I was reading an article in the New York Times about the proposed overhaul of the New York City taxi fleet; all of the finalists in the selection process are minivans targeted at small business owners (Ford Transit Connect, Nissan NV200, and Turkish company Karsan's entry). Just for fun, I searched all three on Wikipedia (and got no results for the last one). While reading the article about the first, I saw that it goes through a rather ridiculous shipping/manufacturing process just to avoid the "chicken tax". I then clicked that article.
Apparently, this tax was put into place in the 1960s in response to France and West Germany's tariffs on goods like chicken. Since then, all the terms of the tax have been lifted except for the tax on light trucks. What this means is that automakers must build light trucks and minivans like these in the US to avoid this rather excessive (and needless) tax. This doesn't just apply to foreign automakers; as you can see, this applies to Ford as well with its Transit Connect. To get around it (because Ford's US plants aren't capable of building the Transit Connect (yet)), Ford imports these vehicles with windows and rear seats (thus qualifying as a passenger vehicle and thus making it exempt from the tax) and then rips out the seats and seatbelts and replaces the windows with metal panels once in the US.
Isn't that ridiculous and ridiculously wasteful (both of materials and money, which goes to show that quite a few taxes create real waste)? (Granted, the seats and windows are recycled, but it would still probably be less wasteful to just not use the materials at all as opposed to processing these materials at a recycling center after the fact.) Also, isn't it ironic that domestic companies that are supposed to be helped by these tariffs are actually being directly hurt by them? The Cato Institute, a libertarian think tank, calls this tax a "policy looking for a rationale". It may have made a little sense 50 years ago, but now, I wholeheartedly agree with them. Will common sense please stand up?
Apparently, this tax was put into place in the 1960s in response to France and West Germany's tariffs on goods like chicken. Since then, all the terms of the tax have been lifted except for the tax on light trucks. What this means is that automakers must build light trucks and minivans like these in the US to avoid this rather excessive (and needless) tax. This doesn't just apply to foreign automakers; as you can see, this applies to Ford as well with its Transit Connect. To get around it (because Ford's US plants aren't capable of building the Transit Connect (yet)), Ford imports these vehicles with windows and rear seats (thus qualifying as a passenger vehicle and thus making it exempt from the tax) and then rips out the seats and seatbelts and replaces the windows with metal panels once in the US.
Isn't that ridiculous and ridiculously wasteful (both of materials and money, which goes to show that quite a few taxes create real waste)? (Granted, the seats and windows are recycled, but it would still probably be less wasteful to just not use the materials at all as opposed to processing these materials at a recycling center after the fact.) Also, isn't it ironic that domestic companies that are supposed to be helped by these tariffs are actually being directly hurt by them? The Cato Institute, a libertarian think tank, calls this tax a "policy looking for a rationale". It may have made a little sense 50 years ago, but now, I wholeheartedly agree with them. Will common sense please stand up?
