Definition
The Gas Guzzler Tax is a tax imposed on the sale, use, or lease by the manufacturer or importer of an automobile that does not meet specific fuel economy standards. This tax is designed to incentivize the production and use of more fuel-efficient vehicles. Automobiles that fail to meet these standards and are rated at an unloaded gross weight of 6,000 pounds or less are subject to this tax. The tax applies to vehicles propelled by gasoline or diesel fuel intended predominantly for use on public streets, roads, and highways.
Examples
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Sports Cars: Many high-performance sports cars, such as the Ford Mustang Shelby GT500, are subject to the Gas Guzzler Tax because they typically have lower fuel efficiency.
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Luxury Sedans: High-end luxury sedans like the BMW M760i often fall below the fuel efficiency standards, thus incurring the Gas Guzzler Tax.
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Imported Vehicles: Cars imported from other countries for business or personal use that do not meet U.S. fuel economy standards might also be subject to this tax.
Frequently Asked Questions (FAQs)
Q1: How is the Gas Guzzler Tax calculated?
A1: The tax amount depends on the vehicle’s fuel economy rating. It ranges from a few hundred dollars to several thousand dollars based on the miles per gallon (MPG) the vehicle achieves.
Q2: Who is responsible for paying the Gas Guzzler Tax?
A2: The manufacturer or importer of the vehicle is responsible for paying the tax. However, this cost is often passed onto the consumer through the sale price.
Q3: Are electric vehicles subject to the Gas Guzzler Tax?
A3: No, electric vehicles are not subject to the Gas Guzzler Tax because they are not powered by gasoline or diesel fuel.
Q4: Can a buyer be exempt from paying the Gas Guzzler Tax?
A4: There are no exemptions for buyers because the tax is imposed on the manufacturer or importer. However, the consumer ultimately incurs this cost.
Q5: Are there any vehicles other than cars that fall under the Gas Guzzler Tax?
A5: No, the tax specifically applies to automobiles defined as four-wheeled vehicles intended for use on public roads, with an unloaded gross weight of 6,000 pounds or less.
Related Terms
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Fuel Economy: The measure of how far a vehicle can travel per unit of fuel; usually expressed as miles per gallon (MPG).
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Carbon Tax: A tax on fossil fuels to reduce carbon dioxide emissions and combat global warming.
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Excise Tax: A tax levied on specific goods, such as gasoline or automobiles.
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Greenhouse Gas: Gases that trap heat in the atmosphere, contributing to global warming; includes carbon dioxide and methane.
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Automotive Emissions: The emissions produced by vehicles, including carbon monoxide and nitrogen oxides, which contribute to air pollution.
Online References
Suggested Books for Further Studies
- “Taxation of Environmental Externals” by Alan J. Auerbach and James R. Hines - explores various environmental taxes including fuel economy taxes.
- “Bending the Curve: Policies to Achieve Energy and Climate Goals” by Joseph E. Aldy and Matthew Kotchen - discusses policies related to energy efficiency and environmental taxations.
- “Environmental Tax Courses: Principles and Policies” by Richard L. Revesz et al. - provides an in-depth look at different environmental taxes and their impact.
Fundamentals of Gas Guzzler Tax: Taxation Basics Quiz
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