WASHINGTON — New research by the American Transportation Research Institute (ATRI) has linked repealing the 12% federal excise tax (FET) on new trucks and truck equipment to a significant reduction in crashes and, as a result, significant cost savings.
In its report released on Wednesday, ATRI, the research arm of the American Trucking Associations, found that the accelerated replacement of old trucks with new ones spurred by repealing the tax would reduce the cost of advanced driver assistance systems (ADAS).
The resulting increase in the number of trucks operating with such equipment on board would prevent 750 crashes per year and save nearly $13.5 billion in crash costs over 10 years, ATRI estimated.
Decrease in CO2 from Truck FET Repeal Across Ten Years
“Truck prices clearly impact annual sales for our dealers, and reduce our customers’ ability to add new equipment to their fleet,” commented Jacqueline Gelb, president of the American Truck Dealers, in an ATRI press release.
“This report greatly reinforces one of the key justifications for repealing the FET on new trucks by quantifying the real-world benefits a repeal will have on the environment and highway safety.”
Eliminating the truck FET has been an ongoing priority for ATA, and the association has been pushing lawmakers to enact legislation supporting it. Bipartisan legislation was reintroduced in March to repeal it.
The tax, which has been in place since 1917 to help raise revenue during World War I, applies to the first retail sale of a new truck or trailer. Depending on the truck and trailer type, the tax can add over $40,000 to the price of a new tractor-trailer.
“Such a cost will ultimately influence purchase decisions, and some potential new truck buyers will choose alternatives,” the ATRI report states, including buying used trucks or operating existing trucks longer before replacing them.
“It is generally understood that newer trucks have more fuel-efficient engines, lower repair and maintenance costs, and are more likely to have the latest advanced safety systems. New trucks also do not have the performance-degrading ‘wear and tear’ that will inevitably occur after several hundred thousand miles of driving.”
ATRI estimated that increased demand for newer, cleaner trucks that would result from repealing the FET would decrease carbon emissions at an accelerated rate, with annual reductions of 1.2 million metric tons of carbon dioxide over current truck purchases.
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