Reps. Schwartz, Emanuel, Blumenauer, Markey Introduce Plan to Close Hummer Tax Loophole

Press Release

Reps. Schwartz, Emanuel, Blumenauer, Markey Introduce Plan to Close Hummer Tax Loophole

Democratic members of Congress have introduced a plan that would finally close a tax loophole that allows for tens of thousands of dollars in tax write-offs for only the largest luxury SUVs. The bill introduced by Reps. Allyson Schwartz (D-PA), Rahm Emanuel (D-IL) and Earl Blumenauer (D-Ore.), who all serve on the Ways and Means Committee, as well as Rep. Ed Markey (D-MA), Chairman of the Select Committee on Energy Independence and Global Warming, would fix a serious mistake in the tax code that provides an additional tax incentive that supports only the luxury market of SUVs weighing over 6,000 lbs.

"Closing the Hummer tax loophole is both fiscally responsible and environmentally smart," said Rep. Schwartz. "The public wants more fuel efficient vehicles, and by using America's most abundant resource - our innovation - we can build better cars and lessen our nation's dependence on oil."

"This bill fixes a perverse, unintended incentive to buy the biggest and most polluting vehicle on the market," said Congressman Blumenauer. "I am committed to reducing our carbon emissions and slowing the acceleration of global warming. Encouraging businesses to purchase the largest and least efficient cars on the planet - particularly as gas prices continue to climb and the earth continues to warm - is the exact opposite of what we should be doing."

Originally intended to help businesses buy necessary heavy-duty work vehicles, the "Hummer Tax Loophole" has for years allowed write-offs of anywhere from $100,000 to the current figure of $25,000 for the purchase of the largest, most gas-guzzling luxury SUVs, even as concerns over gas prices and dependence on oil have grown. The change would not affect legitimate business investments in trucks or vans, such as plumber and contractor trucks, farm vehicles, construction vehicles, flatbed trucks, cement mixers, and a variety of other vehicles as designated by the IRS.

Since the law's inception in 1984, the increasing size of gas-guzzling SUVs has produced several models that qualify under this law, many of which get some of the worst gas mileage and are the biggest emitters of heat-trapping pollution on the road today.
"Forget about zero-percent financing, this kind of incentive unfairly skews the market away from the more efficient, cleaner cars and SUVs American businesses and families say they want," said Rep. Edward Markey (D-MA), Chairman of the Select Committee on Energy Independence and Global Warming. "Our government is essentially choosing Hummers over hybrids, an absurd choice given our rising dependence on foreign oil."

"Instead of subsidizing a twentieth-century approach to energy, we are working to find new ways to reduce our carbon emissions," said Emanuel. ""Closing this loophole will put an end to the days of incentives for business to purchase gas-guzzlers and will get us a step closer to replacing Hummers with Hybrids."

Over 30 models of SUVs qualify for the loophole, including some of the least fuel-efficient vehicles on the road today. They include the BMW X5 (EPA rated 16 mpg combined), Cadillac Escalade (14 mpg), Jeep Grand Cherokee (12 mpg) and Ford Expedition (15 mpg).

Reps. Schwartz, Blumenauer, Markey and Emanuel have also called for increased fuel economy for all of America's vehicles. A bill authored by Chairman Markey and Rep. Todd Platts, which Reps. Blumenauer, Emanuel and Schwartz co-sponsor, would increase the fuel economy of America's vehicles to 35 miles per gallon by 2018. This bill would not apply to trucks or vans used for legitimate business purposes, such as farm vehicles, fork lifts, cranes and derricks, school buses, flatbed trucks, cement mixers, and other vehicles as designated by the IRS.

Source