Trucking is the lifeblood of the American economy. We merge millions of people and machines 24 hours a day, 365 days a year, to transport nearly every product produced, manufactured and sold.
Trucks move approximately 70 percent of the nation’s freight, and four out of five communities rely solely on us to deliver the goods to run their businesses, feed their families and fill their homes.
While trucking sustains the vitality of the U.S. economy, we also carry a heavy tax burden, paying the highest corporate tax rate of any transportation mode, including rail. Because of that reality, we can say with absolute certainty that comprehensive and permanent tax reform can get our economy rolling at full speed, and we urge Congress to make it a reality by year’s end.
The trucking industry employs 7.4 million people and is as varied as the goods we carry, ranging from Fortune 500 companies with hundreds of thousands of trucks and employees to small, family-operated business.
In order to operate, we grapple with a large and onerous web of taxes that only begins with the personal and corporate income tax and estate tax. Moreover, trucking pays $40 billion in federal and state highway-user taxes, and most or all of four of the five federal excise taxes that flow directly into the Highway Trust Fund. This includes the tax on special fuels, the heavy vehicle use tax, the 12 percent excise on new trucks and trailers as well as the tire tax.
Although commercial vehicles like trucks account for only four percent of vehicles on our roads, we pay nearly half the Highway Trust Fund tab.
It is of paramount importance that the solvency of the Highway Trust Fund — which pays for our nation’s roads and bridges — be stabilized and increased if America’s infrastructure is to meet the promise of the 21st Century. The trucking industry is committed to paying our fair share and can continue to do so, so long as highway user fees and taxes are structured correctly.
Conventional tax reform is the ideal path — lower the rate, and broaden the base. Such comprehensive reform will not only benefit the bottom line of American business, it will also help make the passage of an infrastructure bill possible, something that President Trump has declared to be a priority.
Trump’s proposed corporate rate reduction to 15 percent is a great starting point, cutting nearly in half what our industry currently pays. By reducing the tax burden on the truckers that literally move our economy, we will be able to invest more in our employees, equipment and the growth of our companies — which will benefit Americans up and down the supply chain, from the manufacturer to the consumer.
A large majority of trucking companies are either sole proprietorships or family operated businesses, and we believe there should be equivalent rates for all business, regardless of how they choose to organize. Tax reform should not result in smaller businesses being taxed at a higher rate than that of traditional corporations.
Eliminating the extremely complex rules that govern depreciation is critical for an industry as capital-intensive as trucking. Immediate expensing of capital outlays would accomplish this goal. Finally, we would like to see a repeal of the individual and corporate alternative minimum tax, which would further simplify many motor carriers’ tax burdens.
Few industries are as connected to every facet of the American economy as is trucking. From that vantage point, we can see what comprehensive tax reform would do to drive economic growth. Every day, we proudly do our job to move America forward. Now we’re calling on Congress to do the same.
Chris Spear is president and CEO of American Trucking Associations, the largest national trade association for the trucking industry.