Gas Guzzler Tax

AAA

DEFINITION of 'Gas Guzzler Tax'

An additional tax on the sale of vehicles that have poor fuel economy. The Energy Tax Act of 1978 established the gas guzzler tax and was designed to encourage the production and use of more fuel efficient vehicles. The gas guzzler tax is administered to passenger cars, trucks, minivans and SUVs.

INVESTOPEDIA EXPLAINS 'Gas Guzzler Tax'

A vehicle is subject to a tax if it gets less than a certain number of miles per gallon. This is one of many reasons why you no longer see car manufacturers producing 1970s-style, gas-guzzling, oil-burning vehicles. The tax is posted on the window stickers of new cars; the lower the fuel economy, the higher the tax.

RELATED TERMS
  1. Sin Tax

    A state-sponsored tax that is added to products or services that ...
  2. Taxes

    An involuntary fee levied on corporations or individuals that ...
  3. Luxury Tax

    A tax placed on products or services that are deemed to be unnecessary ...
  4. Indirect Tax

    A tax that increases the price of a good so that consumers are ...
  5. Corporate Tax

    A levy placed on the profit of a firm, with different rates used ...
  6. Severance Tax

    A tax imposed on the removal of nonrenewable resources such as ...
RELATED FAQS
  1. What does marginal utility tell us about consumer choice?

    In microeconomics, utility represents a way to relate the amount of goods consumed to the amount of happiness or satisfaction ... Read Full Answer >>
  2. How does the role of Medicare/Medicaid affect the drugs sector in the U.S.?

    Medicare and Medicaid have enormous influence on the pharmaceutical, or drugs, sector in the United States. For instance, ... Read Full Answer >>
  3. In what instances does overhead qualify for certain tax allowances?

    Businesses are just as keen as anyone else to keep their tax burdens low by any means possible. Overhead expenses often qualify ... Read Full Answer >>
  4. What are some common ways product differentiation is achieved?

    There are many ways to achieve product differentiation, some more common than others. Horizontal Differentiation Horizontal ... Read Full Answer >>
  5. What are the ethical arguments against government subsidies to companies like Tesla?

    The ethical argument behind government subsidies is that they should be put into place to help industries that will, in turn, ... Read Full Answer >>
  6. How can tariffs cause inefficiencies in domestic industries?

    Any government regulation naturally creates inefficiencies in a pure supply and demand marketplace. When it comes to the ... Read Full Answer >>
Related Articles
  1. Home & Auto

    Getting A Grip On The Cost Of Gas

    Feeling overwhelmed by rising oil prices? We offer some tips that will save you money.
  2. Budgeting

    Free Car Payment Insurance: What's The Catch?

    Many dealers are offering payment protection plans on new cars. Are they right for you?
  3. Active Trading

    Cheap Steps To Reduce Your Carbon Footprint

    Making small adjustments to your habits and lifestyle can have big payoffs.
  4. Home & Auto

    Hybrids: Financial Friends Or Foes?

    Forget the planet for a minute - what really matters is whether these vehicles fit your budget.
  5. Options & Futures

    Fueling Futures In The Energy Market

    The energy market influences every aspect of our lives, and these four options are its driving force.
  6. Insurance

    Reduce Your Carbon Tire Print

    Find out whether you should buy new, buy used or just make your machine a bit more green.
  7. Entrepreneurship

    Can Business Evolve In A Green World?

    Learn how global warming is starting to heat up America's corporate climate.
  8. Options & Futures

    Henry Ford: Industry Mogul And Industrial Innovator

    This man made his dream of bringing the automobile to the masses a reality.
  9. Active Trading

    How Does Crude Oil Affect Gas Prices?

    Find out how this commodity's fluctuating price affects more than just how much you pay at the pump.
  10. Options & Futures

    Car Shopping: New Or Used?

    Don't get taken for a ride. Learn the pros and cons before the salesperson makes a pitch.

You May Also Like

Hot Definitions
  1. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  2. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  3. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  4. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  5. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  6. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!