Mobilizing the Region
Issue 81May 31, 1996



Weight-Distance Tax...Break


While the nation's top pols rush to rescind the 4.3¢/gallon gas tax surcharge and add $5 billion a year to the deficit, a burgeoning loophole in the federal tax code is also robbing the Treasury of billions while shoving more over-sized gas-guzzlers onto America's crowded roads.

In a May 26 piece, a New York Times automotive columnist heralded the "6,000-pound rule" as a way for business drivers to finance the largest and most expensive sport-utility vehicles. The rule allows self-employed professionals, realtors, sales reps and others to depreciate 6,000 pound or larger vehicles three times as fast as ordinary cars, a benefit equivalent to a $4,000 rebate, according to economist Charles Komanoff, a Tri-State board member. And the giveaway doesn't stop there; the tax code treats vehicles over 6,000 pounds as trucks and therefore exempt from the 10% luxury tax on a cars' price over $32,000.

With other deductions, the potential tax breaks for extra-large vehicles average $6,000, enough to pay off the 4.3¢ gas tax surcharge on two million miles of driving -- say, four trips to the moon, plus a hundred thousand miles of lunar off-road crunching. At this year's sales pace of almost half-a-million over-sized vehicles (25% of total sport utility sales), this Treasury largesse to motorists would reach $3 billion a year if all purchasers qualified for the loophole.

Weight-distance fees charging by vehicle weight and miles traveled are a cornerstone of road pricing proposals. After all, heavy vehicles take up more room, burn more fuel and generally cost society more. Instead, like yesterday's Reddy Kilowatt all-electric quantity discounts, the 6,000-pound rule is the suburbanite's version of market incentives -- road pricing in reverse (pay me as I drive).



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