needs to be educated on this type of alternate ideas...

So please, don't give yourself this type of excuse for driving a gas guzzler and get away from polluting the planet for free! Remember, we share this planet. Go to those countries; study and analyze the many scientific data that are available on the internet/worldwide on transportation, before suggesting that "we are different." Your polluting lifestyle is not an excuse for the rest of the world to suffer; YOU DON'T OWN THE AIR AND THE NATURE, U KNOW?

P.S. Australia also has this type of tax law, but you are forgetting one thing, Al - their population (drivers) are much lower than the US, so it's still a LONG way before they can compare to the US' situation...wonder why you've neglect to mention that...

The idea of gas tax vs. gas guzzler tax comes down to who pays it. A new gas tax would immediately affect everyone in the economy (well, everyone who drives, which is still the majority). A gas guzzler tax only impacts those purchasing new vehicles. It's a more progressive system. Those being charged the additional tax are those that are wealthy enough to afford a new vehicle. The poor and lower middle class don't buy NEW vehicles, so this tax doesn't dig into their already incredibly stretched finances. Sure, in the coming years used car prices will increase to reflect the higher initial cost, but in the short term this is effectively a tax only on those well enough off to pay it. This would be true even on just a flat, across the board new vehicle tax.
The proposed gas guzzler tax here, however, goes further. It aims to shift consumer demand by very directly lowering the price of certain vehicles and raising the price of others. Since monthly payment is still the number one deciding factor when a consumer purchases a vehicle, it should be quite effective. And since (as any economist who's sober will tell you) supply always follows demand, this should encourage automakers to manufacture more fuel efficient vehicles. It sounds like rather than complaining about why automakers don't do so, someone decided to do something about it. A simple gas tax wouldn't do that, as your monthly payment wouldn't change, people would be required to think ahead before purchasing a gas guzzler, something they're not prone to do.
With fewer gas guzzlers available to the used car market, their used price will also rise, making them less affordable (and at the same time making fuel efficient cars more affordable) to the poor and lower middle class. This creates another added social benefit, as more of these individuals could now afford a more fuel efficient vehicle, which will save them even more, and help their stretched finances rather than hurt them as a gas tax would do.

maybe we should be more concerned with emissions regualted in china and other countries that are polluting the earth more than north america itself.

First,
let's remember there is a gas guzzler tax in this country (The U.S.) it just doesn't apply to many vehicles.

Second,
If you have a long commute a larger car is usually more comfortable but there are plenty of folks that drive economy cars on these distances with no complaints.

Third,
as far as mega commutes I think if you took Chicago where it is very expensive to live and you talked to the folks that do the mega commutes they buy in these rural areas because they can have a huge home compared to a modest one for a similar price in the city. It's not that they can't afford the city, they just want more home for the money. It's a tradeoff. Just like a 90 mile commute is part of that trade off.

I think most of the places around Chicago (just an example) are under 90 miles, like NW Indiana and Southern Wisconsin but still quite a ways away where I'd rather have a Camry rather than a Corolla (as an example).

Hay guys this is cars.com not treehuggers.com. Get a life i love cars more then the earth, as should all you "car guys".

Matt, you really need to have ur head examine. Yes, we love cars, but that doesn't mean that it's EVERYTHING there is! We are car guys, but more importantly, we are humans, and not all humans are car guys, u know...Without Earth, there is no cars...can't say the otherwise though!

LM: I've lived abroad, including Australia, can say G'day Mate with a British accent and have been to Europe and traveled extensively. I personally use as few resources as is reasonable, drive a relatively economical V6 and I don't condone large SUV's. In fact, I find them socially unacceptable, and a gluttoned and excessive consumption of resources.
Notwithstanding the above, I still consider a gas tax an evil tax that has consequences far greater than it's green intentions. A gas tax becomes a revenue weapon for greedy governments and as mentioned before, has fundamental ramifications for the entire economy raising the cost of every product or service.
A gas guzzler tax, reasonably applied to vehicles that consume excessive fuel is far more appropriate, makes them less attractive and does not penalize everybody.

maybe we should be more concerned with emissions regulated in china and other countries that are polluting the earth more than north america itself...

"maybe we should be more concerned with emissions regualted in china and other countries that are polluting the earth more than north america itself."

To the anonymous person that wrote this: If you really think this way are you trying to hide from the problem and from taking ANY responsibility. It's an argument a 4-year old would make "Why do I have to go to bed at 8, my 16 year old brother doesnt, WAAAAAAAHHHHHH".

Listen, if we, the nation that consumes the most energy in the world and emits 30% of the worlds CO2, don't lead by example, who the hell are we to tell anyone else what to do? I know this is W's way and all, but it wrong. I know it's been 6 years, but you should get that by now. America is a leader, not a follower and we should be setting an example. It's no wonder that our economy is faltering, we aren't being innovative. If we impose a CO2 tax can you imagine how fast that will jump start research into devices that can convert, trap or otherwise render CO2 emissions unharmful? But where is this research? Without imposing severe limits on CO2 emissions directly, we are simply sidestepping the real issue. A CO2 tax is the best idea, and there are many ways to make it progressive enough to not harm those with lower incomes who MUST drive for work and childcare purposes.

And as for the person claiming this isn't 'treehugger.com', you're right, BUT without a planet you, my friend, will have NO cars to drive. Well the cars will probably still be here for a little while after we're all gone, but you won't get to enjoy them. Our atmosphere is NOT for cars, it's for us.

this bill will never fly because it completely relies on the government to decide what cars are 'green' and what cars are not. yes, there may be some formula, that will be analyzed, debated, and eventually compromised. in the end, just like the existing gas-guzzler tax, it will be little more than show-boating, generating no revenue, curbing no buying trends, and doing no good at all.
there should be a tax on gas, that deters usage all around, it also motivates consumers to buy more efficiently, and will generate revenue to (re)stock our oil supplies, invest in green motoring programs, and offset the huge trade gap created by importing millions of gallons of oil.
i also think all the current vehicles that are too large and heavy to be regulated by the EPA should be regulated by the DOT. if you want to drive a truck that's too big to come under regular passenger vehicle regulations, it should not be considered a regular passenger vehicle. everyone who drives one of these should have to get a CDL. i'd bet most of the people currently driving one couldn't or wouldn't get the CDL.

In my opinion, heavy taxes are always a bad idea. They do nothing but choke the economy. A heavy CO2, or fuel tax, would do as other laws have done to California, harm it terribly. Is it not obvious that industry is recognizing the need for cleaner burning and more efficient vehicles?

LM, you are referring to the KYOTO treaty which President Bush thankfully declined to join the US into. How exactly would have entering into the treaty shown that we are leading by example? We would be falling into line with all of the other nations that foolishly did. I don't think that Bush or anyone else thinks that the premise of the treaty is a bad idea, only it's application. The treaty would have choked our ability to compete with other industrial nations, such as China. (who has special Kyoto exemptions)

Finally, since when is our economy faltering LM? Unemployment is very low and the stock market is at historic highs. If what you want is for the Economy to Falter, then these taxes are the perfect tool. Just look at Europe....

Our economy is not strong. We are teetering on the brink of recession, or worse with the pending debt crisis we are in, both individually and as a society. Yes, the unemployment rate is low, but people are worse off now than our parents were. Most Americans are barely making ends meet, unable to save for retirement, spend time with their children, or enjoy life.

The problem with Kyoto is that there are exemptions - there should not be any exemptions. However, where is our leadership on proposing an alternative to Kyoto? For all of the money that we have, or that China has, why are we not spending it to research methods of capturing CO2? Because there are no sticks, or carrots to do so. CO2 is a global problem, but we cannot force others to change, especially without being willing to change ourselves. Regardless of Kyoto or any other treaty, we must lead. Claiming, 'China and India aren't doing it so why should we' is just another cop out. It's time to lead and innovate.

conservatives whine that Democrats are wussies, well complacency and complaining to no end is pretty wussy. Suck it up and let's get rolling. Complacency is why domestic automakers continue to lose money and market share, do we really want our country to follow the failed path of Ford, Chrysler and GM?

gm isnt failing...thanks!

This low-mileage tax does not sound like a bad idea. I personally think some of the money should go towards developing alternate ways of transportation rather then crediting those with higher mileage vehicles. For one thing in Europe they do great with using bikes to get around. Ever see all the bike paths in Germay? The few that we have around here get mobbed, obviously there are plenty of people who will use them. Most people around us cannot go a quarter mile without taking the car! Kids cannot even walk to school anymore!?!

Why stop here? If you are going to tax those with low mileage cars why not tax those with larger homes that consume more resources to heat/cool/light. I laugh at one of the largest houses in our town that has a Prius parked in its driveway. Its better then them driving a Hummer/Land Destroyer/Suburban but with the damage they are doing with their house why bother? Cars are not our biggest source of wasted energy. I know this is not a housing site but I think people forget about some of the other big ways they waste energy and pollute.

Zerf

A lot of these mcMansions are ridiculous I agree but you can't stop people from spending on homes and if they pay the electric/gas bill you can't stop them either. The difference with a gasoline tax would be it impacts every driver. Taxing home energy would be hard to do because the elderly and other low income folks need to heat their homes to live. They may be able to get by without driving but they can't get by without heat and light.

To Serf and Dave T.

Good arguments, however there are methods available to deal with issues you mention.

First, home energy waste is a problem, however there are readily available solutions to this, including better insulation, new windows, etc. Also, energy from wind, solar and nuclear are clean, so house size should not be a big problem in this sense, aside from the fact that the big houses are indicative of our over-comsumer-focused debt-laden society...that's a whole other issue. We just need to quit building coal and gas power plants.

As far as taxing home energy use, Dave, it's the same as a gas tax in it's effect on the poor. Poor people rely on gasoline to get them to work too, and would be impacted if we raise the gas tax. Tax deductions don't work that well because many folks making under 10-15k don't pay any income tax anyway, so offering a deduction is pointless, it just sounds nice. Kind of like the hybrid deduction before the credits were implemented. Lower income folks could not take advantage of the full benefit - how does that ewncourage them to buy more efficient vehicles.

Any economist will tell you that you should charge the most direct method, and a CO2 tax does just that. A gas tax is close, but it is not using gas that is the problem, it is the CO2 emissions that are the problem and we would like to reduce CO2 emissions, so lets tax those. And arguments saying that economists hate taxes are just wrong, as a CO2 tax is one which recoups externalities that your CO2 emissions cause, such as planetary destruction, which is a market failure.

A CO2 tax, on the other hand, would be better because it could be assessed annually, and if someone falls under a certain income level they could be exempt, and taxes raised by others could be used as subsidies toward the purchase of cleaner cars. It would be easy to make the CO2 tax revenue neutral, through taxes and subsidies to ensure that we are seeing a net benefit. We can also use the revenue to encourage research on new technologies and materials to reduce CO2.

I drive a Honda Ridgeline that gets and EPA estimate of 16 in town, 21 Highway. I live 4 miles from work and put about 60 miles per week on the truck (includes a few trips for work). That's around 4 gallons of fuel per week. My co worker lives 30 miles away and drives a Civic that gets 32-36 MPG. He puts about 330 miles per week so, that's around 10 gallons per week consumed. He drives a much more efficient vehicle than I do and burns more than twice as much fuel as I do so, why should I be penalized? Matbe we should be taxed on the amount of miles we drive per year.

Troy, the reason why you SHOULD be penalized is 'coz of the 4 miles your drive, you've decided NOT to use public transportation or fuel efficient vehicle. The distance to commute isn't an option to most people - that part is understandable, as house prices are far greater than vehicle prices. The option that you have selected to "minimize" the negative effect of air pollution/energy conservation, however, is definitely something that we can manage. Your co-worker - due to the fact that he's living far (can't tell if it's because of money issue or sthg else, but I would assume it's some kind of constraint on his part), put his effort into minimizing fuel cosumption and air pollution by driving a efficient vehicle. You, otoh, opted NOT to do so...when you can. You've basically fallen into the same "fault" that LM has been saying: "Why do I have to go to bed at 8, my 16 year old brother doesnt, WAAAAAAAHHHHHH." You could have taken public transportation or drive gas efficient vehicle and achieve possibly 2 Ga of fuel...or even better if it's a hybrid! See...now that's doing your part...
"Don't compare your case with someone worse to make your point - that's just an excuse for saying I'm not the worst loser; compare with someone better than you - that allows you to improve yourself!"

Amuro,

I see your point. I would utilize Pub. Trans but, it's not available in my area. 4 gals a week is a small price to pay.

For those of you crying and whining about CO2:
SHUT UP! Until I see a headline that says one of the island nations is about to go under a rising sea, I will stay with the certainty that this "global warming" is simply an attempt by Europe to make the United States as economically devastated as socialism has made them. Capitalism is the only system capable of solving the problems we face. California's proposal is not about cars;it is about money.

For those of you crying and whining about CO2:
SHUT UP! Until I see a headline that says one of the island nations is about to go under a rising sea, I will stay with the certainty that this "global warming" is simply an attempt by Europe to make the United States as economically devastated as socialism has made them. Capitalism is the only system capable of solving the problems we face. California's proposal is not about cars;it is about money.

For those of you crying and whining about CO2:
SHUT UP! Until I see a headline that says one of the island nations is about to go under a rising sea, I will stay with the certainty that this "global warming" is simply an attempt by Europe to make the United States as economically devastated as socialism has made them. Capitalism is the only system capable of solving the problems we face. California's proposal is not about cars;it is about money.