An ongoing tug-of-war continues between the Supreme Court and the Environmental Protection Agency (EPA) over the agency’s jurisdiction to issue sweeping mandates on industry to curb greenhouse gases. Indeed, regulatory overreach on environmental policies by state and federal government agencies is not the right policy path to net-zero emissions. We need common-sense solutions to help us get there. Market incentives, as opposed to top-down mandates, will be far more effective in reducing emissions and stimulating the economy.
One perfect example of this is addressing the major barrier that stands squarely between the trucking industry and the next generation of clean, energy-efficient trucks. The federal excise tax (FET) is an antiquated, World War I era burden that adds a whopping 12% on the purchase of all heavy-duty trucks in America. It is the largest excise tax on any product in our economy today, and it is long past time to retire it.
On average, the FET adds nearly $25,000 to the price of the latest clean-diesel equipment, which is already cost-prohibitive to most small-fleet owners looking to upgrade older tractors. For battery-electric models, the cost skyrockets by nearly $50,000. This is a deal breaker for the overwhelming majority of U.S. motor carriers, 90% of which are small businesses that operate six or fewer trucks.
It is classic Washington to expect the trucking industry to modernize its fleet only to turn around and slap them with an excessive tax. That’s why members of Congress from both sides are talking action. The Modern Clean and Safe Trucks Act of 2023 was introduced in both the House and Senate by a bipartisan coalition of congressmen and senators, led by Reps. Doug LaMalfa, Chris Pappas, Earl Blumenauer and Darin LaHood in the House and Sens. Ben Cardin and Todd Young in the Senate. As a high-ranking member of the Senate Finance Committee, Senator John Cornyn’s voice on repeal of the FET would carry significant weight.
Repeal of the FET would impact all Texans who rely on delivered food and goods in their daily lives. Currently, nearly half of Class 8 trucks operating nationwide are model year 2010 or older and send far more emissions into the air than today’s advanced clean vehicles. If those pre-2010 trucks were replaced with more modern trucks, emissions would decrease by 83 percent overnight.
Repealing the FET would also improve highway safety by putting cutting edge truck technology on the road much more quickly. This includes the latest safety features like automatic braking, stability control, lane departure warning, blind spot monitoring, rearview cameras, fatigue alert systems, and many other capabilities that have come online and significantly improved in recent years.
There are also major economic wins that would come from repealing the FET. Not only would it lower the cost of freight transportation, but it would provide a major shot in the arm to heavy duty vehicle manufacturers right here in Texas.
Senator Cornyn has wisely noted: “We don’t need top-down mandates to reduce emissions – we need bottom-up solutions.”
We couldn’t agree more – and the Modern Clean and Safe Trucks Act is a great place to start.
John D. Esparza is President and CEO of the Texas Trucking Association