Tax Changes Win Approval of ATA
Bipartisan legislation proposed in the U.S. Congress that would change how truckers pay taxes is drawing praise and support from groups representing truck drivers.
Congressmen Earl Blumenauer, an Oregon Democrat, and Jim Gerlach, a Pennsylvania Republican, have sponsored House bill 4321 which would completely end the federal excise tax imposed on the sale of heavy trucks. In exchange, the federal diesel tax would be raised by 6.3 cents a gallon.
The American Trucking Associations president and chief executive officer, Bill Graves, has called for Congress to pass the act quickly. Graves called the increase in the federal diesel tax modest and said it could easily be borne by truck operators. Significantly, truckers would benefit by saving an average of $15,000 when they buy a new large truck.
The increase to the federal diesel tax could also be a partial solution to the nation's transportation funding woes, Graves said.
Created in 1956 to fund construction of the interstate highway system, the diesel tax has proven inadequate to provide for the Highway Trust Fund in the modern era of fuel-efficient vehicles and mile-cutting drivers who do not want to pay high gas prices. Congress has had to appropriate outside funds to keep the Highway Trust Fund flush in recent years, but it is still likely to go bankrupt in 2013, estimates the Congressional Budget Office.
The tough economy in the aftermath of the Great Recession has further strained the Highway Trust Fund. Graves explained that truck sales have fallen in recent years, and that means the excise tax has generated less revenue for the Highway Trust Fund.
By contrast, he said, the demand for trucking services remains high, so drivers are continuing to buy diesel gasoline. Replacing the excise tax with a higher tax on diesel fuel could provide a more stable and reliable revenue source for transportation infrastructure projects.
Graves suggested that those results could prove politically popular among lawmakers seeking to cut the federal government's budget deficit.
Ending the excise tax on heavy truck sales could also help provide a jolt to the U.S. economy, particularly the troubled manufacturing sector. Lower prices could create greater demand for heavy trucks, helping American-based manufacturers of them.
For example, analysts say the Dayton, Ohio area could benefit from cutting the excise tax. With a central location in the Midwest and easy access to both Interstates 75 and 70, the Dayton area is home to Dayton Freight Lines Inc., Ohio's second biggest trucking company. It employs 300 people in Dayton and 2,500 across the nation.
As well, a subsidiary of YRC Worldwide Inc. named Holland Inc. and ABF Freight have presences in the Dayton area. The biggest subsidiary of Arkansas Best Corp, ABF Freight gives truck driving jobs to 630 people in Huber Heights.
Boosting the motor carrier industry can help other economic sectors, since truck driving jobs are considered a good indicator of the health of the larger economy. Truckers carried 9 billion tons in 2010, representing 67.2 percent of all the domestic freight hauled in the U.S. that year. Truckers earned 81.2 percent of transit revenue, bringing in $563.4 billion.