While automobile manufacturers must pay a tax on cars
getting less than 22.5 miles per gallon, Sports Utility Vehicles (SUVs)
are exempt from this. Traditionally, the lower the fuel efficiency of the
car, the higher the taxes paid by the automaker. Due to a gas-guzzler tax
that was enacted into law in 1978, SUVs and light trucks that get less than
22.5 miles per gallon are exempt from the standard. This law classified
"light trucks" as vehicles used to move hay or gravel and was
meant to help the farmer. At the time, SUVs comprised only 20% of the market,
compared to the current saturation of 50%.
If SUVs and light trucks were not exempt, manufacturers would pay more
than $10 billion a year in taxes, according to Friends of the Earth. The
tax exemption allows Ford, General Motors, DaimlerChrysler and others to
garner higher profits at taxpayer expense.