Slight of Hand: EPA Fails To Adjust Gas Guzzler Tax Benchmarks To Match New MPG Numbers

Post by Kasey Kagawa

In a stunning blow for common sense, the EPA changed the way they test the fuel economy of all cars a few months ago, accounting for such wild and reckless behavior as driving at 80 MPH, running the air conditioning in 95ºF temperatures, and driving in 20ºF weather, all of which use more fuel than the standard tests. These changes won’t show up on cars until the 2008 model year, but at least it’s done, and we the consumers didn’t get screwed in the process.

Well, not entirely. As we lounged at 35,000 feet in the Dubspeed private jet, sipping the finest cognac in our silk smoking jackets and enjoying the services of the many fine dancing girls under our employ, Zerin mentioned the gas guzzler tax to me. It seemed to him that a decrease in MPG ratings across the board, especially if it reflects a more realistic rating, should lead to a corresponding decrease in the numbers on the tax schedule for the gas guzzler tax, yet this had not happened.

After our return to the ground, I navigated to the EPA’s website on the gas guzzler tax, and it turns out that he was right. The tax is assessed by multiplying the highway MPG by 45% and the city MPG by 55%, and then adding those numbers together and comparing the total to the tax schedule, which is published on the gas guzzler website. This tax is charged to the manufacturer, but it often is passed down to the consumer. The current tax schedule that is in place has been used since 1991, and there is nothing on the website indicating that it is under review as a result of the changes in the EPA gas mileage ratings, which means that more than a few cars are in danger of being bumped up to a higher tax bracket, even though their real MPG ratings haven’t changed one bit, just the way the government measures them. For example, the Chevrolet Corvette Z06 rings in with a 21.5 combined MPG, which is good for a $1300 charge, but with the new combined MPG of 19.95, it jumps up two brackets to cost $2100 per car. A manual Nissan 350Z scores 23.15 MPG and avoids the gas guzzler under the old ratings but with a 21.15 MPG on the new ratings, it also comes up two brackets with the IRS charging Nissan $1300 for every 350Z sold in the US, an amount that will undoubtedly be passed down to the consumer.

This is bad enough, but there’s an exemption in the gas guzzler tax. Guess what it’s for? That’s right, our old friends the truck, sport utility vehicle, and the minivan. All of these vehicles are exempt from the gas guzzler tax, which means that while those of us who drive reasonable transportation instead of 18-foot-long monstrosities with one person in them get screwed by Uncle Sam, the thundering idiot who thinks that a truck that you need a stepladder to get into is the pinnacle of the automotive industry can keep on buying vehicles that struggle to get their fuel economy into double-digits. If you’re looking into buying a four-banger, you should be pretty safe, but if your dream car has six cylinders or more, I’d buy it now, as it’s about to get a lot more expensive.

EPA Fuel Economy [US EPA]

Edit: Before you Corvette zealots jump all over me about the fact that the consumer doesn’t get charged gas guzzler for the Z06, remember that it’s the manufacturer that takes the hit. It’s up to them to pass it on down to you, and in this case, they obviously chose to eat the costs for PR purposes. If you don’t believe me, do the math.

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Kasey Kagawa

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