WASHINGTON - October 56 - Some congressional lawmakers are pushing to extend a tax break that will cost almost $2 billion and exacerbate our dependence on oil by encouraging business owners to buy the biggest, thirstiest vehicles available. Tucked into a 631-page bill (H.R. 4520), which is now headed to a House/Senate conference committee, is an obscure, one-sentence provision that would extend to the end of 2007 the existing $100,000 tax break for businesses that purchase SUVs or other passenger trucks over 6,000 pounds. The tax break had been set to expire at the end of 2005.
The tax break has made the purchase of at least 55 large SUV, passenger van and truck models completely deductible for small businesses or self-employed people - only the Hummer H1 would still exceed the $100,000 deduction cap.
This giveaway for the wealthy not only encourages business owners to purchase the most hulking, gas-guzzling SUVs, but it also costs the federal government between $840 million and $987 million annually, making it one of the biggest tax breaks, per capita, in the U.S. tax code. In all, this tax break will cost the government an estimated $1.4 billion for every 100,000 taxpayers who take advantage of the loophole.
This is stunning, especially considering that so many lawmakers and members of the Bush administration profess grave concern over our dependence on foreign oil and the size of the deficit. The giveaway is also contributing to the high fatality rate on our highways, because the heaviest SUVs are also the most dangerous in crashes with other vehicles on the road. Apparently, lawmakers can't reconcile their concern over energy dependence and the deficit with their allegiance to the auto and the energy industries alike.
We urge members of Congress to act responsibly before they go home for the election and remove this costly provision immediately.
*Joan Claybrook was administrator of the National Highway Traffic Safety Administration from 1977-1981.