Does the “Hen Tax” encourage individuals to purchase greater vans?

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By smarttaxservice


The “Hen Tax” is a 25 p.c tariff on imported mild vans that was first imposed in 1964, in response to tariffs imposed by some European nations on US poultry merchandise, therefore the title. Identify nonsense apart, the tariff hits the US auto market. however how a lot is it accountable for American shoppers shopping for greater vans? The reply will not be as clear as some suppose.

It’s true that overseas vans they’re sometimes smaller than these bought within the US, and the price arguably prevents them from reaching US clients.

However the proof means that the price, whereas removed from splendid, is not what’s driving curiosity in bigger pickup vans. Some abroad producers have discovered methods to avoid the rooster tax. Subaru bratfor instance, it was a van with built-in rear seats, thus classifying it as a passenger automotive.

Even home producers like Ford have engaged in ploys to keep away from the tariff. Throughout years, Ford TransitConnect it was constructed overseas with seats and was subsequently thought of a passenger automotive. As soon as delivered to this nation, the seats have been eliminated and destroyed, permitting its use as a truck.

And naturally, some overseas producers they’ve constructed factories on this nation and vans constructed on them aren’t topic to the tariff. Nonetheless, these vans, just like the Toyota Tundra, they’re comparable in dimension to vans produced by nationwide producers.

If individuals solely needed to purchase small vans, home producers would construct and promote them. Due to this fact, the bigger dimension of vans in all probability has extra to do with driver demand.

Why would American drivers need huge vans? They could be perceived as safer for the motive force and passengers, though the the alternative is true for these exterior the truck. Additionally, gasoline is less expensive in the US than in Europe. At the moment, fuel within the US is bought for about $3.50 per gallonwhereas costs in Europe fluctuate $5 to $8 a gallon. Which means for a similar variety of miles pushed, People can afford to make use of automobiles that use extra fuel.

One other issue past the rooster tax is the company common gas effectivity (CAFE) requirements that producers should meet with their complete fleet of automobiles. CAFE requirements have has all the time been decrease for vansand since 2011 the usual has been primarily based on the “footprint” of the automobile. Which means bigger vans face decrease mileage necessities than smaller vans. Absent this transformation, producers could not have been capable of produce bigger vans whereas nonetheless assembly CAFE requirements.

Charges typically damage shoppers, and the Hen Tax is not any exception. Repealing the price would introduce extra competitors into the auto business and provides shoppers extra alternative.


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