As Congress eyes its next COVID-19 package, it should suspend the 12% federal excise tax on heavy-duty trucks.
In 1917, Congress imposed a federal excise tax on heavy trucks to help fund America’s military machine as we entered World War I. More than a century later, the Great War is long over, but that tax still remains on the books—having grown from 3% back then to 12% today. It currently adds some $22,000 to the price of a new tractor-trailer.
Now we’re engaged in a different kind of conflict: the battle against COVID-19 and the invisible coronavirus. And by suspending this antiquated tax, Congress can deliver a powerful boost to our recovering economy as it struggles to climb out of this health-turned-economic crisis. A group of House lawmakers are urging Speaker Pelosi to do just that.
FET was a topic of discussion at a recent Congressional hearing on COVID-19
Trucking has been a pivotal lifeline throughout this pandemic—for the same reason that lawmakers turned to trucks as a convenient source of war revenue a century ago: Trucks are the central link in our supply-chain and the lifeblood of our economy. Not only do they bring all of the basic and essential goods we depend on for daily living, but the industry is also one of the largest employers in the United States: More than 1.3 million jobs across the country are tied just to the manufacturing and sales of Class 8 trucks and trailers, and a total of 7.9 million Americans work in a wide variety of trucking related jobs.
As this vital workforce serves on the frontlines of the COVID crisis, it faces strong headwinds: The pandemic is expected to depress new truck sales by more than 50% this year, putting these key manufacturing jobs in jeopardy and threatening to exacerbate the growing unemployment crisis. But by temporarily lifting the FET on heavy-duty trucks, Congress would put the trucking industry in purchasing mode again. A recent ATA survey shows 60% of fleets would be either somewhat likely or very likely to buy additional trucks and trailers beyond currently scheduled purchases, supporting countless jobs at truck manufacturing plants and dealerships.
Moreover, suspending the FET would benefit the entire motoring public by putting newer, cleaner and safer trucks on the road. This 12% tax is the highest excise tax rate the federal government places on any good in our economy, which disincentivizes carriers from upgrading and modernizing their fleets. As a result, more than half of the Class 8 trucks on the road today are over ten years old.
Help make this happen: Tell Congress to suspend the FET!