In 1907, two Seattle youngsters with $100 and a dream based the corporate that got here to be referred to as UPS. On the time, trucking was such a novelty that UPS — an organization that’s right now acknowledged by its omnipresent brown vans — made deliveries by foot, streetcar and one bicycle.
When the USA entered World Struggle I a couple of years later, Congress imposed an excise tax on the brand-new trucking trade to assist fund the conflict effort. Lots has modified in a century, with vans now occupying a central position in our lifestyle. Thus, what started as a modest tax with an outlined objective has ballooned right into a $5 billion annual burden shouldered by truckers, due to the 12% cost levied on new heavy-duty vans and trailers.
This zombie tax coverage acts as a drag on financial progress, a roadblock to the provision chain and an obstacle to truck manufacturing. These ramifications lengthen to our state, which is dwelling to just about 175,000 jobs within the trucking trade. Many of those jobs are tied to manufacturing provided that PACCAR in Bellevue and Kenworth in Kirkland are headquartered right here.
With the help of U.S. Sens. Patty Murray and Maria Cantwell, we will absolutely unleash the potential of Washington manufacturing by eradicating the 12% cost on new heavy-duty vans and trailers, which is at the moment the best excise tax levied on any product. This may tack on almost $25,000 to the acquisition worth of a brand new clean-diesel truck and as much as $50,000 to a zero-emission truck.
The fee provides up rapidly. For instance, contemplate the drayage fleet of 4,000 vans serving the Port of Seattle. This sector has been underneath huge stress by regulators to be the primary to completely electrify. Changing this fleet alone with new battery-electric vans might carry a price ticket of $1.6 billion. And the tax invoice on this princely sum? A whopping $192 million — sufficient to buy a further 480 battery-electric vans!
Though customers don’t see this tax on the backside of their receipts, they pay for it via larger costs once they store. The burden falls particularly closely on unbiased truckers, mom-and-pop operations and different small fleets that make up 96% of the trucking trade.
This tax is likely one of the major causes that roughly half of the vans on our roads right now are older than 15 years. If these truck house owners have been incentivized to commerce of their previous vans for brand new ones, it might not solely catalyze truck gross sales and spur the creation of producing jobs, however it might have substantial security and environmental advantages as effectively.
Vans which can be manufactured right now include an array of cutting-edge capabilities equivalent to stability management and blind-spot monitoring, designed to stop crashes and save lives. The Insurance coverage Institute for Freeway Security has concluded that computerized emergency braking and entrance collision warning on vans might remove greater than two out of each 5 rear-end crashes.
New truck fashions have the added benefit of being gentler on the setting. Resulting from advances in truck engine manufacturing, emissions have declined sharply and steadily over the previous a number of a long time. In consequence, 60 vans right now emit the identical as only one truck did in 1988. A newly manufactured truck produces half the CO2 emissions of a 2010 mannequin.
In right now’s polarized setting, it’s uncommon to search out public insurance policies that may be unifying. However repealing the federal excise tax on heavy-duty vans and trailers could be a serious win for the environment, freeway security and good-paying manufacturing jobs right here at dwelling. I strongly encourage Sens. Murray and Cantwell to affix a rising bipartisan coalition of lawmakers who’ve co-sponsored the Modern, Clean and Safe Trucks Act of 2023.
Let’s do away with this antiquated and counterproductive tax as soon as and for all and assist allow extra Washingtonians to construct the most recent fashions of high-tech, energy-efficient vans that hold our nation transferring ahead.