The coronavirus pandemic has changed the world. In the United States it altered the way our country operates and wreaked havoc on American businesses, but leaders in Washington responded with actions that helped mitigate the damage. I applaud these efforts and am confident that our economy will bounce back. But the work is not done.
Our nation’s economic recovery depends in large part on maintaining a flow of goods provided by trucks. To help ensure this important work gets done, Congress must provide a catalyst to boost production at domestic truck factories and bring customers back to our stores. The fastest and most direct way for Congress to aid this part of the economic recovery — and the trucking industry — would be to suspend the 12% federal excise tax on heavy-duty trucks and trailers. As Congress considers the next phases of virus-related economic recovery legislation, it should include suspension of the FET on new trucks and trailers until the end of 2021.
This proposal could incentivize truck and trailer sales during this difficult and unprecedented economic period, and put newer trucks on the road. While today’s heavy-duty trucks are the safest and cleanest ever, these gains have come with costs; environmental, fuel economy and safety technologies have added $40,000 on average to the cost of a new heavy-duty truck. With more than half of the Class 8 trucks on the road being more than ten years old, relief from the FET could compel carriers to upgrade their fleets to newer, cleaner trucks.
There is broad support across the entire trucking industry for suspension of the FET, including original equipment manufacturers, such as Daimler Trucks North America, Mack Trucks, Navistar Inc., PACCAR Inc and Volvo Trucks North America, suppliers, and purchasers. And in a recent survey of trucking fleets, American Trucking Associations (ATA) found that nearly 60% of respondents would be somewhat or very likely to buy additional trucks and/or trailers beyond their scheduled buy if the FET was eliminated.
On April 28, ATD and 116 other organizations, including ATA and the Motor & Equipment Manufacturers Association, sent a letter to congressional leaders urging suspension of the 12% FET. Other groups, including the National Association of Trailer Manufacturers and the National Retail Federation, have since joined in support. ATD, and the Modernize the Truck Fleet coalition it leads, have dedicated the week of June 15, “Suspend the FET” week to urge suspension of this tax.
The transportation industry supports this move because it would immediately spur the purchase of heavy-duty trucks and trailers, and help support the livelihoods of the 7.8 million Americans in trucking-related jobs.
I urge my fellow dealers and others in the industry to contact their member of Congress this week to convey support for FET suspension and a strong economic recovery. Unlike other stimulus programs, FET suspension does not require more paperwork, learning new compliance rules, or a new bureaucracy. In short, it is a win for the economy, the environment, truck manufacturers, dealers and purchasers.
With our nation more dependent than ever on trucking to deliver goods and critical medical supplies, suspending the FET cannot wait. It is time for Congress to suspend the FET to bolster our trucking sector and help our economic recovery. I implore you to join the fight and take action today to suspend the FET.