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From the “Stuff I’d like to see happen but won’t” files

You may recall that one of the LBB recommendations for helping to close the budget gap was to impose a $100 surcharge on the purchase of fuel-inefficient vehicles. I said at the time that I loved the idea but thought it had zero chance of being adopted. This Star-Telegram story about the surcharge does nothing to change that impression.

State officials are considering a $100 surcharge on the purchase of some new vehicles that don’t meet federal fuel efficiency standards. It’s one legislative proposal designed to raise more revenue and help reduce the looming, multibillion-dollar deficit.

“Despite the increased costs associated with inefficient vehicles, they are exempt from the federal gas-guzzler tax and do not pay any additional sales tax,” a recent Legislative Budget Board report said. “A surcharge attached to the sale of new vehicles with high emissions would compensate for the higher-than-average transportation-related costs these vehicles create.”

Critics say now is not the right time to levy more fees, surcharges or taxes on Texans.

“Some of these vehicles I believe that would get tagged with the surcharge are needed by small businesses for their livelihood — farmers, truckers,” said Talmadge Heflin, director of the Austin-based Texas Public Policy Foundation’s Center for Fiscal Policy. “We should be free to buy the kind of vehicle we need without fear of having to pay an extra surcharge just because of what we choose to buy.”

No bills have been filed to add the surcharge.

It would be nice if someone could explain the concept of an externality to Talmadge Heflin. Be that as it may, the only person quoted in the story favoring the surcharge was Rep. Lon Burnam, and sadly he is unlikely to wield much influence this session. I’m dubious about Rep. Elliott Naishtat’s bill to make online retailers pay sales taxes, but at least there is a bill filed for that. When and if there’s a bill filed for this, we can see if it makes sense to upgrade its chances from zilch to something slightly greater than that.

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2 Comments

  1. Jeb says:

    A bill could be drafted to exempt businesses from the surcharge. Though, that would probably just result in a bunch of doctors having their practice pay for their pick-ups.

  2. matx says:

    I’d back a 1% surcharge on the purchase price of new fuel-inefficient vehicles. Car dealers and manufacturers come up with all kinds of “incentives”–they’d find a way to entice buyers who would balk at paying an additional couple hundred bucks.