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New GGT (Gas Guzzler Tax) Formula


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With the new fuel mileage standards coming out for 2008, are the GGT calculations being updated? If not, GGT will hit harder on performance models (Shelby GT, GT500, etc.) than they did in 2007, and I am guessing that even the "lowly" Mustang GT will then be hit. Anyone heard how this change will be handled?

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What is the Gas Guzzler Tax?

 

The Energy Tax Act of 1978 established a Gas Guzzler Tax on the sale of new model year vehicles whose fuel economy fails to meet certain statutory levels. The gas guzzler tax applies only to cars (not trucks) and is collected by the IRS.

 

The fuel economy figures used to determine the Gas Guzzler Tax are different from the fuel economy values provided on this web site and in the Fuel Economy Guide. The tax does not depend on your actual on-the-road mpg, which may be more or less than the EPA published value. The purpose of the Gas Guzzler Tax is to discourage the production and purchase of fuel inefficient vehicles. The amount of any applicable Gas Guzzler Tax paid by the manufacturer will be disclosed on the automobile's fuel economy label (the window sticker on new cars).

GAS GUZZLER TAX

Unadjusted MPG (combined)*

 

Tax

at least 22.5

No tax

at least 21.5, but less than 22.5

$1000

at least 20.5, but less than 21.5

$1300

at least 19.5, but less than 20.5

$1700

at least 18.5, but less than 19.5

$2100

at least 17.5, but less than 18.5

$2600

at least 16.5, but less than 17.5

$3000

at least 15.5, but less than 16.5

$3700

at least 14.5, but less than 15.5

$4500

at least 13.5, but less than 14.5

$5400

at least 12.5, but less than 13.5

$6400

less than 12.5

$7700

 

* The combined fuel economy MPG value (55% city, 45% highway) is used to determine tax liability. The MPG value is also adjusted slightly to account for differences in test procedures made since the base year, but it is not adjusted for in-use short fall. The unadjusted combined MPG of a vehicle can be approximated from the city and highway values provided in the Fuel Economy Guide and on this website by the following equation:

 

(1/(.495/City MPG + .351/Highway MPG)) + .15

 

Since this is an approximate calculation, the actual gas guzzler tax may be off by one tax bracket.

 

 

It's just a scam IMO. We drove the Shelby all day yesterday and according to the computer our average fell to only 24.9 mpg and that was a mix of driving easy and hard, highway and city.

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With the new fuel mileage standards coming out for 2008, are the GGT calculations being updated? If not, GGT will hit harder on performance models (Shelby GT, GT500, etc.) than they did in 2007, and I am guessing that even the "lowly" Mustang GT will then be hit. Anyone heard how this change will be handled?

 

 

 

BTW: Isn't it amazing how much 1 MPG less can cost you?

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Since this is an approximate calculation, the actual gas guzzler tax may be off by one tax bracket.[/i]

It's just a scam IMO. We drove the Shelby all day yesterday and according to the computer our average fell to only 24.9 mpg and that was a mix of driving easy and hard, highway and city.

 

 

I've got to tell ya... The window sticker says fuel economy is gonna be between 17 and 23 (on average), I'm quite surprised at how well the car does. My wife and I took a trip on the interstate last week, Auto trans, A/C on, cruise set at 75 and we got about 27 MPG!!! I thought that was phenominal, to say the least. Typically, on our commute to and from work (33 miles each way) of rush hour traffic, we avg about 21 MPG (no, I can't use the cruise).

 

I have NO complaints with this car at all...

 

Gary

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So far, the actual calculation as well as actual mpg observations have been posted, but nothing on topic. Based upon this, I trust the everyone else is as in the dark as to how the new 2008 factory mpg estimates will affect the gas guzzler tax applied to the new 2008 cars.

 

Is there anyone at Shelby (Amy, John?) that could comment on this? With the new 2008 cars right around the corner, this issue has the potential to increase the cost of an otherwise-identical-to-2007 model, thereby reducing the demand (remember ECON 101?) for such cars. I have to think that someone somewhere has thought this thing through.

 

If prices are going up for 2008, I'm guessing that there are people out there that will want to take this into account when considering a 2007 purchase.

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