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Evaluating Gas Guzzler Tax Impact on Fuel Economy Policy

Explore the Gas Guzzler Tax impact on fuel economy regulation and its significance in influencing vehicle sales and energy consumption. Learn about tax receipts, policy recommendations, and potential changes to promote energy efficiency.

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Evaluating Gas Guzzler Tax Impact on Fuel Economy Policy

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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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