China Prepares To Tax All Gas-Guzzlers - Up To 27% Surcharge

[hatrack]

Alarmed by high world oil prices and sporadic shortages of gasoline and diesel fuel in big cities this summer, China's leaders are drafting plans to impose steep taxes on cars and sport utility vehicles with gas-guzzling engines. The taxes would add as much as 27 percent to the price of vehicles with big engines, notably sports cars and SUVs, auto industry officials and people advising the government on the plan said. At the same time, taxes may be cut slightly for models with the smallest, most efficient engines, though the details of these cuts are still under discussion, they said.

The taxes follow China's adoption on July 1 of fuel economy standards that are more stringent than those in force in the United States. The Bush administration announced plans on Tuesday to phase in tougher fuel economy rules for light-duty trucks in the 2008 to 2011 model years, but the Chinese have already imposed stiffer standards to take effect in 2008-9.

Since the 1970s, the United States has had a so-called gas-guzzler tax of up to $7,700 on cars that get very low gas mileage. The tax falls mainly on sports cars with huge engines, like Ferraris, because SUVs, pickup trucks, and minivans are exempt from the tax - an exception that has contributed to a shift away from cars and toward these trucklike vehicles in the American market.

The planned taxes in China are part of a much broader effort to improve the nation's energy security. Efforts by state-controlled oil companies to buy foreign businesses have drawn the most attention, particularly China National Offshore Oil Corp.'s unsuccessful $18.5 billion bid this summer for Unocal, and China National Petroleum Corp.'s $4.18 billion deal on Monday to buy PetroKazakhstan. But China has also been focusing on energy efficiency. Zhang Guobao, vice minister of the State Development and Reform Commission, said last week that China's next five-year plan, for 2006 through 2010, would put energy conservation ahead of expanding supplies, the official New China News Agency said.

EDIT

http://www.iht.com/articles/2005/08/26/business/yuan.php

[oneighty]

1. "energy conservation ahead of expanding supplies"

A unique idea.

No way that it will fail to help oil shortages.

180

[pauldavid]

2. When your leaders have a science background

they make good decisions about things like this. To bad our leader only has faith based plans to combat economic and environmental issues. For that matter, all of his plans are based on faith. He just hopes they will work.