The tax horsepower or taxable horsepower was an early system by which taxation rates for
automobile
A car or automobile is a motor vehicle with Wheel, wheels. Most definitions of ''cars'' say that they run primarily on roads, Car seat, seat one to eight people, have four wheels, and mainly transport private transport#Personal transport, pe ...
s were reckoned in some European countries such as Britain, Belgium, Germany, France and Italy; some US states like
Illinois
Illinois ( ) is a U.S. state, state in the Midwestern United States, Midwestern United States. Its largest metropolitan areas include the Chicago metropolitan area, and the Metro East section, of Greater St. Louis. Other smaller metropolita ...
charged
license plate
A vehicle registration plate, also known as a number plate (British English), license plate (American English), or licence plate ( Canadian English), is a metal or plastic plate attached to a motor vehicle or trailer for official identificati ...
purchase and renewal fees for passenger automobiles based on taxable horsepower. The tax
horsepower
Horsepower (hp) is a unit of measurement of power, or the rate at which work is done, usually in reference to the output of engines or motors. There are many different standards and types of horsepower. Two common definitions used today are the ...
rating was computed not from actual engine power but by a mathematical formula based on cylinder dimensions. At the beginning of the twentieth century, tax power was reasonably close to real power; as the internal combustion engine developed, real power became larger than nominal taxable power by a factor of ten or more.
Britain
The so-called
RAC horsepower
Horsepower (hp) is a unit of measurement of power, or the rate at which work is done, usually in reference to the output of engines or motors. There are many different standards and types of horsepower. Two common definitions used today are the ...
rating was devised in 1910 by the
RAC at the invitation of the British government.
The formula is:
:
where:
:
is the diameter (or bore) of the cylinder in inches,
:
is the number of cylinders
The formula was calculated from total piston surface area (i.e., "bore" only). The factor of 2.5 accounts for characteristics that were widely seen in engines at the time, such as a
mean effective pressure
The mean effective pressure (MEP) is a quantity relating to the operation of a reciprocating engine and is a measure of an engine's capacity to do work that is independent of engine displacement.Heywood, J. B., "Internal Combustion Engine Fundam ...
in the cylinder of and a maximum
piston speed
The mean piston speed is the average speed of the piston in a reciprocating engine. It is a function of stroke and RPM. There is a factor of 2 in the equation to account for one stroke to occur in 1/2 of a crank revolution (or alternatively: tw ...
of .
The system introduced a somewhat
progressive way of taxing higher-value cars more than low-cost ones but was also introduced to protect the domestic British motor industry from foreign imports, especially the
Ford Model T
The Ford Model T is an automobile that was produced by Ford Motor Company from October 1, 1908, to May 26, 1927. It is generally regarded as the first affordable automobile, which made car travel available to middle-class Americans. The relati ...
.
Henry Ford's mass production methods meant that the Model T was competitively priced with British-built cars despite being a much larger, more durable and more powerful car than other available similarly-priced models. In 1912 Ford opened
a factory to build Model Ts in
Manchester
Manchester () is a city in Greater Manchester, England. It had a population of 552,000 in 2021. It is bordered by the Cheshire Plain to the south, the Pennines to the north and east, and the neighbouring city of Salford to the west. The t ...
, to circumvent the import tariffs that, up to that point, had increased the effective price of foreign cars. Under the RAC's formula the Model T was a 22 'tax horsepower' car, making it more expensive to run than its British-built rivals on sale for the same price.
At first the RAC rating was usually representative of the car's actual (brake) horsepower, but as engine design and technology progressed in the 1920s and 1930s these two figures began to diverge, with engines making much more power than their RAC ratings suggested: by 1924 the engine of the Austin Seven (named for its 7 hp rating) produced 10.5 brake horsepower, 50 percent more than its official rating.
![1912 Wolseley 16-20hp Landaulette 8312296035](https://upload.wikimedia.org/wikipedia/commons/7/78/1912_Wolseley_16-20hp_Landaulette_8312296035.jpg)
It became common for the name of a model to include both its RAC tax horsepower and its actual power output, such as the
Wolseley 14/60 and the
Alvis 12/70
The Alvis 12/70 was announced by Alvis cars 22 September 1937. It was a four-cylinder sports saloon or 4-seater drophead coupé related to the pricier six-cylinder Alvis Silver Crest.
Technical director and chief designer Smith-Clarke was fu ...
of 1938.
To minimise tax ratings British designers developed engines with very long stroke and low piston surface area. Another effect was the multiplicity of models: Sevens, Eights, Nines, Tens, Elevens, Twelves, Fourteens, Sixteens etc. each to fit with a taxation class.
[Motor-Car Taxation. Effects of Different Methods on Design. Models for Home Use and Export. ''The Times'', Saturday, 16 Feb 1946; pg. 5; Issue 50378] Larger more lightly stressed engines may have been equally economical to run and, in less variety, produced much more economically. The system discouraged manufacturers from switching to more fuel-efficient
overhead valve
An overhead valve (OHV) engine, sometimes called a ''pushrod engine'', is a piston engine whose valves are located in the cylinder head above the combustion chamber. This contrasts with earlier flathead engines, where the valves were located be ...
engines as these generally required larger bores, while the established
sidevalve
A flathead engine, also known as a sidevalve engine''American Rodder'', 6/94, pp.45 & 93. or valve-in-block engine is an internal combustion engine with its poppet valves contained within the engine block, instead of in the cylinder head, as ...
layout could easily use very narrow bores. Despite OHV engines having significant benefits in economy, refinement and performance, the RAC system made these engines more expensive to own because it placed them in a higher tax class than sidevalve engines of identical power output.
[ Despite this, by 1948 the Standard Flying Twelve, a typical mid-size saloon, produced from a engine, nearly four times as much horsepower as the RAC system suggested.
While the RAC system had protected the home market from the import of large-engined low-priced mass-produced American cars, the need for roomy generously proportioned cars for export was now paramount and the British government abandoned the tax horsepower system][ with effect from 1 January 1947 replacing it at first with a tax on cubic capacity, which was in turn replaced by a flat tax applying from 1 January 1948. However British cars and cars in other countries applying the same approach to automobile taxation continued to feature long, relatively narrow cylinders even in the 1950s and 1960s, partly because limited investment meant that new car models often had new bodies but their engines were carried over from earlier generations.
The emphasis on long strokes, combined with the nature of British roads in the pre-]motorway
A controlled-access highway is a type of highway that has been designed for high-speed vehicular traffic, with all traffic flow—ingress and egress—regulated. Common English terms are freeway, motorway and expressway. Other similar terms i ...
era, meant that British engines tended to deliver strong low- and mid-range torque
In physics and mechanics, torque is the rotational equivalent of linear force. It is also referred to as the moment of force (also abbreviated to moment). It represents the capability of a force to produce change in the rotational motion of th ...
for their size, but low maximum speeds. The long stroke also meant that piston speeds and the load on the big end bearings became potentially damaging at high power outputs. Many smaller British cars did not cope well with sustained cruising at or more, which led to reliability problems when the vehicles were exported to other markets, especially the United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
. Cars such as the Austin A40, the Morris Minor
The Morris Minor is a British economy family car that made its debut at the Earls Court Motor Show, London, in October 1948. Designed under the leadership of Alec Issigonis, more than 1.6 million were manufactured between 1948 and 1972 in th ...
and the Hillman Minx
The Hillman Minx was a mid-sized family car that British car maker Hillman produced from 1931 to 1970. There were many versions of the Minx over that period, as well as badge-engineered variants sold by Humber, Singer, and Sunbeam.
From the m ...
all achieved notable initial sales success in the US in the late 1940s, until the short service life of the engines when asked to routinely drive long distances at freeway speeds became clear. Other imports originating in countries with different tax rules and existent high speed road networks, in particular the Volkswagen Beetle
The Volkswagen Beetle—officially the Volkswagen Type 1, informally in German (meaning "beetle"), in parts of the English-speaking world the Bug, and known by many other nicknames in other languages—is a two-door, rear-engine economy car, ...
, proved more reliable, and achieved greater sales success.[
]
Australia
In Australia, the various states had their own automobile taxation system. Several depended on the RAC formula, but the flaws of this system were well known as early as 1909. Another formula was the Dendy-Marshall formula, which included an engine's stroke. Several Australian states used Dendy-Marshall, although Western Australia
Western Australia (commonly abbreviated as WA) is a state of Australia occupying the western percent of the land area of Australia excluding external territories. It is bounded by the Indian Ocean to the north and west, the Southern Ocean to th ...
reverted to RAC hp in 1957. The Union of South Africa
The Union of South Africa ( nl, Unie van Zuid-Afrika; af, Unie van Suid-Afrika; ) was the historical predecessor to the present-day Republic of South Africa. It came into existence on 31 May 1910 with the unification of the Cape, Natal, Trans ...
also depended on Dendy-Marshall, at least in the 1920s. The Automobile Club of Australia's "A.C.A. formula" used the same calculations as did Dendy-Marshall formula. The Australian Bureau of Statistics
The Australian Bureau of Statistics (ABS) is the independent statutory agency of the Australian Government responsible for statistical collection and analysis and for giving evidence-based advice to federal, state and territory governments ...
used RAC hp in their ''Registration of New Motor Vehicles, Make of Vehicles, Australia'' statistics until this publication was discontinued in June 1976.
Several Australian states also added vehicle weight to the power rating, to get a power-weight unit which determined taxation.
The Dendy-Marshall / A.C.A. formula is as follows:
:
where:
: = nominal horsepower
: = the diameter (or bore) of the cylinder in inches
: = the length (or stroke) of the cylinder in inches
: = the number of cylinders
United States
During the early twentieth century, automobiles in the United States were specified with a figure identical to RAC horsepower and computed using the same formula; this was known either as "NACC horsepower" (named for the National Automobile Chamber of Commerce
The Automobile Manufacturers Association was a trade group of automobile manufacturers which operated under various names in the United States from 1911 to 1999.
A different group called the Automobile Manufacturers' Association was active in the ...
), "ALAM horsepower" (for NACC's predecessor, the Association of Licensed Automobile Manufacturers
The Association of Licensed Automobile Manufacturers (ALAM), began as the Manufacturer's Mutual Association (MMA), an organization originally formed to challenge the litigation of the fledgling automobile industry by George B. Selden and the Ele ...
), or "SAE horsepower" (for the Society of Automotive Engineers
SAE International, formerly named the Society of Automotive Engineers, is a United States-based, globally active professional association and standards developing organization for engineering professionals in various industries. SAE Internatio ...
). (This last term should not be confused with later horsepower ratings by the SAE.) This value is still used for taxation and license fee purposes in the State of Missouri for passenger vehicles, with electric vehicles assigned to the 12-23 Horsepower bracket by statute.
Continental Europe
Although tax horsepower was computed on a similar basis in several other European countries during the two or three decades before the Second World War, continental cylinder dimensions were quoted in millimeters. As a result of roundings when converting the formula between the two measurement systems, a British tax horse-power unit ended up being worth 1.014 continental (i.e. French) tax horse-power units.[
]
Belgium
In Belgium, the tax power depended on the cubic capacity of the engine in cubic centimeters at the rate of 1 tax horse power for every .
France
The ''Cheval Fiscal'', often abbreviated to CV from "''chevaux-vapeur''" (literally 'steam horses') in tax law, is used for the issuing of French registration certificates known as "grey cards" (''cartes grises''). It is an administrative unit originally calculated partly from the power of the engine and used to calculate the amount of tax that may be due at the time of registration.
The Citroën 2CV
The Citroën 2CV (french: link=no, deux chevaux(-vapeur), , lit. "two steam horse(power)s", meaning "two ''taxable'' horsepower") is an air-cooled front-engine, front-wheel-drive, economy family car, introduced at the 1948 Paris Mondial de l ...
(two tax horsepower) was the car that kept such a name for the longest time.
Its use in France dates from 1 January 1913. It was updated in 1956, with further revisions in 1978 and a new emission-based system introduced in 1998.
It was originally defined using the following formula:
:
where:
: is the number of cylinders,
: is the cylinder bore in centimeters,
: is the stroke in centimeters,
: is the engine speed in revolutions per second,
: is a coefficient depending on the number of cylinders (single-cylinder engine
A single-cylinder engine, sometimes called a thumper, is a piston engine with one cylinder. This engine is often used for motorcycles, motor scooters, go-karts, all-terrain vehicles, radio-controlled vehicles, portable tools and garden machinery ...
: 0.00020; two-cylinder engine
The engine configuration describes the fundamental operating principles by which internal combustion engines are categorized.
Piston engines are often categorized by their cylinder layout, valves and camshafts. Wankel engines are often categorize ...
: 0.00017; four-cylinder engine
The engine configuration describes the fundamental operating principles by which internal combustion engines are categorized.
Piston engines are often categorized by their cylinder layout, valves and camshafts. Wankel engines are often categorize ...
: 0.00015; six-or-more-cylinder engine: 0.00013)
1956 formula
In a circular issued on 28 December 1956, the chevaux fiscaux was defined as:
:
where:
: = puissance administrative,
: = constant of 0.00015,
: = number of cylinders,
: = bore in centimetres,
: = stroke in centimetres,
: = speed of rotation in revolutions per second
The result is multiplied by 0.7 for a diesel engine.
1978 formula
A new system was announced on 23 December 1977 to come into force on 1 January 1978 calculated by the following formula:
:
where:
: = puissance administrative,
: = coefficient of 1 for petrol or 0.7 for diesel,
: = engine capacity in cubic centimetres,
: = parameter calculated from a weighted arithmetic average speed in kilometers per hour theoretically reached by the vehicle at an engine speed of 1000 revolutions per minute in each gearbox ratio (see dropdown table to the right for more details).
1998 formula
From 1998 until January 2020, the fiscal tax depended on a standardised value of carbon dioxide emissions in grams per kilometer (g/km) and the maximum engine power in kilowatts (kW). If C is the amount of released and P the engine power, then:
:
is expressed in horsepower, rounded to the nearest integer. The official emission rate of included in the calculation is taken from the European certificate of conformity.
Germany
Tax horse-power (''Steuer-PS'') was introduced in Germany on 3 June 1906 however in contrast to many regions, i.e. British and French tax horsepower formulae above, it was calculated based on the overall engine displacement
Engine displacement is the measure of the cylinder volume swept by all of the pistons of a piston engine, excluding the combustion chambers. It is commonly used as an expression of an engine's size, and by extension as a loose indicator of the ...
from its implementation.
The German formula applied a higher tax horse-power factor to two stroke engine
A two-stroke (or two-stroke cycle) engine is a type of internal combustion engine that completes a power cycle with two strokes (up and down movements) of the piston during one power cycle, this power cycle being completed in one revolution of t ...
cars than to four-stroke engined cars based on the fact each cylinder in a two-stroke engine fires (has a power stroke) every revolution whereas an Otto cycle
An Otto cycle is an idealized thermodynamic cycle that describes the functioning of a typical spark ignition piston engine. It is the thermodynamic cycle most commonly found in automobile engines.
The Otto cycle is a description of what happ ...
or four-stroke cylinder only fires every second revolution .
The formulae for calculating units of tax horsepower (''Steuer-PS'') were as follows:
four-stroke engined cars =
two-stroke engined cars =
where:
: = the number of cylinders
: = the diameter (or bore) of each cylinder
: = the stroke length of each cylinder
Incomplete fractions were rounded up to the nearest whole number so a four-stroke engined car of would end up designated as a 4 PS (or four horsepower) car for car tax purposes.
After April 1928, recognizing the logic of the linear relationship between tax horsepower and engine capacity, the authorities simply set car tax rates according to engine size for passenger cars. (For commercial vehicles vehicle tax became a function of vehicle weight.) Attempts to correlate new tax horsepower values with old ones result in small differences due to roundings used in the new formula which are, for most purposes, unimportant.
In 1933 the Hitler government came into power and identified the promotion of the auto industry as key to economic recovery: new cars purchased after April 1933 were no longer burdened by an annual car tax charge and German passenger car production surged from 41,727 in 1932 to 276,804 in 1938. Thereafter war and military defeat led to a change in car tax policy and after 1945 tax horse-power returned in West Germany, applying the 1928 formula, as a determinant of annual car tax on new cars purchased in or after 1945. However, the introduction of tax on road fuel in 1951 and progressive increases in fuel tax thereafter reduced the importance of annual car tax so that today far more of the tax on car ownership is collected via fuel taxes than via annual car tax.
Italy
Fiscal horsepower is still used in Italy for insurance purposes; it was formerly used also for car property taxation and it is based on engine displacement. Following the 1973 oil crisis
The 1973 oil crisis or first oil crisis began in October 1973 when the members of the Organization of Arab Petroleum Exporting Countries (OAPEC), led by Saudi Arabia, proclaimed an oil embargo. The embargo was targeted at nations that had supp ...
up until the 1990s, it was heavily imposed on vehicles with engines larger than 2,000 cc, prompting Italian car makers to fit turbocharger
In an internal combustion engine, a turbocharger (often called a turbo) is a forced induction device that is powered by the flow of exhaust gases. It uses this energy to compress the intake gas, forcing more air into the engine in order to pro ...
s for extra power without enlarging the displacement.
Spain
Fiscal horsepower also lives on in Spain, but is defined simply in terms of overall engine capacity. It therefore encourages small engines, but does not influence the ratio of cylinder bore to stroke. The current Spanish definition does, however, add a factor that varies in order to favour four-stroke engines over two-stroke engines.
:
where:
: = Tax Horsepower (''Potencia fiscal''),
: = 0.08 for four-stroke engines, 0.11 for two-stroke engines,
: = cylinder bore in centimeters,
: = stroke length in centimeters,
: = Number of cylinders
Switzerland
The 26 cantons of Switzerland used (and use) a variety of different taxation methods. Originally, all of Switzerland used the tax horsepower, calculated as follows:
:
where:
: = the number of cylinders,
: = the diameter (or bore) of the cylinder in cm,
: = the piston stroke in cm
or times engine displacement
Engine displacement is the measure of the cylinder volume swept by all of the pistons of a piston engine, excluding the combustion chambers. It is commonly used as an expression of an engine's size, and by extension as a loose indicator of the ...
in cc
The limits between the horsepower denominations were drawn at either 0.49, 0.50, or 0.51 in different cantons. Thus, the eight horsepower category would cover cars of about 7.5–8.5 CV. In 1973 Berne switched to a taxation system based on vehicle weight, and a few other cantons followed. In 1986 Ticino
Ticino (), sometimes Tessin (), officially the Republic and Canton of Ticino or less formally the Canton of Ticino,, informally ''Canton Ticino'' ; lmo, Canton Tesin ; german: Kanton Tessin ; french: Canton du Tessin ; rm, Chantun dal Tessin . ...
switched to a system based on a calculation including engine size and weight. Nonetheless, the tax horsepower system remained in effect for seven cantons . However, , although quite likely earlier, Geneva is the only canton to still base road tax purely on tax horsepower. The plethora of different taxation systems has contributed to there always being an uncommonly wide variety of different cars marketed in Switzerland.
Japan
In pre-war Japan, different prefectures had different automobile tax structures. Tokyo Prefecture
Tokyo (; ja, 東京, , ), officially the Tokyo Metropolis ( ja, 東京都, label=none, ), is the capital and List of cities in Japan, largest city of Japan. Formerly known as Edo, its metropolitan area () is the most populous in the world, ...
was naturally the strictest, due to the population and vehicle density there, and used a tax horsepower system of their own devising:
:
where
: = the diameter (or bore) of the cylinder in inches,
: = the piston stroke in inches,
: = the number of cylinders
Unlike the British system, the Tokyo system favored short-stroked engines, but since the tax categories were rather wide and only represented a portion of vehicle taxes it had less impact on sales. In 1950 new legislation was passed that taxed engine displacement in 500 cc increments. The automobile tax is paid every year during the road tax
Road tax, known by various names around the world, is a tax which has to be paid on, or included with, a motorised vehicle to use it on a public road.
National implementations Australia
All states and territories require an annual vehicle registra ...
obligation.
Impact on engine design and on auto-industry development
The fiscal benefits of reduced cylinder diameters (bore) in favor of longer cylinders (stroke) in Britain and Ireland may have been a factor in encouraging the proliferation of relatively small six-cylinder-engined models appearing in Europe in the 1930s, as the market began to open up for faster middle-weight models.[ The system clearly perpetuated side-valve engines in countries where the taxation system encouraged these engine designs, and delayed the adoption of ]overhead valve engine
An overhead valve (OHV) engine, sometimes called a ''pushrod engine'', is a piston engine whose valves are located in the cylinder head above the combustion chamber. This contrasts with earlier flathead engines, where the valves were located bel ...
s because the small cylinder diameter reduced the space available for overhead valves and the lengthy combustion chamber in any case reduced their potential for improving combustion efficiency.
Another effect was to make it very expensive to run cars imported from countries where there was no fiscal incentive to minimise cylinder diameters: this may have limited car imports from the US to Europe during a period when western governments were employing naked protectionist policies in response to economic depression, and thereby encouraged US auto-makers wishing to exploit the European auto-markets to set up their own dedicated subsidiary plants in the larger European markets.
Taxation can modify incentives and tax horsepower is no exception. Large capacity (displacement) engines are penalized, so engineers working where engine capacity is taxed are encouraged to minimize capacity. This rarely happened in the US, where license plate fees, even adjusted for horsepower ratings, were comparatively much lower than European car taxes.
References
* This entry incorporates information from the equivalent entry in the French Wikipedia at 31 December 2009
* This entry incorporates information from the equivalent entry in the Spanish Wikipedia at 31 December 2009
{{DEFAULTSORT:Tax Horsepower
Vehicle taxes
Units of power
History of taxation