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Nissan Leaf
Washington is looking to recoup lost revenue from EV drivers

Owners of electric vehicles like the Nissan Leaf (100-mile driving range) and the Tesla Roadster (211-mile driving range) have the advantage of traveling on America's roads without having to spend a penny on gasoline. And even though the Chevrolet Volt uses a gasoline engine when its battery pack is exhausted, some drivers have managed to average 1,000 miles between gas stops.

The State of Washington, however, isn't too keen on EV drivers skirting the state's gas tax, which helps to maintain the roads that EV drivers travel on every day. According to the Associated Press, Washington has a $5 billion dollar deficit, and hitting the pockets of EV owners is just one way to help close the gap. 

Washington's gas excise tax is one of the highest in the nation at 49.4 cents per gallon [PDF] -- 31 cents of the total is from the state, while the federal tax is 18.4 cents. Assuming that the average driver travels about 12,000 miles per year, a Nissan Leaf driver (EPA rated 99 mpg) would only be skipping out on $38 of the state's portion of gasoline excise tax. For a Chevrolet Volt driver (EPA rated 93 mpg on battery power), the tax revenue lost by the state would amount to $40.

Washington's proposed EV fee, however, would amount to $100 per year.

"Electric vehicles put just as much wear and tear on our roads as gas vehicles,” explained the bill's sponsor, Democratic state Sen. Mary Margaret Haugen. "This simply ensures that they contribute their fair share to the upkeep of our roads." 

"So the question is how do you account for those trends and begin to capture revenue that reflects the actual usage of the road?" said Republican state senator Dan Swecker. "Our state doesn't change very fast. But we thought the $100 fee was a place to start, so let's start there." 

Not surprisingly, EV owners aren't exactly thrilled with this proposed legislation. "The Legislature saw electric vehicles are coming and thought, why not just put a fee on them," quipped Dean West, a Nissan Leaf driver.



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Ridiculous.
By jensend on 4/25/2011 8:40:32 PM , Rating: 3
Yes, it's true that if EVs become a significant enough part of the whole traffic equation then states will need to find other ways to raise revenue for transportation infrastructure. But we shouldn't forget that a large part of the reason for the gas tax is as a way to discourage excessive fuel usage. In econ terms, the gas tax is to a large extent Pigouvian- it's there to try to correct for an externality (pollution).

We can complain about the MPG of automakers' fleets all we want, and we can keep throwing extra regulations at them, but trying to force them one direction while the market demand pulls them another direction doesn't make sense; we have to change peoples' preferences. Indeed, if auto manufacturers were to magically double their fleets' MPG, people would drive enough additional miles that the environmental benefit would likely be small and the main effect would be that the roads would be more clogged and require more maintenance.

The only thing that will actually bring people to make environmentally wise decisions about purchasing and using cars is giving them incentives to do so. The gas tax is a good way to do that- famous conservative economist N. Gregory Mankiw estimates that the gas taxes nationwide are about $1/gallon lower than the social optimum. Throwing extra fees at EV owners defeats this purpose of a gas tax and will make it so fewer people go electric than would be best for society.




RE: Ridiculous.
By krazyderek on 4/26/2011 7:28:26 AM , Rating: 2
Agreed!


RE: Ridiculous.
By Spuke on 4/26/2011 1:01:02 PM , Rating: 1
quote:
Throwing extra fees at EV owners defeats this purpose of a gas tax and will make it so fewer people go electric than would be best for society.
I guess you didn't read anything in this thread. Gas taxes are for road maintenance not for getting people to use fuel efficient cars. A separate tax should be enacted for that purpose.


RE: Ridiculous.
By jensend on 4/26/2011 11:14:17 PM , Rating: 2
Hah. As though reading what the best and brightest minds in economics have to say about the subject leaves me uninformed but if I read the scribblings of random internet fora dwellers I would be enlightened.

It's true that the gas tax is normally earmarked for transportation, but unless the earmark is causing more spending on transportation than we'd spend if the gas tax money went into the general funds, there's no functional difference- all that matters as far as that goes is that the government takes in $X in total revenue and spends a total of $Y. Since transportation spending is almost always more than the state gets from the gas tax, there would be no change if all the gas tax money went to education and transportation was entirely funded from income taxes etc. So it's pointless to say "Gas taxes are for road maintenance"- rather, all taxes are "for" raising general government revenue.

All taxes also change people's incentives and behavior, and most taxes- the gas tax included- are designed with this in mind. If using gas emitted no pollutants, we wouldn't tax gasoline nearly as much as we do.

An EV tax would only raise a minuscule amount of revenue and it distorts people's incentives in a way that would hurt society. There are better ways to raise revenue.


RE: Ridiculous.
By JediJeb on 4/27/2011 5:34:21 PM , Rating: 2
quote:
The only thing that will actually bring people to make environmentally wise decisions about purchasing and using cars is giving them incentives to do so. The gas tax is a good way to do that- famous conservative economist N. Gregory Mankiw estimates that the gas taxes nationwide are about $1/gallon lower than the social optimum. Throwing extra fees at EV owners defeats this purpose of a gas tax and will make it so fewer people go electric than would be best for society.


An even better incentive to give to people to get them to make environmentally wise purchasing choices is to get the technology for alternatives to the point they are naturally cheaper than the less environmentally harmful choices. Electricity is cheaper than gasoline, but the cars that use electricity are more expensive so people purchase gasoline powered cars. If you make the cars less expensive that run on electricity than the ones that run on gasoline( and not by taxing or subsidizing but by making them less expensive to manufacture) then people will purchase the electric cars instead of gasoline powered ones.


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