The Chicken Tax, and Other Ways the U.S. Government Subsidizes Your Ford F-150
By Em Friedenberg
SUVs and pickup trucks are increasingly common in the United States, despite their role in the catastrophically escalating climate and traffic violence crises. Other countries have managed to maintain a small, safe, and efficient car stock with regulation and pricing, but the U.S., at the coaching of the omnipotent auto industry, has taken the opposite tack.
At best, American policy fails to curb car bloat; at worst, it exacerbates and cements it. The growth of all cars, particularly SUVs and pickup trucks, is the result of policy and regulations informed by anachronistic lines drawn by the U.S. government decades ago, which benefit the production and sales of the largest cars while leaving the smallest behind.
How Car Bloat Got So Bad
In 1975, the United States divided vehicles into two categories, “passenger cars” and “light trucks.” Light trucks at the time were largely farm and work vehicles, and no owner would consider using their slow, expensive, and gas-guzzling truck to take their kids to school. Today, 80% of new vehicle sales are categorized as light trucks, mostly pickups and SUVs used for commutes, grocery store runs, and trips to the park.
Despite this shift, American regulators continue to treat the two categories very differently: light trucks see much more lenient fuel economy and emissions standards, a high “Chicken Tax” import tariff ensuring domestic control over the industry, and a generous “Hummer Deduction” for business owners, all of which bolster the industry and enable carmakers to build bigger, more expensive, and more profitable vehicles.
Plenty of federal support for vehicles exists in the United States, where car ownership and use are heavily subsidized and near-mandated by federal policy and urban design. Gas taxes have been frozen for three decades; car infrastructure is built, maintained, and expanded with taxpayer dollars; engineering codes prioritize car travel; and commuter benefits subsidize car commutes. However, large vehicles in particular are more common, and more destructive, in the United States because the federal government not only permits but specifically incentivizes and subsidizes SUV and pickup truck ownership. The safety, sustainability, and functionality of all vehicles have suffered as a result.
The Problem With Light Trucks
In 2022, the average new car in the United States weighed more than two tons — a full 1,000 lbs heavier than the average car sold in 1980. The largest vehicles, SUVs and pickup trucks, hold an ever-increasing share of sales in the United States, representing four in five cars sold in 2021 and two in five sold globally.
The bloat of all cars, particularly these colossal vehicles, is responsible for the mounting death toll on our streets. Pedestrian fatalities on American roads have climbed year over year with few exceptions since 2009 and are now at levels we haven’t seen since the 1980s. While all cars have grown more deadly as they have gained weight and size, light trucks stand out: the number of pedestrians killed by SUVs grew twice as fast in the last decade as those killed by passenger cars. A person driving a pickup or SUV is much more dangerous to their neighbors than a sedan driver: light trucks are two to three times more likely to kill a pedestrian than a smaller vehicle, 55% more dangerous to cyclists, and more than twice as deadly to the occupants of smaller cars.
Multi-ton vehicles also are spewing exhaust into our air and shredded tire particles into our water, polluting our bodies as well as the planet. The rising share of large vehicles on our streets has a global impact: SUVs were the second-largest contributor to the increase in global carbon emissions from 2010 to 2018, trumping heavy industry, trucks, and aviation.
Despite the pollution and danger produced by these vehicles, American automakers are going all in on their biggest vehicles. They have abandoned the production of cheaper compact cars entirely and zeroed in on their most solvent offerings: pickup trucks, which produce four to five times as much profit than sedans, and SUVs. The most popular car in America has been the Ford F-150 pickup truck for decades, estimated to make $10,000 per vehicle in profit for Ford.
Though the auto industry has thrown its weight behind light trucks, their popularity by now has become a self-perpetuating spiral. More SUVs on our roads lead to even more SUVs; bigger SUVs lead to even bigger SUVs. Choosing to join the light-truck-owning majority makes sense for consumers prioritizing their own safety: when the cars around you look like tanks and drive like sports cars, your Toyota Corolla doesn’t feel like adequate protection anymore. SUVs and pickups dominate the list of the safest vehicles for their drivers, but they also dominate the list of most dangerous for other drivers.
This “vehicular arms race” was responsible for 12% of new SUV, pickup, and van purchasing in 2006. The safety benefits for those inside the vehicle don’t begin to even out the danger imposed on those outside it: one study found that for every driver’s life saved by their large vehicle, 4.3 other lives were lost due to its size.
To begin to slow this feedback loop, we need to understand the current incentives and subsidies that have given light trucks their reign over American roadways — namely, the Light Truck Loophole, Hummer Deduction, and Chicken Tax — and consider how each can be turned on its head to shrink cars once more.
The Light Truck Loophole
The emissions produced by a vehicle’s exhaust pipe — though not by brake and tire wear — are regulated by the EPA and National Highway Traffic Safety Administration (NHTSA)’s Corporate Average Fuel Economy (CAFE) standards, created to curb foreign oil dependency after the 1973 oil embargo. In the 1970s, light trucks were largely industrial and farm vehicles used for hauling, towing, and loading cargo, so it made sense to grant them more leniency and subject them to lower emission standards. However, as they began to be used as passenger cars, these limits have continued to judge SUVs and pickups — which are responsible for the majority of U.S. car emissions — by the lowered standard. While sedans may be required to average 59 miles per gallon by 2026, SUVs and pickups would only need to reach 42 miles per gallon, according to the recent CAFE proposal by the Biden Administration.
Every detail of the CAFE regulations cements the dual standard and worsens the divide. A 2012 change to include vehicle footprints has meant that compact cars with smaller footprints are held to a significantly higher fuel economy standard than larger vehicles: by the new math, a Honda Fit has to reach 27 miles per gallon, while the Ford F-150, which is 75% larger, has to reach only 17 miles per gallon. This has encouraged vehicle manufacturers to beef up their cars and strained and often reduced the engineering and economic viability of midsize vehicles. The EPA is fully aware of the trend, noting in 2022 that the shift from car to light truck production has actually increased overall fleet emissions for some carmakers.
The fine print of CAFE standards similarly benefits SUV makers — each carmaker is judged by its fleetwide average, meaning gas-guzzlers can be offset by more efficient vehicles, and fleets with larger average footprint sizes are judged by a lower standard still. Similarly, a sister 1980 “Gas Guzzler Tax” from the EPA imposes additional fines on inefficient passenger cars — but not light trucks.
CAFE standards were partly responsible for the creation of the SUV, as automakers searched for a way to bring the looser regulations of light trucks to the passenger car market. In the decades since, the auto industry has continued to shift passenger cars into the light truck category, allowing them to sell more and more of their most profitable models without spending money to improve their efficiency, while consumers, who may see lowered initial purchasing prices because of the limited regulation, instead shell out at the pump.
Unsurprisingly, with all of these leniencies towards large vehicles, emission-reduction and fuel economy improvements have slowed to a crawl: between 2020 and 2021, the average new vehicle’s fuel economy didn’t budge at a shockingly low 25.6 miles per gallon, and emissions fell barely half a percent. One study estimated that fuel economy improvements between 1980 and 2006 would have been more than tripled if vehicles hadn’t seen such growth in weight and power. These inefficiencies harm the planet, but they also harm the buyer’s pocketbook: greater gas mileage means less money spent on fuel, with an Obama-era CAFE standard estimated to save drivers one dollar per gallon.
The Hummer Deduction
Section 179 of the Internal Revenue Code, also called the “Hummer Deduction,” is a direct subsidy of large vehicle ownership, allowing business owners to immediately deduct the value of a light truck weighing over 6,000 lbs that is used for business at least half the time.
There are two damaging effects of Section 179: first, buyers who might qualify for the tax deduction are incentivized to buy unnecessarily large vehicles. When Section 179 was enacted in 1958, tractors and other farm equipment were the primary aim; now, buyers can shop from long lists of qualifying models, and as long as they use the vehicle to move between job sites or to transport goods for work, even colossal Bentleys and Porsches come at a steep discount. Why would a realtor buy a Camry to travel between house viewings when an Escalade comes with a $25,000 discount?
The second result is that carmakers have a reason to add weight and size to their midsize vehicles to ensure they are candidates. Elon Musk, prior to debuting the new Tesla Model X, reassured buyers that the vehicle was heavy enough to qualify. On their websites, dealerships and automakers are well aware of the deals and push their benefits to potential buyers. Adding weight to ensure vehicles qualify has contributed to the downfall of midsize vehicles and limited consumer choices, while increasing the overall size of the American fleet.
The Chicken Tax
The Chicken Tax is a huge 25% tariff on imported pickup trucks. The tariff is a relic of post-World War II mercantilism, when cheap American chickens drove down poultry prices abroad, causing European nations to create chicken price controls to protect their own industry. In 1964, at the bidding of the United Auto Workers president, President Johnson imposed a retaliatory tariff on potato starch, dextrin, brandy, and light trucks. Nearly 60 years later, the only remnant of this period is the 25% truck tariff — ten times the import tax on other vehicles.
By increasing the price of foreign pickups, the Chicken Tax reduced competition, squeezing out smaller Japanese and German vehicles in particular and giving American carmakers control over the industry. U.S. automakers chose to go big, expanding the size and sales of their most profitable vehicles, and eliminating more affordable compact truck models from their lineups.
In 1985, mini-trucks made up a quarter of pickups sold in the United States; by 2010, there were none. The market still exists: farmers and ranchers looking for a more practical pickup — with a low bed that’s easy to lift materials into and a cab that can be climbed into without requiring stairs — have resorted to imported 25-year-old Japanese mini-trucks.
Most pickup shoppers in the United States settle for the full-size offerings, whether or not they need them. The most popular vehicle in America for decades has been the Ford F-150, when 70%, 75%, and 35% of pickup owners off-road, tow, and use the truck bed, respectively, once a year or less.
The solution
The blunt categorization of vehicles into passenger cars and light trucks, a remnant of consumer choices from fifty years ago, has contributed to the bloat and popularity of America’s most destructive vehicles.
By continuing this now-arbitrary division, we are putting more and more polluting, lethal, and inefficient vehicles on our roads and sticking shoppers with expensive and limited choices. A simpler and more equitable approach to regulation, in which all vehicles are judged by the same metrics, such as weight, with no strict cut-off points, would do away with the incentives and loopholes that have put pickup trucks and SUVs in every driveway.
A nation of smaller vehicles designed to protect all road users would benefit all, with safer streets, more room on our roads for people walking and biking, and vastly reduced costs from infrastructure maintenance, car crashes, and pollution.
Car owners would benefit as well. The unnecessary weight and size of American cars have made them more expensive, done away with the cheapest options, and limited overall choice. Smaller and more efficient vehicles are cheaper to buy and refuel, and bringing back smaller and midsize vehicles would offer consumers greater choice while stimulating competition to bring prices down further.
With the traffic and climate crises at critical junctures, we need to acknowledge that three-ton SUVs and pickups should be no more common than they were in the 1970s. Removing the “light truck” label and establishing weight-based evaluations that provide fiscal disincentives, not incentives, for heavy vehicles, and prioritizing simplicity in regulations to reduce the ability of automakers to find loopholes would begin to bring down the weight of American vehicles, saving lives, money, and the planet in the process.
Em Friedenberg is the Senior Research Coordinator at Transportation Alternatives. Her years in Portland, Oregon and Copenhagen, Denmark have taught her the value of livability and urban life, and she now works to bring safety, sustainability, and vibrancy to the streetscape of New York City.
This article was originally published in Transportation Alternatives’ Vision Zero Cities Journal as part of the 2023 Vision Zero Cities conference.
