The Tax They Didn't Tell You About

Investor's Business Daily ^ | January 14, 2008

[Zakeet]

Regulation: The new energy law contains stiff new fuel-efficiency standards for U.S. automakers. But make no mistake: What you got from Congress was a big tax hike. Just ask General Motors Vice Chairman Bob Lutz.

That's right. The CAFE standards embedded in the Energy Independence Act require fuel efficiency to jump to a fleet average 35 miles a gallon in 2020 from about 25 mpg now. That means you will soon be paying more — a lot more — to buy a car.

Maybe this sounds reasonable. To many, these new rules are long overdue. They'll help us cut our reliance on foreign oil, they say, while reducing global warming. Who could disagree with such noble goals?

The only problem is, based on what we know now, it'll cost automakers some $85 billion to comply. When all costs are factored in, other estimates put the total cost at about $18 billion a year.

Fine, say the populist politicians. Stick it to the automakers. But do they really think Ford and GM will pick up the tab? Of course not. It'll be you, as GM's Lutz made clear in comments Sunday.

"We've done even more research," Lutz said, "and (the cost per car of new CAFE standards is) going to be in the range of $4,000 to $10,000, with an average of about $6,000."

Let's put that in perspective. The average cost of an automobile in 2006 was $27,958, according to the Comerica Automotive Affordability Index. So our new energy bill is, in effect, going to be a 21.4% tax hike on the current car prices. Oh, didn't they tell you that?

There's more.

[NautiNurse]

I’m going to guess that neither of you live in Florida...where we practice defensive driving tactics against Buicks and Q-tips (white tufts of hair peeping above the steering wheel).

[pnh102]

I’m going to guess that neither of you live in Florida...where we practice defensive driving tactics against Buicks and Q-tips

I've lived in a lot of different places, driven in even more places and dealt with all sorts of drivers. I've been hit quite a few times as well, and in each situation, my small cars have kept me safe.

I cannot control the price of gas. I cannot control the price of oil. I cannot control how many refineries are built or how many are running at a given time. I can, however, control how much gas I use, and I do it by buying small, fuel efficient, non-hybrid vehicles.

[Notary Sojac]

There are a lot of Freepers who seem to think that safety=sheet metal.

Personally, I think that safety=maneuverability+driver alertness+braking+acceleration+vehicle maintenance.

[Notary Sojac]

One more thing. I used to live in Florida. From 1994 through 2002 I commuted on I-95 and SR 112 in one of these.

I never felt particularly endangered at any time.

[NautiNurse]

I'm truly glad you survived your residency in Florida, where a 102 year old man got his license renewed by mail for another six years. Consider yourself fortunate.

Big vehicles are safer for the rest of us when a substantial elder population retains driving privileges above and beyond safety concerns.