COVID-19 has disrupted our country in ways that would have been unimaginable just a year ago. Now that we’re coming up on the four-month anniversary of Gov. Roy Cooper’s initial stay-at-home order, most of us have gotten somewhat used to our “new normal.”
Throughout these past few months, I’ve been prouder than ever to be a part of the trucking industry. While most industries shut down or moved inside, we ramped up because we were needed more than ever. Medical equipment, food, cleaning supplies – we got them where they needed to be. We delivered.
We haven’t asked for much in return. The heartfelt thanks we’ve received along the way has meant the world to us. After all, most of us got into trucking to serve. We know how crucial our industry is to our economy. And while we’re hopeful there will soon be a vaccine for COVID-19, our economy’s health needs a different kind of treatment.
Now that Congress and the administration are considering another round of relief, one of the quickest and most effective ways to get the economy moving is a temporary suspension of the Federal Excise Tax, or FET, on trucks and trailers.
An excise tax is a tax on goods or services. The 12% FET that Class 8 trucks and trailers are subjected to was put in place to help pay for World War I, not because it was good policy. It adds an average of $22,000 to the cost of a new piece of equipment. That’s a pretty clear deterrent to upgrading your rig.
Suspending this tax until 2021 will encourage industry leaders to invest in new equipment, which manufacturers will need to produce. And not only is trucking a huge industry in North Carolina, so is auto manufacturing. There are approximately 1.3 million jobs related to Class 8 truck and trailer manufacturing across the nation, including tens of thousands right here in our state. If we want them to be here in the years to come, we need to encourage growth.
Unfortunately, this April, orders for Class 8 trucks declined 72% since the previous April. That’s the lowest in more than two decades. Considering how many North Carolinians depend on the auto manufacturing and trucking industries, it’s not hard to see how big of a problem that is.
Which brings me back to the FET. Temporarily suspending this 12% tax will stimulate both of these industries. In a recent survey by the American Trucking Associations, nearly 60% of respondents said they would likely place orders for new equipment if the FET was suspended.
As if that’s not reason enough, FET suspension will benefit everyone by putting safer, cleaner trucks on our highways.
Fatal large truck crashes in the U.S. dropped 71% between 1975 and 2015, thanks to new safety features.
Before COVID-19, the number of trucks powered by the newest generation of advanced diesel was on the rise. New diesel truck engines produce 98% fewer particulate matter and nitrogen oxide emissions than a similar engine made before 1990. Additionally, sulfur emissions from diesel engines have been reduced by 97% since 1999. That’s a fancy way of saying that the industry has made significant strides in green technology over the past 30 years.
Unfortunately, more than half of the Class 8 trucks currently on the road are over 10 years old. But we can change that. We’re encouraging North Carolina Congressional delegates to call for a temporary suspension of FET so companies can upgrade their equipment.
As the old saying goes, you get less of what you tax. Let’s suspend the FET and get new trucks on the road.