The released text of the surface transportation reauthorization bill would create a new national car tax that would increase the cost of vehicle ownership for American families and turn state DMVs into IRS-like tax collectors for the federal government.
The House Transportation and Infrastructure Committee’s Highway bill would impose a $150 annual tax on electric vehicles (EVs) and a $50 annual tax on plug-in hybrids.
The proposed car tax is estimated to raise taxes on American drivers by $30 billion.
Grover Norquist, President of Americans for Tax Reform, appeared on Newsmax Tuesday afternoon and blasted the new car tax:
NORQUIST: “As soon as the Democrats get into power, they’ll say, ‘oh my goodness, there’s the gas car loophole. We must have the car tax on all cars.’ And then it won’t just be the EVs, it’ll be everybody. It won’t take them two weeks to do it.”
Turns Your DMV into a Branch of the IRS
The legislation would require state motor vehicle departments to become revenue collectors for the federal government, holding them responsible for collecting the new car tax.
‘(1) COLLECTION OF FEE.—A State motor vehicle department, or an equivalent to such department, shall—
‘‘(A) incorporate the collection of the fees established under subsection (a) into the vehicle registration and renewal processes administered by such department, so long as such fees are imposed for each year in which the fees are required;
If a state doesn’t want its DMV to become tax collectors, the legislation would have them punished by instructing the Administrator of the Federal Highway Administration to withhold 125% of funding otherwise due to states.
Conservative Lawmakers Rightly Blew Up the Car Tax Last Year
A similar proposal from the Transportation and Infrastructure Committee was pushed during reconciliation last year that would’ve implemented a $20 levy on all standard gas passenger vehicles, alongside a $200 fee for electric vehicles and $100 for hybrids. That tax increase was lambasted by conservative lawmakers including Rep. Chip Roy (R-Texas) who questioned the sanity of Republican proponents of the car tax:
“Are you out of your fricking mind? Like, the party of limited government is gonna go out and, ‘say we’re gonna have [a car tax]? You know what I was told? ‘Don’t worry about it. We’ll get rid of it later in the highway bill.”
House Conservatives even sent a letter to the Senate GOP during reconciliation urging them to strip out the car tax in section of the letter titled “No New Car Tax.” The Senate agreed and removed any car tax from the final reconciliation bill.
Details on Car Tax
Under this proposal, beginning October 1, electric vehicle owners would be forced to pay a new annual federal registration fee amounting to $130, while those with plug-in hybrids would pay an additional $35 annually. As if that weren’t enough, the fees automatically increase every two years until they hit $150 and $50 respectively.
This is a blatant attempt to cash grab. American drivers are not an ATM that Congress can use when they run out of money.
Americans for Tax Reform opposes this $30 billion tax hike and urges Congress to reject this unnecessary and harmful tax increase on American drivers.
