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Wednesday, July 30, 2014
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Published: Friday, 12/2/2005

Why penalize hybrids?

A NEW report looking at funding of highway maintenance, commissioned by the United States Chamber of Commerce, makes some salient points, and some of its recommendations deserve consideration. However, it also offers up one very stupid idea: taxing hybrid and fuel-efficient vehicles through a special fee. That's an insult to Americans who are helping to ease, in their own personal way, this nation's dependence on foreign oil.

It's a ridiculous notion, not just because of its underlying logic that cars with better gas mileage pay less in gas tax, and therefore should be taxed in some other fashion, but because it would penalize Americans who make an environmentally prudent purchase.

Many hybrid purchasers understand that gasoline prices would have to climb substantially higher than they are now - and stay there - to offset the higher up-front purchase price. But they buy the vehicles anyway because at 50 miles to the gallon or more, they help the environment. Why should that spirit of good citizenship be punished?

This isn't a make-or-break revenue source for highway spending, of course. Hybrids are only a tiny portion of the auto market. Even so, Toyota reckons 100 million gallons of gas have been saved by its hybrid vehicles in this country since the introduction of the Prius in 1997.

It's the proposal's message that is so unpalatable. Instead of encouraging the purchase of vehicles with good gas mileage, it tells owners there's a price to pay for their environmentally sound choice - and it comes in the form of a tax bill.

That proposal should be parked, permanently, so that attention can be focused on both the background to the chamber's report and its other recommendations.

The report concludes that the federal Highway Trust Fund will see insufficient receipts over the six years of the recently signed highway and public transit act, and its highway portion will have a zero balance by 2008.

As if that were not enough bad news, it also says that revenues from all levels of government will fall $500 billion below what's needed for highway maintenance through 2015 and $1.1 trillion under what's required for improvements.

The chamber is going in the right direction in recommending that the federal gas tax be indexed to inflation. It has been set at 18.4 cents a gallon for the last dozen years, with 15.44 cents of it going to highways, and inflation has eroded receipts.

It's the only major tax not inflation-adjusted, but a House committee recommendation last year for an increase of 4 or 5 cents was shot down by the Bush Administration, so that doesn't bode well for any suggestion of index-linking. Nor do we see much future in a switch to a mileage-based system of charges in place of the fuel tax, also noted in the report.

The funding of highway maintenance and improvements is itself in need of repair. It's disappointing that the chamber should divert attention from its legitimate concerns by the silly idea of taxing hybrids.



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