A group of trade groups that includes just about everybody in the trucking sector, including individual state trucking associations, has just marked the end of “Suspend the FET Week,” a movement to try to get Washington to suspend the federal excise tax on trucks.
The initiative is not new. For example, the supporting material shared by the National Automobile Dealers Association on Suspend the FET Week included a letter to the top four congressional leaders, first sent in April and updated in June, that spells out the case for eliminating the tax.
The request in the letter, and throughout other documents put out by the coalition, is for a suspension of the 12% excise tax on new truck purchases through 2021. It cites the ongoing collapse of truck sales — which are at a 25-year low — as an opportunity for a stimulus led by suspension of the tax.
“To jump start the economy after the pandemic, a suspension of the burdensome FET, which increases the cost of new heavy-duty trucks and trailers by $22,000 on average, would immediately spark the purchase of heavy-duty trucks and trailers,” the letter says. “In turn, this would help save or bring back the livelihoods of the 7.8 million Americans employed in jobs related to trucking.”
The other argument from proponents of suspending the excise tax is that it would bring environmental benefits.
An issue brief released by the coalition spells out statistics to boost the argument that there are significant gains to be made in restriction of emissions by any program that takes old trucks off the road and replaces them with new ones. The argument boils down to this statistic: You need 60 of today’s trucks to generate the same amount of emissions as a truck manufactured in 1998.
“Diesel engine improvements on trucks manufactured since 2010 have reduced carbon dioxide (CO2) emissions by 43 million tons, nitrogen oxide (NOx) emissions by 21 million tons, and particulate matter (PM) emissions by 1.2 million tons,” according to the brief from the coalition. “Since 2010, new, more efficient diesel trucks have saved 101 million barrels of crude oil and 4.2 billion gallons of diesel fuel.”
In a blog post, Steve Bassett, the chairman of the American Truck Dealers, said costs to meet environmental and safety regulations have added $40,000 to the price of a truck. But he also said more than half of the current trucks on the road are more than 10 years old, so presumably the argument will be that those trucks are not contributing to a cleaner environment as a new truck would.
The reality is that there is no legislation making its way through Congress that would suspend the tax. Juliet Guerra, director of media relations for the National Automobile Dealers Association, said the goal of the coalition is to get an FET suspension in any upcoming legislation that seeks to stimulate the economy in the wake of the pandemic.
With in-person activities out of the question, Bassett said in his blog post that a letter-writing campaign to the coalition members’ representatives in Congress should be undertaken to mark Suspend the FET Week.
The initiative does appear to have pulled in one clear congressional supporter: Democratic Rep. Chris Pappas of New Hampshire.
In a letter to congressional leadership, Pappas talked about the history of the FET. “The FET on heavy-duty trucks, first implemented to help fund World War I, is hitting truck sales hard during this pandemic,” Pappas wrote. “At 12%, this tax has grown to become one of the highest percentage excise taxes and adds approximately $21,000 to a vehicle’s cost.” Pappas’ letter said inclusion of the suspension in “upcoming coronavirus legislation” would be the path to suspending the FET.
The letter from the coalition to the congressional leaders reads like a who’s who of trucking. The American Truck Dealers is the primary leader of the initiative, along with its parent association, the National Automobile Dealers Association. But the list of other signers includes key manufacturers (Cummins, Daimler, Mack, Navistar), associations (American Trucking Associations, Truckload Carriers Association) and several trucking companies (Werner, Old Dominion).
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