Washington State’s Money Grab – Oops, Fuel Economy Tax

By Chris Haak


The Seattle Post-Intelligencer reported today on a proposal in the Washington state senate to impose an excise tax on all passenger vehicles based on EPA fuel efficiency ratings. Senate Bill 6923 has the support of both Seattle Mayor Greg Nickels and Sen. Ed Murray (D-Seattle). Examples of the fees range from a Toyota Prius being assessed $60 annually and a Hummer H3 being assessed $180 annually.

Supporters of the bill claim that “the biggest global warming problem in this state is actually from transportation.”

However, the next paragraph is telling when one is searching for the true motivation behind this bill. It turns out that “rising fuel costs have lured drivers from their cars while the increased popularity of gas-efficient vehicles has cut back on the number of trips drivers make to the pumps.”

Thankfully, I do not live in Washington, so this will not affect me directly, but I do have a problem with this proposal on several levels. Foremost, it’s so obviously a money grab and not out of concern for the environment. The problem, as outlined in the previous paragraph, is that motorists in Washington are using too little fuel, causing gas tax receipts to fall. So basically, high gas prices are doing their job of discouraging consumption and encouraging more fuel efficient vehicle sales. The only problem is, that positive trend cuts into the state’s revenue stream. But make no mistake, there already is a tax based on fuel economy in Washington and most other places – it’s called a gas tax. Use more, and you pay more tax. But with this proposal, use less, pay a new tax.

Second, there’s a logical disconnect when they say their state’s biggest global warming problem is transportation. While I do believe we are experiencing global climate change, most likely caused by human activities over the past century, I do not believe that Washington’s problem is global warming. The skies over Olympia won’t be a few degrees cooler if Washington emits less CO2.

Third, a tax that penalizes less efficient vehicles tends to harm lower income individuals more directly, who do not have the ability to trade in their 1982 Caprice Classic for a new Honda Fit. Therefore, they are harmed more than someone who can afford to choose a more economical modern car. These folks are already disproportionately harmed by high fuel prices and gas taxes.

Lastly, commercial drivers would be exempt from this legislation. So the guy who, say, owns a landscaping company and drives a three ton F-350 crew cab as his daily commute, but never fills the pickup bed, is exempt from a tax like this? If the bill became law and this provision stuck, I predict a sudden boom in “self employed” individuals in Washington, claiming that they need their vehicles for business purposes to avoid paying the extra fees.

I hope for the sake of Washington’s residents – and for the rest of the country, if their legislators get word of this “bright idea” – that this proposal falls flat on its face, and quickly. Want to tax gasoline? Fine. But don’t talk about climate change when high gas prices are already driving the desired behavior.

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Author: Chris Haak

Chris is Autosavant's Managing Editor. He has a lifelong love of everything automotive, having grown up as the son of a car dealer. A married father of two sons, Chris is also in the process of indoctrinating them into the world of cars and trucks.

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  1. You say it’s OK to tax gasoline but not vehicles that use more gasoline? I don’t see the logic in your statement. I realize that some people have gas-guzzlers and don’t drive them very much, but wouldn’t a tax on gas-guzzlers push some of those people towards buying the most-fuel-efficient vehicle for their needs, regardless of how much gasoline they consume? That is, if someone drives a car/truck that gets 12 MPG, but they all they really need is a grocery-getter that gets 30 MPG, wouldn’t the tax on vehciles encourage at least some of those people to NOT buy more vehicle than they need?

  2. The tax on gasoline IS ALREADY a fuel economy tax. The problem that these politicians are running into is that basically, the existing fuel tax is doing its job too well and discouraging consumption and encouraging the purchase of efficient cars, so it’s reducing their gas tax revenue. Rather than being happy that fuel consumption (and therefore CO2 emissions) are down, they want to slap on an additional penalty on less efficient vehicles.

    Another problem with the registration tax versus the existing gas tax idea is that the only way it would fairly reward/penalize drivers for having an efficient vehicle is if you assume that everyone drives the same number of miles per year. But guess what – that assumption isn’t true. If I buy an H3 but live two miles from work, my carbon footprint will be smaller than the guy driving a Prius 30 miles to work each way. The gas tax encourages buyers to choose either less driving or a more efficient vehicle. The registration-type tax doesn’t discourage the Hummer driver from driving it once his fee is paid.

    Get it now? The bottom line is that the Hummer in and of itself isn’t harming the environment – it only is when it’s being driven. More expensive gasoline makes it less likely that it will be driven and that a more economical choice will be either bought.

    And the H3 buyer who pays 3x more registration fees than the Prius buyer is only looking at a $120 difference per year in the example they gave. The difference in fuel costs will FAR outstrip that $120 difference at $3 per gallon.

  3. If you look at the range of offerings from Detroit, you would think the price of gas is $1 a gallon.

    The public is asking for fuel efficient vehicles and Detroit has not yet responded.

    Toyota has the uglier-than-sin Prius, however Honda, VW, Toyota have promised to deliver new 2009 diesels capable of greater than 40MPG combined driving.

    Where are Detroit’s offerings? Nowhere to be seen and WA is simply putting pressure on all manufacturers to produce fuel efficient vehicles.

    Failure to do so will cost them market share in WA, which might not be a big deal for Detroit, however I would not count on other states to turn up their nose at this tax, especially if it brings in a lot more revenue.

  4. I live in Washington, and yes – it is a pure money grab. Up until 8 years ago or so we had to pay excise tax each year with registration; an average new car was $400 or so. A grass roots effort to get car registration bucked down to $30 made it onto the ballot, and passed with flying colors.

    Of course it should be said that most people don’t care about gas mileage – there are myriad fuel efficient vehicles available for sale, and though they are popular (Corolla, Civic, Camry, etc.), many Americans however are more than happy to drive trucks and SUVs.

    My bet is that if this does get passed it’ll get shot down as being unconstitutional. Statism knows no bounds.

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