Representative association of General Motors, Ford and Chrysler, the American Automotive Policy Council Inc, has thrown its weight behind a proposal in Congress that discriminatory taxes levied upon car rental customers be brought to an end. It is claimed that $7.5 billion has already been charged to the American public through such charges.

President of the American Automotive Policy Council, Stephen Collins, said that discriminatory taxes on car rentals were being imposed because of the incorrect assumption that it is mostly tourists who hire vehicles, and that tourists are affluent enough to be able to pay extra when renting a car. He described that charges as a luxury tax.

Mr Collins went on to point out that figures proved that more than half of all rental vehicles were taken in neighbourhood locations by middle to low income consumers, not from airports. He said that the extra charges were clearly being misdirected and that fair taxation principles were not being applied.

The House Judiciary Subcommittee has heard the legislation entitled ‘The End Discriminatory State Taxes for Automobile Renters Act’, and if it is approved it could mean the end of local government’s ability to charge customers extra when they hire a car.

Mr Collins said that local governments were wrong to assume that those hiring vehicles were from the better off sections of society and that by taxing indiscriminately, consumers on every income level were being hurt. He added that the taxes also damaged American jobs because of their misdirected nature.