WASHINGTON — Major trucking firms and their supporters have called for repealing a long-standing 12% tax on new tractors and trailers as a way to promote cleaner-burning vehicles, but a California lawmaker argues that the tax is also an inefficient way to prop up the Highway Trust Fund (HTF).
Speaking Wednesday at a House Transportation and Infrastructure subcommittee hearing on ways to cure the ailing HTF, Rep. Doug LaMalfa, R-Calif., agreed with groups such as the American Trucking Associations, the Truckload Carriers Association and the National Tank Truck Carriers that the 12% federal excise tax (FET), instituted in 1917, is a disincentive for buying newer and cleaner trucks.
However, “we also see it’s cyclical,” LaMalfa said, “because truck sales more or less move with the economy, with the amount of goods moving in the supply chain. So it’s not a source of funding that’s as steady as would be under other tax forms. So it’s important that when we have a discussion on the continuity of the revenue in the Highway Trust Fund, we also look at a way to relieve the burden on those who buy new trucks.”
LaMalfa encouraged support for a bill he is sponsoring, the Modern, Clean, and Safe Trucks Act, which would repeal the 12% FET “and distribute that [funding] burden over a wider population.”
Of the $1.4 trillion of tax receipts pumped into the Highway Trust Fund since its inception in 1956, about 8% — $114 billion — has been through the 12% FET on new tractors and trailers, according to testimony from Jeff Davis, a senior fellow at the Eno Center for Transportation, who also participated in the hearing.
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Stephen webster
We need to keep the tax on gasoline and diesel power units. The battery portion of the truck as well as cost of natural gas station and storage units and the portion of natural gas trucks for the motor and conversion cost to natural gas or propane should be exempt from the Fed tax. The cost of trailers should be exempt from the tax. The tax on power units should pay for parking improvements to key intersections and tempary housing construction for sick or injured drivers
Jon
As a retired Dispatcher for a trucking company. I understand TAXES!, but the roads belong to all of Us. Amazon Vans and Cargo Trucks fill Our Highways and should be Taxed Annually for the miles they are on Our Roads. Some freeways and ramps are continuously congested, with no concern to the rest of Us…
Daniel
The Democratic party is not even mentioned in the article, and the legislation sponsored Rep LaMalfa is a bi-partisan bill.
Joel Langrehr
I think big government needs to get real and govern with in there means like rest of us have to your going to make it hard on new truck sales which = jobs trucking is backbone of this country
Checkinto
Raising more taxes, as if Trucker didn’t have enough expenses as the load boards continue to drop. Just putting a completely necessary function for the whole country into deeper hardship. Democrats really know how to screw everything up.
Phil Dick
Considering that heavy duty tractor trailers may be contributing to over 50% (some estimates for jurisdictions with intense freeze-thaw cycles may be as high as 80%) of the wear and tear on controlled access roads, asking for the tax to be retired seems like a request for the FET to be reduced begs a study on what the impact of heavy-duty trucks and trailers actually have on highways. This may be poking the bear.
Victor
Considering that the FET was instituted to pay for the debt incurred during WW1 and that debt was officially paid off just a few years ago, it would seem to me that the mandate for the FET expired with the debt. As such, the FET should be retired at this time regardless of the situation with the HTF. Of course, if Congress hadn’t been raiding any of the trust funds for their capital, they wouldn’t be facing insolvency. IOUs don’t gain interest. Capital does. Basic economics but we see how the government lacks that understanding every single day.