State vehicle registration where I’m at is based on vehicle weight.
Costs about $400 to renew the registration on my daily driver and $600 to renew for a larger truck.
Motorcycles are only like $80 to renew.
Consumers are being taxed more for larger vehicles, it’s the manufacturers trying to avoid safety regulations that are seeing the cost benefits.
For now, the important point is that trucks generally are more profitable than cars thanks to two big government incentives, both of them historical footnotes.
The first is the so-called chicken tax, a 25 percent tariff imposed by Lyndon B. Johnson in 1964 on foreign-built work vehicles as part of a chicken-related trade war with Europe. If you’re making a pickup or cargo van in the United States, profits should be higher, because foreign factories can’t come close to undercutting you on price.
The second incentive lies in the fine print of Corporate Average Fuel Economy (CAFE) standards adopted in 1975, Gerald Ford’s reluctant response to a crippling Middle East oil embargo that sent gas prices soaring. To protect American commerce, work trucks and light trucks were subject to less-strict CAFE standards than family sedans. Trucks are also exempt from the 1978 gas guzzler tax, which adds $1,000 to $7,700 to the price of sedans that get 22.5 or fewer miles to the gallon.
That’s because the USA subsidizes bigger trucks as “work vehicles”.
Can you cite this? Don’t get me wrong, I understand that if it’s actually a work vehicle you probably get some tax credits/breaks, but I highly doubt many consumers are getting these breaks for buying large vehicles.
I watched most of the video, it’s primarily about safety. It’s says the growth is mainly due to the regulations not applying the same to light trucks, which SUVs are classified as. This seems to contradict the claim that I was asking about.
If there is something about the state subsidizing the vehicles and I missed it, I would appreciate a time stamp. Noone needs to convince me that suvs are unsafe and an environmental disaster.
In the US it is called the 179 deduction. For trucks over 6, 000 lb gross vehicle weight you can deduct the total price for the year the truck is put in service.
In Australia it breaks down thusly. (for reference average wage is about $80k per annum).
If you buy a vehicle for $50k, you’re entitled to claim a tax deduction for that cost, usually spread over a number of years.
However, if you buy a vehicle for $100k, you’re only entitled to claim a tax deduction for the first ~$56k (changes each year), unless the vehicle has a large enough carrying capacity that it can be considered to have been designed for the purpose of carrying stuff rather than people.
This rule is designed to disallow deductions for wanky vehicles. Like why should someone be allowed a deduction for driving a wanky mercedes SLK when a cheap and chearful toyota camry can perform the same task of moving a taxpayer from point A to point B. Of course, if someone buys a $300k prime mover (tractor?) designed for hauling 90 tonnes of wheat from a farm to a port, it’s just not possible to do that with a toyota camry so you should be entitled to claim the entire cost.
Suppose you have 2 vehicles, both costing $100k, one is a regular sized Toyota truck, and the other is a ridiculous RAM truck or something. Suppose you plan to sell whichever you buy, after 8 years or so, when it’s value is $50k.
On the Toyota you can only claim a tax deduction on the $6k difference between the $56k notional purchase price and the $50k sale price, which if your tax rate is about a third then you save yourself $2k in tax, so the vehicle cost you $48k to own for 8 years.
On the RAM you can claim a tax deduction on the entire $50k difference between the $100k purchase price and the $50k sale price. A third of that is ~$16k, so it only cost you $34k to own that vehicle for 8 years.
I’m guessing you don’t actually pay attention to the tax law, then. Annual vehicle registration (aka, a vehicle ownership tax) is more expensive as the weight on the vehicle goes up. Vehicles over a certain weight limit require more complex and strict drivers license classes (granted, class B starts at 26,001 lbs which is way higher than even today’s heaviest consumer cars), and any vehicle used for work has higher insurance and regulatory costs, regardless of the size.
Buying an F350 (a truck that really only has a place in very specific situations anyway) requires so much extra work and almost always requires a class B license because of the kind of work being done with it. People who choose to get something like that because of small-dick syndrome are idiots. And that’s coming from a person who used to drive 18-wheelers and still has a compact SUV as my daily driver.
That’s because the USA subsidizes bigger trucks as “work vehicles”. This practice needs to stop and they need to be taxed more than smaller vehicles.
State vehicle registration where I’m at is based on vehicle weight. Costs about $400 to renew the registration on my daily driver and $600 to renew for a larger truck. Motorcycles are only like $80 to renew.
Consumers are being taxed more for larger vehicles, it’s the manufacturers trying to avoid safety regulations that are seeing the cost benefits.
This article summarizes the subsidies I’m talking about. Here’s an excerpt:
Can you cite this? Don’t get me wrong, I understand that if it’s actually a work vehicle you probably get some tax credits/breaks, but I highly doubt many consumers are getting these breaks for buying large vehicles.
https://youtu.be/jN7mSXMruEo?feature=shared
Not op, but I really liked this video, as it explains quite a bit. It is of course a biased video, but still…
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I watched most of the video, it’s primarily about safety. It’s says the growth is mainly due to the regulations not applying the same to light trucks, which SUVs are classified as. This seems to contradict the claim that I was asking about.
If there is something about the state subsidizing the vehicles and I missed it, I would appreciate a time stamp. Noone needs to convince me that suvs are unsafe and an environmental disaster.
In the US it is called the 179 deduction. For trucks over 6, 000 lb gross vehicle weight you can deduct the total price for the year the truck is put in service.
Thanks for the citation, I’ll look into it.
In Australia it breaks down thusly. (for reference average wage is about $80k per annum).
If you buy a vehicle for $50k, you’re entitled to claim a tax deduction for that cost, usually spread over a number of years.
However, if you buy a vehicle for $100k, you’re only entitled to claim a tax deduction for the first ~$56k (changes each year), unless the vehicle has a large enough carrying capacity that it can be considered to have been designed for the purpose of carrying stuff rather than people.
This rule is designed to disallow deductions for wanky vehicles. Like why should someone be allowed a deduction for driving a wanky mercedes SLK when a cheap and chearful toyota camry can perform the same task of moving a taxpayer from point A to point B. Of course, if someone buys a $300k prime mover (tractor?) designed for hauling 90 tonnes of wheat from a farm to a port, it’s just not possible to do that with a toyota camry so you should be entitled to claim the entire cost.
Suppose you have 2 vehicles, both costing $100k, one is a regular sized Toyota truck, and the other is a ridiculous RAM truck or something. Suppose you plan to sell whichever you buy, after 8 years or so, when it’s value is $50k.
On the Toyota you can only claim a tax deduction on the $6k difference between the $56k notional purchase price and the $50k sale price, which if your tax rate is about a third then you save yourself $2k in tax, so the vehicle cost you $48k to own for 8 years.
On the RAM you can claim a tax deduction on the entire $50k difference between the $100k purchase price and the $50k sale price. A third of that is ~$16k, so it only cost you $34k to own that vehicle for 8 years.
See my post above with citation.
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I’m guessing you don’t actually pay attention to the tax law, then. Annual vehicle registration (aka, a vehicle ownership tax) is more expensive as the weight on the vehicle goes up. Vehicles over a certain weight limit require more complex and strict drivers license classes (granted, class B starts at 26,001 lbs which is way higher than even today’s heaviest consumer cars), and any vehicle used for work has higher insurance and regulatory costs, regardless of the size.
Buying an F350 (a truck that really only has a place in very specific situations anyway) requires so much extra work and almost always requires a class B license because of the kind of work being done with it. People who choose to get something like that because of small-dick syndrome are idiots. And that’s coming from a person who used to drive 18-wheelers and still has a compact SUV as my daily driver.
See my post above in the thread where I show the laws I am talking about and cite source.