This section reviews issues related to the differential economic impacts of the various taxes, fees, and charges on particular freight categories, on Beneficial Cargo Owners or industry sectors, or on freight in relation to passenger vehicle user groups. ("Beneficial Cargo Owners" refers to the importer of record, who physically takes possession of a cargo at the destination and does not act as a third party in the movement of such goods.)
Customs Duties and Fees: Customs duties and fees fail to capture domestic-only goods movements and exports. In addition, trade agreements render many imports duty-free, thus the burden of the fees would fall disproportionately on certain goods. While this option would be reasonable for a small dedicated intermodal fund, the large gaps in coverage make it a poor broad-based funding method.
Freight Waybill Tax: By taxing total transportation costs rather than mode-by-mode services, the differential economic impacts among modes or within each mode would be limited. Thus, a freight waybill tax appears reasonably equitable. The tax, however, would be related to transportation costs, not system use. More important, without the implementation of an imputed waybill on captive shippers, the tax would miss as much as half of the goods movement industry. The process of resolving this gap creates significant implementation and administration costs and would be subject to evasion.
Weight Only or Weight-Distance Tax: Weight-based taxes that use the actual weight of the shipment for determining tax levels will place a larger tax burden on low-value/high-weight commodities. Conversely, high-value/low-weight products would pay very little, even though their shipment adds to road use and traffic congestion. If the weight tax is based on the gross vehicle weight rating only and not on actual weight carried, then the short-haul/low-use trucks pay a very disproportionate share of the total tax bill. Weight-distance taxes could potentially cause freight movers to reroute around high tax areas and increase traffic and road use in low tax areas. Similar to the weight tax, a weight-distance tax could alter industry economics, as it would be highest on shipments of low-value bulk items such as natural resources and agricultural products that rely on low- cost transportation to be competitive. Unlike the weight tax, however, this difference would be greater for the longer-distance product movements.
Container Tax: Since a container tax would be imposed generally on shippers, it would not account for non-containerized movements such as bulk shipments of commodities or large pieces of equipment like tractors, generators, or windmill blades. A per-container fee, rather than a value-based tax, disadvantages high- volume/low-value shippers, and if a fee were also imposed on "deadhead" loads (return trips without freight) these effects would be magnified. Also, container fee collection on international movements may require incorporating the freight forwarder into the collection system. While the container tax is a possibility for funding intermodal projects, its limited coverage makes it a weak option for large- scale funding needs. | An infrastructure customs fee also could have the benefit of addressing border infrastructure needs that arise from both homeland security and transportation infrastructure requirements that create chokepoints. |
Illustration of Annual Costs: To illustrate the differential impact these options could have on different types of carriers, the Commission estimated the additional annual costs that would be incurred under the trucking-specific mechanisms for two hypothetical categories of Class 8 Trucks (i.e., standard 80,000-pound maximum load semi tractor trailers) if rates for each option were set at a level to raise $5 billion annually (the amount currently raised by the non-fuel, freight-related taxes contributing to the HTF and also, coincidentally, roughly the amount raised by a 13¢ increase in the diesel tax, which would re-establish the purchasing power of the diesel tax lost since the last increase in 1993). The Commission used the $5 billion funding level for this comparison to demonstrate the magnitude of each tax if it were used to contribute significantly to the current funding gap or, for illustrative purposes only, to replace the four existing non-fuel-related freight
EXHIBIT 5-1: ILLUSTRATIVE COSTS TO TRUCKERS | ||||||
| Impact on Typical Long Haul Truck | Impact on Typical Local Distribution Truck | ||||
Freight Tax Option | Tax Unity/ | Rate to | Annual Cost | %of Revenue | Annual Cost | %of Revenue |
Diesel Tax | 1¢/gal = $404 million | 12¢/gallon | $2,500 | 1.1% | $1,200 | 1.0% |
Tire Tax | 1¢/10 lbs = $45 million | $1.11/10 lbs | $2,088 | 0.9% | $1,044 | 0.8% |
Heavy Vehicle Use Ta | 10% = $103 million | 490% increase | $2,695 | 1.2% | $2,695 | 2.2% |
Freight Way Bill Tax | 1% tax = $5,972 million | 0.84% | $1,890 | 0.8% | $1,050 | 0.8% |
Ton Tax | 1¢/ton = $113 million | 44¢/ton | $619 | 0.3% | $2,475 | 2.0% |
Ton-Mile Tax | 0.1¢/ton-mile = $4,020 million | 0.124¢/ton-mile | $2,616 | 1.2% | $698 | 0.6% |
Source: Data on estimated mileage, revenues, tire usage/costs, and average loads and deadhead mileage for illustrative examples developed through conversations with American Trucking Associations officials and other trucking industry experts.
taxes and charges. To provide a complete analysis, the required increase and associated impact of raising an additional $5 billion from the tire tax and the Heavy Vehicle Use Tax also were assessed. (The impacts of the container tax or customs fees were not included in this analysis since they are not directly imposed on truckers.)
The first example is a long-haul trucker that averages 125,000 miles and generates $225,000 in freight fees (i.e., revenue) annually. The second example is a local delivery trucker (e.g., one that moves goods from a distribution center to individual stores) that averages 50,000 miles per year and generates $125,000 annually. As shown in Exhibit 5-1, only the diesel tax and the freight waybill tax would have an equitable impact with respect to revenue share. These differentials likely would be exacerbated by considering different types of goods and their associated values.