June 9, 2006 - Introduction of a Measure to Eliminate Special Tax Incentivs to Buy Gas Guzzling SUVs

WASHINGTON, D.C. – Today Representative Edward J. Markey (D-MA), a senior member of the House Energy and Commerce Committee, introduced legislation to Congress that corrects wasteful tax incentives for inefficient automobiles. By eliminating the SUV loophole in the Gas Guzzler Tax, the “No Special Tax Subsidies for Gas Guzzlers Act” restores incentives that are consistent with reducing gasoline costs to consumers, American reliance on foreign oil, greenhouse gas emissions, and unhealthy polluted air.  Markey was joined by over a dozen Democratic colleagues who have co-sponsored the measure.

“With our budget deficit running at near record levels, it is absurd that we would provide incentives to purchase gas guzzling passenger vehicles.  With thousands of troops in the Middle East, this tax loophole undermines our ability to break the national addiction to imported oil,” Rep. Markey stated.

A Congressional Research Service review of the Tax Preferences for Sport Utility Vehicles reported that no question exists that the current tax code favors the purchase of heavy SUVs over lighter passenger cars, due to current tax depreciation rules that allow business purchases to expense up to $25,000 in the first year.  In addition, by buying the heavier gas guzzling SUV, a consumer can avoid gas guzzler taxes, because old, out-dated definitions in the tax code exempt SUVs and other very inefficient passenger vehicles.  The predictable result is that consumers are induced by the tax code to buy less efficient vehicles.

As much as $10 billion in taxes is lost annually because of these archaic obsolete definitions and incentives, according to one estimate.

The legislation would eliminate loopholes in the gas guzzler tax, thereby ensuring that consumers have a strong incentive to buy a more efficient vehicle. The higher cost of more efficient technologies would be more than offset by avoiding the tax, as well as by the savings in gasoline costs that would also be realized.

Rep. Markey concluded, “Eliminating these tax incentives by 2025 could result in a saving of over 1.5 million barrels of oil per day, save consumers $33 billion annually and result in a significant reduction in our emissions.”

Cosponsors as of June 9, 2006:

Rep. Anna Eshoo
Rep. Raul Grijalva  
Rep. Barbara Lee
Rep. Pete Stark
Rep. James Oberstar
Rep. Lois Capps
Rep. Jim McGovern
Rep. Betty McCollum
Rep. Bill Delahunt
Rep. Bernie Sanders
Rep. Jay Inslee
Rep. John Olver
Rep. Jim Moran
Rep. Sam Farr

FOR IMMEDIATE RELEASE
June 9, 2006

CONTACT: Israel Klein
202.225.2836