The SUV disease spreads

I was dismayed to hear the story "SUV Buyers Defy High Price of Gas in France" on NPR this morning. This piece discusses how SUVs are becoming ever more popular in France, to the extent that Renault and Peugeot are going to be coming out with new SUVs in 2006 and 2007, respectively. (On the other hand, the mayor of Paris is considering banning SUV traffic in the city center during rush hour, and there's a rogue group of anti-SUV activists who let the air out of the tires of the SUVs they come across.)

Personally, I liked having at my disposal Roscoe Bartlett's famous comment about how we'd be hardpressed to argue that Europeans are worse off than we are because they have higher gas prices and drive smaller cars: "I see as many smiles on their faces as I see on Americans' faces." I hope this is a trend that isn't going to catch on.

There was an article in the NY Times today about how SUV sales fell in the month of September due to a combination of high gas prices and companies ending the "employee discount" BS. I wonder what GM employees thought of giving away one of their big perks?
Green Car Congress has a good post with stats on this:

I know I've dropped this quote before, but it is worth remembering that energy use does not correlate well with happiness:

The researchers for World Values Survey described the desire for material goods as "a happiness suppressant".

    "They say happiness levels have remained virtually the same in industrialised countries since World War II, although incomes have risen considerably.

    The exception is Denmark, where people have become more satisfied with life over the last three decades."

- more here:

- Newsweek version here:

I like the mention of Denmark, because they are famous for their bicycling ;-)

Indeed, but try explaining that to Joe SUV Driver: "Hey Joe, I don't think you're happier just because you drive an SUV." It may actually be true if you factor in all other aspects of his life, but I fear that there really is some sense in which people are fiercely protective of their SUVs and believe that their lives are improved because of them.

Still, Bartlett's point is the same as the one you're making. In his highly anecdotal version, the Europeans are just as happy as we American gas guzzlers are.

The problem is that although high energy use doesn't make people happy, energy shortages do make people unhappy. (In that respect, energy is a bit like money.) So all those SUV drivers are going to be extremely upset once they can't affod to fill up.
A new happiness article came out a few days ago:,,2099-1793873_1,00.html

It even has the mention of "four-wheel-drive:"

Modern humans, stuck with an ancient brain, are like rats on a wheel. We can't stop running, because we're always looking over our shoulders and comparing our achievements with our neighbours'. At 20, we think we'd be happy with a house and a car. But if we get them, we start dreaming of a second home in Italy and a turbo-charged four-wheel-drive.

This is called the "hedonic treadmill" by happiness scholars. It causes us to rapidly and inevitably adapt to good things by taking them for granted. The more possessions and accomplishments we have, the more we need to boost our level of happiness. It makes sense that the brain of a species that has dominated others would evolve to strive to be best.


At the Royal Institution, Nettle explained how brain chemistry foils our pursuit of happiness in the modern world: "The things that you desire are not the things that you end up liking. The mechanisms of desire are insatiable. There are things that we really like and tire of less quickly -- having good friends, the beauty of the natural world, spirituality. But our economic system plays into the psychology of wanting, and the psychology of liking gets drowned out."

Just something for you guys to think about. Those who own their business pay much higher taxes than those who work for someone else. To offset these taxes, you must basically spend quite a bit of money in the form of "Business Expense" or else the chunk Uncle Sam takes is pretty hefty.

Uncle Sam pays not only mileage expense but let's you depreciate your vehicles. The more expensive the vehicle, the more you get to depreciate. But it has to pass the "business use" sniff test, so buying a Viper or a Lamborghini will not usually work.

What will nearly always work is buying a 4-door luxury car or a 4x4 diesel truck, with every gizmo and option you can get them to stick on it. Since they raised the mileage expense, it helps to offset higher gas prices as well.

Uncle Sam gives you two choices - feed him or feed his debt driven consumer economy. If you feed him, you get bupkiss. If you feed his economy, at least you get to drive something nice...

Well said and extremely relevent to the depth of the hole we've dug.
I have workd for myself and as an employee, and I don't think it's true that the self-employed pay extra taxes. The only reason it looks like that is because of the SE tax, but that basically offsets employer contributions for payroll employees (ie it's money that doesn't look like it's coming out of an employee's paycheck, but really it is part of the difference between what an employer has to pay, and what the employee gets).
I think the issue is that you have more control over how you spend that money. Anything that could be a dual purpose - conference at a resort for instance - goes in as a business expense and does not get taxed. It is an inducement to overconsume if you can book the expense as a business expense.
I agree those incentives exist.
I've been responsible for the finances of a Subchapter S corp. owned by a small circle of individuals. Sure, business expenses are pre-tax, which means, depending on your bracket, you save roughly a third versus post-tax expenses. But they're still expenses, and any good business person strives to minimize unnecessary expenses. I've never seen an instance in which we spent money simply because it was "deductible."
Please enlighten us as to how business owners pay more taxes than the rest of us.  I'm not just trolling here; I'm really curious.

When I had a consulting business, I remember having to pay self employment taxes (the other half of social security and medicare).  But that's really just a tax that everyone has to pay.  It's just that the business owners get to do the paperwork for it.

Or are you talking about something else like state taxes?

What business owners can do that the us low class wage earners can't do is deduct business expenses like SUV's, fancy lunches with 'clients' and the expense for the fancy aquarium in the waiting room.  We can only spend our after tax income on those things.

The self-employment tax is particularly nasty because it's regressive: People who have high-paid (ie. over ~$80K) jobs but do some extra work on the side don't have to pay it, whereas the genuinely self-employed do. Combined with state taxes, it can easily drive the marginal tax rate to >50%.

The other big cost is health insurance. Not technically a tax, I know, but the effect is the same.

I believe everyone is taxed on the first ~80K.  Those high-paid people do pay the tax (their employer actually pays it).  But if their employer paid them as a contractor, the employer could afford to pay them more (their salary+the payroll taxes).  Uncle Sam gets it one way or another.
Health insurance isn't a free good; it's part of your total compensation package. It's always better to look at your total compensation (salary + employer's social security contribution + benefits) rather than your salary alone to determine how much you get paid.
I just posted on The Cost of Energy ( about the Sept. vehicle sales in the US.

Two links with copious model-level data on Ford and GM sales:



Why do SUVs always seem to attract heavy opprobrium ("disease"), while pickup trucks, mega- and giga-houses, and vast quantities of superfluous business travel mostly do not?
I think they do attract disdain, too, but SUVs have extra value-added ickiness, because they're for the most part totally unnecessary. Many minivans (but not all), for example, have better fuel efficiency, so why don't people who need big vehicles buy them instead? Simply for the image. Also, I don't think most people are critical of a family of 4 or 5 buying a minivan or even an SUV (maybe), but when a single person or a couple buys one, it's certainly overkill. A single person or a couple would never buy a minivan just to have a car that makes them the biggest vehicle on the road. Or how about a Hummer? No one needs a Hummer.

As for gigantic houses, well, I'm certainly equally disdainful of those. I think they're unnecessary the way SUVs are. This goes along with my general distaste for suburbia.

And I'm not a businessperson, so someone else can comment on the superfluosity of business travel.

I've known couples with dogs that have purchased a minivan.  But, then again, the dogs are their children.
I am a single guy who owns a minivan. But I am also never able to fit in small cars, I am tall, thought not large. But I do tend to haul things Like Plants, and construct things, I am a trash pile gatherer, So you are likely to see a few old 4 x 4 landscaping timbers in my van as you are me and the dog.  I guess I don't need a minivan, But at least I don't go riding it out in the mud every weekend. Or for that matter much at all. I've used its cargo space to Haul things for people.  And Hopefully it will be the last vehicle I will ever own. I don't drive it to Look good, nor because I want the biggest thing on four wheel.

 I do as well think the bigger SUV's are just that much extra steel to run around in. And I can't see why anyone with a brain wants them, except I think some folks just can't see this whole mess lasting past the next season of Survivor, or that they do not have any real Brain matter up there to fool with.

 But then Again, I can walk the 6 miles across town just to visit a friend.

           Roses,  The petals make a good salad or out of hand snack, a bit tart,  The hips if the big red kinds have loads of vitamin C in them and make good teas, or jams.

Also, fascinating article in the NY Time real estate section today on the declining interest in giant McMansions.

(Hat tip: Treehugger)

More of a plateau than a decline, I'd say.
OK - I will.

Business owners actively search for ways NOT TO PAT taxes due to our inordinate burden. So traveling for a conference or seminar can be a total deduction from you bottom line, lowering your adjusted gross considerably. If you happen to take your significant other, then you are basically traveling for half price all the way around.

It comes down to spend it or pay it in taxes - not a difficult decision for most business owners.

Sorry, but this still doesn't make any sense.  These business expenses are nor freebies.  They result in the business paying less tax, but they also result in the business having a lower bottom line.

Consider a consultant who makes $100,000 a year.  I don't know anything about the US tax rates, so let's assume that he pays 30% tax.  Thus he pays $30,000 tax and ends up with $70,000 'in his hand'.

Now let's say that he decides to go to a flash conference at a resort that costs $5000.  Becuase it is tax-deductible, this amount is deducted from his gross income ($100,000) before his tax is calculated.  Thus he ends up paying $28,500 of tax on a total taxable income of $95,000, and ends up with $66,500 'in his hand'.

So, yes, by going to the conference he ends up paying $1,500 less tax, but he also ends up with $3,500 less in his pocket!

Paying $3,500 to lower your 'inordinate burden' by $1,500 does not seem to make financial sense to me.

If you were meaning something else, then please explain what you meant.

Well, it does make for a pretty big discount on the conference price, which probably does have some impact on the decision whether or not to go.
People don't think rationally, even when doing calculations. Some people really do get so obsessed with lowering taxes that they'd rather spend all their income on tax-deductible expenses than have anything left over to be taxed on.

With vehicles, there's a particular stupidity in the tax code that means an SUV can be tax deductible whereas a regular car may not be. So for the self-employed, an SUV can actually  be cheaper than a car. (This is talking about the sticker price alone, of course. If they actually drive it any significant distance, the SUV's gas-guzzling will quickly make it more expensive.)

I think I've also seen people get carried away (to use a less extreme term than "obsessed") in racking up tax-deductible expenses.  Or in the dot-com thing I saw people hold their stock all the way down, because they wanted those long term gains.

I think sometimes it pays to be a tough guy, and pay the tax.

For that matter, people are equally irrational with regard to the infamous home mortgage interest deduction. How does the old pitch line go? The more you spend, the more you save!
It only makes sense for amounts you would spend anyway.  That's why small business owners try to classify as many ordinary expenses as possible as business expenses.  You have to be careful not to violate the IRS' rules though, in case you are audited.  For example, I had a second phone line before starting my business.  It's a no-brainer to now claim it as a business expense.  My accountant was also able to point out a whole bunch of expenses that I didn't think I could claim.

To take your example, if you are going to attend the conference whether or not it can be claimed as a business expense, you definitely benefit by $1,500 by claiming it as a business expense.  What does not make sense is to attend the conference merely to claim the expense.

oops - NOT TO PAY

I wish I could just pat my taxes...

Some of this discussion contains the sort of statements that get labeled as 'leftist' (said with a sneer and followed by spitting) by fearful right-wingers.

Even though I think SUVs are genuinely stupid, I don't think I have any right to tell someone what type of vehicle to buy except where my life is significantly and negatively affected by that choice. (So getting those Hummers off the road because they are a safety nightmare for other drivers is perfectly valid.)

My favourite solution to the SUV symptom is just to raise fuel taxes. Heck, by taxing carbon emissions and crediting carbon sinks, we can basically discourage all fossil fuel use, but still leave the choice with consumer. Throw in a monthly cheque for every citizen to cover basic energy needs and you have a system that leaves people free to decide what's right for them, dicourages consumption of a dwindling resource, makes green-folk happy, and doesn't leave the poor out in the cold.

Of course, the approach I've outlined requires a limited resource that's production seems to have peaked in the 80s: Political will.

According to the WSJ, and other sources, sales of large SUV's like Expeditions are down almost 60% year over year.

In some cases, dealers are flatout refusing to accept large SUV's as trade-ins.  

That's bound to keep people from buying new ones, if only because used ones will be so much cheaper.

It's about time that market collapsed.

SUV sales declining in the US? and then the French say "the SUV has a certain ... je-ne-sais-quoi ... n'est-ce pas?"
Tikal, the mayan temple featured in the original star wars was built in the last 100 years of that empire. Even as the society crumbled around them they found the resources and energy to construct one of the largest stone temples ever built. My guess is that SUV's will continue to be produced and driven right to the very end of oil. As oil becomes a luxury item, availible to only those that can afford it, I bet you'll see beautifully restored hummers being taken out for sunday drives by older men. Most suv drivers would consider the actual running cost to be a marginal expense in comparison to the other large costs they run or indeed their income. If you're pulling 250, what's another hundy a week if you don't really care for the environment. Explaining or ranting to an suv driver about the environmental costs of their purchase, is a good indicator of just how impossible the whole peak oil argument is to quantify let alone cause change out there in the wider community. Just how will we explain to our grandchildren, that the feedstocks used in the production of life changing pharmaceuticals, were all burned up in a great orgy of consumerisim?
Everybody loves to hate SUV's... at least in the liberal world.   Where I live a person can't function without 4 wheel drive 4 months of the year.    I wouldn't be able to go to work every day with 8 inches of fresh snow on the ground and I wouldn't be able to go to the grocery store.    I get 15 MPG with my guzzling hog and I couldn't care less.   It's a necessity and I'm paying the bills.    Let the tree huggers cry a river, I'm not listening.
When Washington rations gasoline so that poor workers can get to work and your ration only gets you halfway home again, will you be upset when we say we told you so?
Yes, but you don't NEED a 4wd SUV to get through 8 inches of fresh snow.  Any of the admirable range of smaller all-wheel-drive Subaru stationwagons or even smaller hatchbacks won't even break sweat in conditions like that.

Ultimately, I don't care if you drive an SUV, because you do not directly affect me and my driving habits.  The only person directly affected is YOU.

If you have the cash to fill up your tank, then you go for it!  I'm sure you don't need the extra money anyway!

Also, OilHog, what you describe is actually a valid use of an 4WD SUV.  It would make no sense at all to tell a contractor that he has to use a 2WD Toyota Corrolla to travel to a building site that doesn't even have a road going to it!

What I and the other 'treehuggers' are complaining about is the Mom in downtown metropolis using her 4WD SUV to drive her kids across 3 city blocks to their school and back.

Here in NZ there is a posh suburb in Auckland called 'Remuera' and this type of vehicle driving around Auckland (without a speck of mud on it) is known as the 'Remuera tractor'!

Have a good one!

You may pay the fiscal bill now, but it will be your children that will probalbly shoulder the environmental cost. If you want to dance with the devil, someone has to pay the bill.

When you take a breath of that fresh mountain air, that's a privilge, not a right.  Is it your right to make lifestyle choices that will ultimatly affect the ability of others to live in an environment where they can't breathe the air and eat the food ?

SUV's are a small part of a very large problem. 4WDs are an integral part of rural life, I accept that, but Are SUV's a vital part of city living ?

How does the choice of a consumer in a global market affect my life? It's spring here in NZ, and the hole in the ozone over Antartica is breaking up. That hole was caused largley by CFC's released in the northern hemishere. It means we get increased levels of UV and consquently skin cancer among other delights. When GWB stated that the kyoto protocol does not apply to the developed world, had anyone explained to him that one of the major impacts of climate change will be more hurricanes of greater severity...

Questioning the need for SUV's is critcal as part of the process towards changing the way we, and therefore those that come after us will live.  

I hope this isn't out of line. If it is I ask the moderator to delete it.

I've told this joke to two business acquaintances:

I point to a very large SUV and say "Wow, I didn't know they made p***s that small!"

In each case they had just purchased a very large SUV. Quite embarrassing (but kind of fun).

Lots of new SUV's here in Spain.  Not as many as in the US, but there's a clear growing trend.

Gas is more expensive (5$ a gallon) than in the US, cars are more expensive (many SUV's over 70000$) and salaries are lower.

Don't count of many SUV drivers giving up their vehicles because of gas prices.  In fact, many will buy more SUV's if gas goes up because it gives an "elite image" (they can afford something most can't).

Same here in Finland. We began to see SUV's here just few years ago and sales are growing, but of all cars they are very small percentage. Its trendy and so on. And here general public dont have a clue of peak oil, nor politicans. I would like to see same kinda wake up call here than what is happening in US right now.
Yes, that is correct. And because of the huge tax percentage I think SUV's will stay marginal enough in Finland so that there will not be a huge glut of them in the market ofter oil prices rise enough. The European SUV's also tend to be smaller in size as well as in engine capacity than the SUV's of the USA. Which is all good.

Still, I think it would be a good idea to revise the Finnish tax code so that larger cars - or those that consume fuel excessively - get taxed even more if they do not serve any useful purpose.

what size are these new european SUVs?  what mpg?
At least in Finland the smaller SUVs are market leaders: the Honda CR-V (mpg city/highway: 15/27) for example sells quite well. Compare this to the Chevrolet Suburban (15/19) and you get the general idea. Of course there are larger vehicles on the roads as well but they are rare. SUVs in general are very rare to see, and even more so if you compare the situation to the USA where, it seems, every other vehicle is a SUV.

Perhaps one can think this as a benefit resulting from extremely high taxes on gas and automobiles; the downside is that the cars on the whole tend to be old and not as safe as the new models.

Should have been 22/27 for the CR-V.
I think this discussion still thinks of gas in the order of $2.50-$3.00 and $6-$7 in Europe.

Currently supply & demand for oil are more or less in balance. Because of this and the local fluctuations, oil is only $65.

Next year, demand will outstrip supply with 2.5% or so. The year after, with 5%.

When trying to think about 'Can I still drive my SUV?', you should really concentrate on gas being $5 in the US and $10 in Europe.

The difference is that currently there is no demand destruction, it's just tight. Next year, we will have to go back. For the first time in history. That is a very different ballgame.