A Loophole Big Enough for a Hummer? Not Anymore!

(Washington, DC) - Today Congressman Earl Blumenauer (D-Ore.) and Congressman Ed Markey (D-Mass.) announced that their joint legislation to close the “Hummer” tax loophole is expected to pass the House tomorrow as part of a larger energy package. The provision, based on H.R. 2715 – legislation introduced by Reps. Blumenauer, Markey, and others – would fix a serious loophole in the tax code that provides an additional tax incentive for business purchases of luxury SUVs weighing over 6,000 lbs.

Congressmen Blumenauer is a member of the Ways and Means Committee and Select Committee on Energy Independence and Global Warming, which Congressman Markey chairs. The House energy package is the result of months of work and ten committee bills that address energy and global warming. The Hummer loophole provision was included in H.R. 2776, the Renewable Energy and Energy Conservation Tax Act of 2007, which will be included in the final package.

“We are finally fixing a perverse incentive to buy the biggest and dirtiest cars on the market,” said Congressman Blumenauer.  “As gas prices skyrocket, our reliance on foreign oil increases, and the earth warms, we must make adjustments. Needless to say, closing a silly loophole like this one – and getting rid of economic incentives to purchase the biggest, least efficient vehicles – is an obvious step in reducing our carbon footprint. It is refreshing to be part of a new Congress that is finally addressing global warming, which is no doubt this generation’s greatest challenge.”

Originally intended to help businesses buy necessary heavy-duty work vehicles, the “Hummer Tax Loophole” has for years allowed write-offs of anywhere from $100,000 to the current figure of $25,000 for the purchase of the largest, most gas-guzzling luxury SUVs, even as concerns over gas prices and dependence on imported oil have grown. The change would not affect legitimate business investments in trucks or vans, such as construction site trucks or farm vehicles.

"Closing this loophole creates fairness in America’s vehicle showrooms. In a time of rising oil dependence, we’re finally getting rid of an incentive that unfairly skews the market away from the more efficient, cleaner cars and SUVs American businesses and families say they want," said Chairman Markey.

Over 30 models of SUVs qualify for the loophole, including some of the least fuel-efficient vehicles on the road today. They include the BMW X5 (EPA rated 16 mpg combined), Cadillac Escalade (14 mpg), Jeep Grand Cherokee (12 mpg) and Ford Expedition (15 mpg).

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