Axle weight-distance proposal gives new twists to old fight
Weight-distance tax: Three little words guaranteed to inspire fear and loathing in the hearts of truckers. The industry has waged its own version of the Thirty Years' War against the tax, and the list of weight-distance tax states has steadily shrunk; this year the industry has been putting up a good fight in two of the toughest holdouts, New York and Oregon. It would be ironic if the industry won all these battles but lost the war. Yet that has become a real possibility now that Sen. John Chafee (R-R.I.) has introduced S. 1056, a bill that for the first time would impose a federal weight-distance tax.
At first, Chafee might seem to be hopelessly outmanned. He introduced the bill without co-sponsors in the Senate and without a counterpart bill in the House of Representatives, where all tax legislation is supposed to start.
But Chafee can't be dismissed. As chairman of the Environment and Public Works Committee, he has a lot of leverage to demand, or trade for, the votes of other senators interested in road, water, and other big projects in their home states. He also has leverage as the second-ranking Republican on the Senate Finance Committee.
Trucking executives may be surprised to find S. 1056 has several positive features compared to state weight-distance taxes. First, Chafee couples this tax with repeal of all existing federal truck taxes: the 12% excise tax on new equipment, the tire tax, the heavy vehicle use tax, and the "diesel differential." That is, he would trim 6 cents from the federal diesel fuel tax so that it matches the gasoline tax rate of 18.3 cents for the Highway Trust Fund (plus 0.1 cents for the Leaking Underground Storage Tank Trust Fund).
Second, Chafee's tax would vary by axle, unlike current weight-distance taxes. Thus, an 80,000-lb. combination with six axles would pay far less than one with five axles. In addition, because he would repeal the 12% excise tax and tire tax, an extra axle would cost less than it does now.
These features of Chafee's package would produce some winners. Anyone who replaces equipment frequently or buys very expensive gear would benefit greatly from repeal of the 12% tax. Those who register their rigs at low GVWs might also come out ahead thanks to fuel and tire tax savings. In fact, Chafee says the bill would be revenue-neutral, implying that a lot of fleets would save on these taxes, while others would pay more - particularly those who put a lot of weight and mileage on relatively few axles.
But even the ostensible winners have their doubts. Some fear that Congress won't stick with the bargain. Raising the fuel tax rate - or reimposing one of the repealed taxes - sounds too easy. Others worry that enforcement will fall more heavily on them than their competitors, as has been true in many weight-distance states.
And there are fleets that run light half the time or more but must register at the heaviest weight they ever carry. Under current law, those fleets use less fuel and pay less fuel tax at the lighter weights. But Chafee's bill would charge them weight-distance tax at their heaviest declared weight for state registration purposes, even if they never ran a mile actually loaded that heavily.
The bottom line: Chafee and carrier executives may both have made some miscalculations. If Chafee thought his proposal would split the trucking industry by creating many "winners," he misjudged how deeply the industry mistrusts both politicians and weight-distance taxes, no matter how appealing they are made to look. But if truckers think this is an idle intellectual exercise by a retiring senator, they may have underestimated Chafee's determination and leverage.
