Some SUVs get fat tax break
– very nice for the auto industry

Jan 6, 2003

In 1996, Clinton and the Congress wrote some new "loopholes" into the tax code, giving purchasers of SUVs and light trucks a huge tax break – if they can be claimed as a business expense. For example, l38 different truck models could get as much as $24,000 in tax breaks this year. For the more expensive SUVs, tax breaks up to $32,000 can be written off as business expenses.

Car dealers of course were quick to point out this advantage to customers who can qualify as a small business or self-employed or a contractor. So the tax break undoubtedly helped certain vehicle sales to soar – the light trucks and the SUVs, which now make up about half of all sales.

These tax breaks were a huge favor to the U.S. auto industry. At the time the tax break was written, Ford, GM and Chrysler made no secret of the enormous profits from these vehicles, amounting to tens of thousands of dollars in profit depending on the model. Effectively, the government subsidized the rapid growth of these high-profit vehicles. These larger vehicles emit twice as much airborne matter as regular cars and put as much as 40 per cent more carbon monoxide into the atmosphere.

In other words, the government, in order to push up auto industry profits, pushed sales of these gas guzzlers in place of autos which are more fuel efficient. And not only did Congress do this with a tax break, it also passed legislation making these vehicles exempt from fuel economy restrictions.

Oh yes, Congress also gave a tax break to new cars that are extremely fuel efficient, getting 50 or more miles per gallon. But it was only $4,000 per vehicle – not even a quarter of the tax break given to the gaz guzzling light trucks.

These vehicles were pushed by a sales campaign pretending to show that they were safer. Of course, it's true that in a head-on collision between a SUV and a smaller vehicles, people in the smaller vehicle will die sooner. But that's not "safety." It's just a way to kill more people.

A recently released study sponsored by the Insurance Institute of Highway Safety finally took on the issue of the real safety difference between larger and smaller vehicles. It turns out that a driver of a Ford Explorer is 60 per cent more likely to die than a driver in a Toyota Camry, a car which is one thousand pounds lighter. Similar results were produced in other comparisons. Among other reasons is the fact that so many people in SUVs die in roll-overs – even when no other car is involved. Since SUV's were brought on the market 20 years ago, there have been at least 12,000 such rollovers that resulted in the death of one or more people.

Gas guzzling, expensive, polluting, dangerous to the point of killing us – why are SUVs and light trucks so popular? As a corporate boss once said, "What's good for General Motors is good for the country." Congress still agrees with him.