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The Gas Guzzler Tax

The Gas Guzzler Tax. Stacey Louie CHE 379 Dr. T.F. Edgar The University of Texas at Austin Dept. of Chemical Engineering. (http://www.ucar.edu/communications/staffnotes/9712/CartoonCar.GIF). Background. Provision of Energy Tax Act of 1978 Has not changed since 1991

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The Gas Guzzler Tax

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  1. The Gas Guzzler Tax Stacey Louie CHE 379 Dr. T.F. Edgar The University of Texas at Austin Dept. of Chemical Engineering (http://www.ucar.edu/communications/staffnotes/9712/CartoonCar.GIF)

  2. Background • Provision of Energy Tax Act of 1978 • Has not changed since 1991 • Manufacturer tax for low fuel economy vehicles (below 22.5 mpg) • Tax disclosed on fuel economy label on new cars • Only applies to passenger cars (does not include SUVs, trucks, minivans, or cars >6000 lb GVWR)

  3. Gas Guzzler Taxes • Tax receipts in 2005: $170.3 million

  4. Vehicle Sales andFuel Economy • Total vehicle sales in 2006 = 16.7 million • SUVs and Pickups • 4.5 million SUVs • 2.4 million pickups • 44% of total sales • Avg. fuel economy • SUVs: 21 mpg • Pickups: 19.5 mpg (http://cta.ornl.gov/data/tedb26/Edition26_Chapter04.pdf)

  5. Policy Recommendations • Change fuel economy categories • Avg. passenger car in 2007 = 31.0 mpg • Increase upper mpg bracket to at least 30 mpg for cars • Increase taxes for lower mpg vehicles • Update categories over time • Include large vehicles • Much lower fuel economy than cars • $1300(4.5 mil SUVs) + $1700(2.4 mil pickups) = $9.93 billion = 58 times 2005 Gas Guzzler tax receipts • Apply to energy R&D budget (only $1.6 billion in 2007)

  6. References • EPA. (2007, October 11). Gas guzzler tax and vehicles. Retrieved December 5, 2007, from http://www.epa.gov/fueleconomy/guzzler/index.htm • National Highway Traffic Safety Administration. (2007, March). Summary of fuel economy performance: March 2007 (Rep. No. 480389). Retrieved November 7, 2007, from http://dmses.dot.gov/docimages/pdf102/480389_web.pdf • National Science Foundation. (2007, August). Federal R&D funding by budget function: Fiscal years 2006-2008 (Rep. No. NSF 07-332). Retrieved December 5, 2007, from http://www.nsf.gov/statistics/nsf07332/ • Oak Ridge National Laboratory. (2007). Transportation energy data book: Chapter4 Light vehicles and characteristics (Rep. No. ORNL-6978). Retrieved November 6, 2007, from http://cta.ornl.gov/data/chapter4.shtml

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