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American lawmakers can't make up their mind about how best to meddle in the market

Gas taxes have long been a stable source of revenue for states.  In Feb. 1919 Oregon introduced the first gas tax -- $0.039 USD/gallon ($0.53 USD/gallon in 2014 dollars).  Since then, every other state has jumped onboard.  Average rates have remained relatively unchanged, at around $0.315 USD/gallon, on average (state only).  At the federal level a smaller gas tax accounts for $25B USD in revenue -- 60 percent of which goes to federal highways, and 40 percent of which goes to federal budget earmarks (a notorious source of corruption).  The federal government in 1993 raised this tax to $0.184 USD/gallon in an effort to balance the budget and boost fuel efficiency.
 
Today you wind up paying, on average, roughly half a dollar in taxes to your state and federal government per gallon of fuel you buy.
 
But the federal government is worried.  After pushing so hard with ambitious Corporate Average Fuel Economy (CAFE) standard, the government is now wondering if it went to far, as soaring fuel economy sinks state tax revenues.

Vehicles like the Ford Fiesta can average 45 mpg on the highway even without hybrid tech
 
Kristina Egan, the director of Transportation for Massachusetts, is among those concerned.  Her group promotes large public transit projects, which are highly dependent on state and federal dollars.  She comments:
 
We are going to continue to rely on the gas tax for quite a while to maintain the safety of our roads and bridges.  But it is really important for us to start exploring sources to supplement the gas tax as cars become more fuel-efficient.
 
Between this year and 2040, annual sales of hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEV), and battery electric vehicles (BEVs) are expected to double in the New England area, according to projections by the U.S. Energy Information Administration (EIA).
 
The effects of that increase have already been felt.  A Dec. 2013 report by the U.S. Environmental Protection Agency (EPA) brought bittersweet news.  Between 2004 and 2012, high oil prices and federal regulation helped to increase the average fuel economy of American vehicles by 22 percent.  The downside, of course, is that effectively amounts to a 22 percent decline in tax revenue.


President Obama's "test drive" of a Chevrolet Volt plug-in hybrid back in 2010. [Image Source: AP]
 
Jeffrey Mullan, a former Obama administration Secretary of the U.S. Department of Transportation (DOT) between 2009 and 2012, says that states are eyeing tolls to restore revenues.  He comments:
 
We need to develop a new proxy, and for me, the easiest and most useful option — and the one users are more familiar with — is tolling.  I predict we will see more tolling as a solution — partly because people are familiar with it, but also because states are beginning to take matters into their own hands.  They’re relying less on federal resources to finance their own programs.
 
The Massachusetts and Chicago turnpikes are among the most highly trafficked highways to feature high tolls.  While critics fear that increasing tolls and rolling back restrictions on interstate tolling could raise the cost of products -- due to higher truck delivery costs -- the movement has some high-profile backers.  Last month, President Barack Obama joined the list of supporters for rolling back federal restrictions on interstate tolling.
 
If tolling is the Democratic National Party's answer to falling gas tax revenues, fees on EVs and hybrids is another prospect being explored by the Republican National Party.  Massachusetts State Rep. Bradley H. Jones, Jr. (R), introduced an amendment to a bill which would have charged an additional $100 USD registration fee [PDF] on electric vehicles.  The amendment was struck down, as even Rep. Jones' party colleagues were skittish about appearing to punitive towards "green" vehicles in an election year.


Some have called for taking on extra fees for electric vehicles like the Tesla Model S
 
Rep. Jones defends the plan, though, calling it a natural development, explaining:
 
That person who switches to an all-electronic vehicle, they’re paying nothing for the benefit of the upkeep, maintenance, and filling of potholes on the roads.  The issue is really one of equity.  Eventually, you’ve got to have that discussion.  If everybody ultimately switches over to electric cars, what would you do?
 
Barbara Anderson, the executive director of Marblehead, Mass. advocacy Citizens for Limited Taxation, was moderately supportive of the idea despite the fact that it represented more regulation and fees -- something her group typically opposes.  She states:
 
I think there’s a balance you have to strike.  We want to have an incentive for people to buy cleaner cars. But we don’t want that incentive to be so much that only people who are using gas are paying for roads and bridges.
 
Some states are going for a more overt option -- simply increasing gas taxes.  But that raises the risk of a backlash.  In Massachusetts, the gas tax was raised for the first time in two decades from $0.21 USD/gallon to $0.24 USD/gallon.  The hike led to much public outcry.  Some have advocated scrapping the gas tax entirely.  A local petition gathered 100,000 signatures -- enough to put the question on the ballot for Massachusetts’ voters this fall.  Now Massachusetts state officials have to deal with the possibility that they could soon have no gas taxes, losing what was before the increase a $677M USD revenue source.


[Image Source: Ocala Post]
 
A final solution that some Republicans and Democrats are considering as a way to "Trojan horse" EV taxes into the system is to offer mileage taxes.  Such taxes could still target vehicles like hybrids, and could also charge gas vehicles at a high rate, when all the numbers are crunched.  Oregon is on the eve of a trial program with 5,000 volunteers whose cars will be GPS-tracked in order to calculate an annual tax bill.  The volunteer test kicks off next year.
 
Mr. Mullan isn't so sure that idea would work, though.  He warns:
 
The reaction is often, 'Why do I have to pay more? Don’t punish me.'  New things are difficult to implement, especially when people are just not 100 percent certain of it.
 
By the sound of it no one can quite agree on how to handle the revenue crisis created by rising fuel economy.  Or in other words, this has been another federal edition of "be careful what you wish for."

Source: Boston Globe



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Fuel Economy?
By Reclaimer77 on 6/2/2014 5:55:31 PM , Rating: 5
Yeah I don't think so. We have an economy in the crapper, gas prices are sky high so people are driving less, and we have millions of people still out of work and NOT driving every day.

I want to see some proof that rising fuel economy all of a sudden is causing a budget crisis, before I'll accept new taxes.

This is just a pretense for squeezing even more lifeblood out of the population, before this whole budget crisis implodes and takes us all with it. And it's REALLY scary when the Republicans and Democrats are finding ways to agree on tax increases. That can't be good for anyone.

Revenues down? Do like everyone ELSE has to do, and SPEND LESS!!!!




RE: Fuel Economy?
By Shig on 6/2/2014 6:02:34 PM , Rating: 1
The economy isn't in the crapper, the Dow is setting records. Corporate profits are at all time highs, yet things don't seem to be trickling down.


RE: Fuel Economy?
By Reclaimer77 on 6/2/2014 6:33:51 PM , Rating: 5
LMAO yeah no sh*t, the Fed is pouring billions and billions every month into the stock market. Of course it's looking good!

Look at Main street, not Wall Street. Things look a bit different.


RE: Fuel Economy?
By BansheeX on 6/2/2014 10:43:23 PM , Rating: 5
Indeed. Not only is the FED buying up tons of government debt and bad mortgages still, interest rates have been at 0% for a LONG time. Interest rates are very important for generating savings from which real loans come. They're also important in making sure that loans go to the people who are the most likely to increase production and pay it back (businesses). Right now, a bulk of the credit is going to spending: student loans, house loans, car loans, basically everything that isn't a factory. Meanwhile, our enormous trade deficits widen and we continue to import everything on borrowed money so that even more of our future tax revenue will be squandered on interest.


RE: Fuel Economy?
By FITCamaro on 6/3/2014 9:57:49 AM , Rating: 4
$60 billion a month to be exact.


RE: Fuel Economy?
By TSS on 6/2/2014 8:35:53 PM , Rating: 2
Ahh.. yknow what instead of another long winded economics post ima just say, play with google a little if you really think that.

As for gasoline, MPG might've gone up but barrels of gasoline consumed has only dropped since mid summer 2007, it was down 5,5% end of last year (up a little from 2012). Considering a 14,3% inflation during the same period and it'd might account alot more for why the lawmakers are worrying about gas taxes, rather then EV's. If the market for cars stays the same size but EV+hybrid sales double it'd still be only 6% of total by 2040. Not exactly something to worry about.


RE: Fuel Economy?
By overlandpark on 6/2/14, Rating: -1
RE: Fuel Economy?
RE: Fuel Economy?
By KCjoker on 6/3/2014 6:20:17 PM , Rating: 2
You've obviously never heard of Quantitative easing then.


RE: Fuel Economy?
By sorry dog on 6/8/2014 1:27:53 PM , Rating: 2
QE is A.K.A. printing money.

Printing money = inflation since it devalues existing money.... Yet gov't says inflation is close to 0 and says they are worried about deflation.

Either some kind of new economics is going on or at least economic reporting is being distorted...

I'm leaning to the latter to explain QE vs. no inflation dilemma.


RE: Fuel Economy?
By frakkel on 6/2/2014 6:07:27 PM , Rating: 3
The last comment was probably the only thing that matters.

People should use only for what they could afford nothing more. What we have been seeing around the globe is that people are using money that they dont have. This is the reason to why we have this so called crisis.


RE: Fuel Economy?
By NellyFromMA on 6/3/2014 7:56:12 AM , Rating: 2
Spending is fun on someone else's tab.


RE: Fuel Economy?
By amanojaku on 6/2/2014 6:21:12 PM , Rating: 5
First of all, I'm not sure how Jason got the federal government mixed up in this. It's the STATES that are proposing these taxes.

And there is no crisis yet. The states are worried that EVs will CREATE a crisis due to reduced gas consumption. So the goal is to preempt expected loses. The rationale is that gas taxes pay for roads and other infrastructure, so EV and hybrid drivers aren't paying their fair share. That may be true in the future, but today there is no crisis and there is no nation-wide effort to raise the gas tax.


RE: Fuel Economy?
By stm1185 on 6/2/2014 6:45:00 PM , Rating: 2
With the rise of electronics maybe they just make an energy tax.


RE: Fuel Economy?
By Nutzo on 6/2/2014 6:49:21 PM , Rating: 2
Huge difference between Hybrid and EV's

An EV like the Nissan Leaf is paying no gas taxes, ant the buyers even get a huge tax rebate when they bought it.

A plugin Hybrid (like the Volt) might be paying some gas taxes depending on if they take longer drives.

A Hybrid DOES pay gas taxes. For example, a 4 cyl Camry XLE is rated 35 MPH highway, the Camry Hybrid XLE is rated at 38MPG Highway, not much of a differnce. There are some 4 cyl and disels rated at over 40 MPG, so I don't see a real need to charge extra taxes on Hybrid.

For the people who point out that Hybrids get much better mileage in town, you need to realize that the state gas taxes pays for HIGHWAYS, not the local city roads. Local roads are general paid for by local property taxes.

If they are so worried about tax revinue, why don't they drop the huge tax rebates for electric cars? If that's not enough, then add a fee/tax to the registration of any car that plugs in (EV or plugin Hybrid) based on the size of the battery?


RE: Fuel Economy?
By Mint on 6/2/2014 7:27:52 PM , Rating: 2
We need a better highway revenue system period.

Light duty vehicles do far, far less road damage per gallon than an 18-wheeler. There are gobs of studies about this. Technology is much better now at registering vehicles and tracking mileage, so we can do much better.

Charging taxes on EVs to match gas car revenue is like putting more white people behind bars for recreational drug use to match rates of minorities. It's only "fair" in the stupidest sense of the word.


RE: Fuel Economy?
By Reclaimer77 on 6/2/2014 7:53:32 PM , Rating: 3
Last time I checked EV's use the roads, so umm yeah, they need to be taxed like everyone else. And it's going to take more than a racist analogy to say otherwise.

As for a better highway revenue system, hey, I have a radical idea:

1. Take the money collected for the highways.
2. Actually USE that money FOR the goddamn highways.

Problem solved.

*drops mic on stage*


RE: Fuel Economy?
By amanojaku on 6/2/2014 8:16:46 PM , Rating: 3
I think Mint was saying that putting people in jail for recreational drug use is stupid, and that minorities are unfairly jailed for drug possession. Therefore, the fair solution would not be to imprison more white recreational drug users, but to stop arresting people for non-violent recreational use.

It's not a racist analogy, because statistics show that minorities ARE unfairly jailed for minor drug offenses and receive harsher sentences than whites. This is one reason why people are constantly calling for prison reform, because the number of non-violent criminals in prison is bankrupting the states and leading to more crime. Prisoners don't pay for themselves, and people with criminal records have a hard time finding jobs, leading many return to their previous actions or worse.

Back to cars... 18-wheelers do significantly more damage to roads than passenger cars, but there's no point in taxing them more. They work for businesses who pay significant sums in taxes already, and there are less 18-wheelers on the roads than there are passenger cars. EV and hybrid owners should pay an equivalent tax to replace the gas they don't use. The point isn't the gas, it's the roads, and those drivers are using them just like everyone else.


RE: Fuel Economy?
By StormyKnight on 6/3/2014 1:21:31 AM , Rating: 2
quote:
Back to cars... 18-wheelers do significantly more damage to roads than passenger cars, but there's no point in taxing them more. They work for businesses who pay significant sums in taxes already, and there are less 18-wheelers on the roads than there are passenger cars. EV and hybrid owners should pay an equivalent tax to replace the gas they don't use. The point isn't the gas, it's the roads, and those drivers are using them just like everyone else.


http://truecostblog.com/2009/06/02/the-hidden-truc...


RE: Fuel Economy?
By Mint on 6/3/2014 1:59:48 AM , Rating: 1
Thank you for explaining to Reclaimer my simple analogy.

But you're wrong about not wanting to tax 18-wheelers. If they're responsible for most road damage, then they should pay for it. What businesses pay in other taxes is an orthogonal issue. More importantly, if one company's shipping ruins the roads 100x as much as another, it should pay 100x as much in road taxes. It shouldn't be spread evenly among all companies, or among light duty drivers.


RE: Fuel Economy?
By amanojaku on 6/3/2014 1:58:55 PM , Rating: 2
For you and StormyKnight (and everyone else, obviously):

The truecostblog link is unreliable. None of the links he has work anymore, so you only have his numbers to go by. And he's an unknown without any references, so who knows if his information is accurate and his conclusions valid. After all, he just performed a bunch of paper exercises without retrieving actual data.

Here's what I found from the Federal Highway Administration:
quote:
Based on the findings of the American Association of State Highway Officials (AASHO) road test, damage caused by heavy trucks was long thought to increase with approximately the fourth power of the axle load. This means that one axle of 10 tons on a heavy truck was 160,000 times more damaging to a road surface than an axle of 0.5 tons (car scale).

In recent years, however, it was determined that the relationship between axle weights and pavement damage is complex and varies based on numerous variables, including environmental factors, type of terrain and roadway design. The National Pavement Cost Model (NAPCOM), which is the pavement model currently used by FHWA, estimates that for some types of pavement deterioration, doubling the axle load causes 15 to 20 times as much damage; for other types of deterioration, doubling the load only doubles the damage.

The U.S. Department of Transportation in its most recent Highway Cost Allocation Study estimated that light single-unit trucks, operating at less than 25,000 pounds, pay 150 percent of their road costs while the heaviest tractor-trailer combination trucks, weighing over 100,000 pounds, pay only 50 percent of their road costs.
http://www.fhwa.dot.gov/policy/091116/03.htm

Table 2 from the following link shows that the largest trucks pay between 50% and 60% of their total highway cost (including road damage) in taxes and fees (equity ratio). Who's picking up the rest? Not small cars (equity ratio of 100%) - it's vans, SUVs, and light trucks (check figure 5 for a graphical comparison of equity ratios).

http://www.fhwa.dot.gov/publications/publicroads/9...


RE: Fuel Economy?
By Mint on 6/3/2014 2:59:33 PM , Rating: 2
Good find. Ideally I'd like a little more detail about how the cost allocation was broken down, and certainly would like more recent data given that driving habits have changed, but in the meantime I'll withdraw my claim.

From that data, cars do indeed have a large share of road cost, and EV road taxes makes sense.


RE: Fuel Economy?
By JediJeb on 6/4/2014 12:07:12 AM , Rating: 2
Another question is how many other taxes do the trucks pay that most vehicles don't. They pay excise taxes on 18 tires instead of just 4 for example and the tax on their tires is at a higher percentage than those for light cars. I have family who are owner/operators and the taxes and fees they pay is unbelievable.


RE: Fuel Economy?
By Solandri on 6/4/2014 3:03:32 PM , Rating: 2
Truck tires, in addition to being bigger, are typically inflated to 80-120 psi, vs 30-45 psi for car tires. So even if trucks are paying an excise tax per tire, they're still paying less per pound of road loading than passenger car tires.

e.g. A 3500 pound passenger car is putting 875 pounds of load per tire onto the road. An unloaded semi truck and trailer is about 32000 pounds, which divided over 18 wheels is 1778 pounds per tire. Fully loaded it can hit about 80,000 pounds (40 tons), or about 4444 pounds per tire. By this math, not only should the truck be paying an excise tax on all 18 tires (vs 4 for the car), its excise tax per tire should be about 5x higher than the car's.

Given some of the traffic flow problems I've seen in Los Angeles, I actually think it makes sense to create dedicated truck highways in urban and suburban areas, funded entirely by taxes on trucks.


RE: Fuel Economy?
By Reclaimer77 on 6/4/2014 4:52:00 PM , Rating: 3
Yeah lets increase the costs of shipping through higher trucking taxes. Because that TOTALLY wont screw over everyone...


RE: Fuel Economy?
By Spuke on 6/4/2014 12:35:57 PM , Rating: 2
quote:
*drops mic on stage*
ROFLMAO!!!


RE: Fuel Economy?
By thesaxophonist on 6/4/2014 9:27:05 PM , Rating: 2
quote:
For example, a 4 cyl Camry XLE is rated 35 MPH highway,
Really lives up to Toyota's reputation, doesn't it? Snide remarks aside, you're right. Just drop the tax rebates. I don't think a special fee on EVs is fair, but they shouldn't get any special treatment the other way, either.


RE: Fuel Economy?
By FITCamaro on 6/2/2014 8:27:21 PM , Rating: 2
Well speaking truthfully, there isn't any reason that electrics shouldn't pay some tax since they're not buying gas. Those taxes exist to pay for roads. Either get rid of the taxes and make it up in other ways (sales tax) that effects everyone equally, or electric vehicle drivers should have to pay in some way for the road wear they cause. Not get to drive on them for free at the cost of everyone else.

At the state level there is nothing wrong with this. The federal government should get out of all road projects though other than the interstates at most. But honestly I'd be for them getting out of that as well. As I've said before, the interstates serve a military purpose so I'm not against the federal government being involved with them. But that's where their influence should be strictly limited. No more federally subsidized state transportation projects that only benefit commuters of a state.


RE: Fuel Economy?
By FITCamaro on 6/2/2014 8:29:42 PM , Rating: 2
And let me say that I'm most for getting rid of gas taxes and making it up through sales taxes. It's the only fair way to tax everyone. Otherwise you have to employ a complicated system where gas vehicles just pay the gas tax, hybrids pay the gas tax plus a small fee, plugins pay gas tax plus a slightly higher fee, and electrics pay the highest fee since they use no gas.


RE: Fuel Economy?
By FITCamaro on 6/2/2014 8:53:29 PM , Rating: 3
And yes I agree that a big part of the reason revenues are down is because of the pathetic work force participation rate. When you have no money, you drive less.


RE: Fuel Economy?
By retrospooty on 6/2/2014 9:28:52 PM , Rating: 3
"Revenues down? Do like everyone ELSE has to do, and SPEND LESS"

+1. It sounds perfect. It seems simple, no, I take that back it doesn't "seem" simple, it IS simple... Why in the F$%K is it so hard for the govt. to grasp? The 100b deficits of 30 years ago didnt raise an eyebrow. When we broke 250b and 500b it was just another milestone. Now its 1 trillion and still they refuse to cut with even a shallow blade. WTF?


RE: Fuel Economy?
By stimudent on 6/3/2014 12:51:59 AM , Rating: 2
The politicians are just going to have to find new ways to screw the average citizen.


Mileage Tax
By Spookster on 6/2/2014 6:03:50 PM , Rating: 2
A mileage tax makes far more sense to pay for road maintenance and related projects. The more you use it the more you pay to help keep it maintained. The question would be how could that officially be tracked for tax purposes that's not going to require some tech device be installed in the car to track it? I suppose at least for states that require annual vehicle safety inspections it could be captured as part of the inspection but would need something for the rest of the states that don't do that.




RE: Mileage Tax
By MozeeToby on 6/2/2014 6:26:23 PM , Rating: 2
Without including axle weight in the calculation a mileage tax is wildly unfair. Road wear is a function of axle weight to the fourth power, increase the weight by 2 and you increase road wear by 16 times. Comparing a semi (45,000 lbs over 5 axles) to a typical sedan (4,000 lbs over 2 axles) equals the semi producing over 400 times more wear and tear per mile (which, incidentally, makes even the current gas taxes wildly unfair in a purely wear and tear based model).

Of course, there is also some natural wear that occurs over time as well; ground freezing and thawing, other weather, clearing roads of snow and debris, etc. Therefore, the most fair way to go about it would be a flat yearly tax as part of vehicle registration (to account approximately for the natural wear and tear) and a mileage * axle weight ^ 4 tax to account for the usage wear. Just have people self report mileage and verify it either randomly with audits or ever X years at registration time (and have the a reminder on the title to have buyer and seller verify it when the car changes hands).


RE: Mileage Tax
By esteinbr on 6/2/2014 6:48:43 PM , Rating: 2
The current gas tax is already a poor approximation of a mileage tax so actually going to a mileage tax wouldn't be any worse. In the past it worked well enough but more efficient and electric vehicle will cause problems as they do break the already poor approximation. It isn't a huge problem yet due to the low number of electric vehicles but it is already having an impact.

The issue is the actual implementation. Both the practical, how do we measure miles to tax and validate that, and the political, how do we convince people this actually makes sense and isn't just another money grab. My state has talked about trialing a on car gps device for tracking mileage for something like this but I don't think they've actually even started the trials.

I'd prefer they actually be forward thinking about this and implement a new system before our roads fall into even worse disrepair due to lack of funds to maintain them.


RE: Mileage Tax
By Nightbird321 on 6/2/2014 6:59:40 PM , Rating: 2
Mileage tax just encourages faking odometer readings. Gas tax is meant as a proxy for mileage*vehicle weight tax. More miles or heavier vehicle=more taxes, and you can't fake the amount of gas you buy.

If gas vehicles are more efficient today, and we want the correct proxy to get tax to build/fix roads, there really isn't any option other than increase tax: Use 20% less gas >> increase tax per gallon by 25%. Consumer pays same tax towards roads but less for the gas itself = savings.

Pure EV is where the issue is at, which may end up being a one time tax at purchase which would make them less appealing.


RE: Mileage Tax
By Spookster on 6/3/2014 1:05:53 PM , Rating: 2
Tampering with the odometer is already against Federal and State laws so go ahead and tamper with it. If you get caught you'll pay way more in Federal and State fines, increased insurance premiums, attorneys fees and a whole slew of other costs.


RE: Mileage Tax
By FITCamaro on 6/3/2014 3:28:16 PM , Rating: 2
That only punishes everyone without a hybrid. They're paying a disproportionate share of the costs since a hybrid isn't really wearing the road any less than a non-hybrid of similar size and weight.

A 2013 Prius weighs a little over 3000 pounds
A 1.8L Chevy Cruze weighs pretty much exactly the same.

But you're saying the Cruze should pay more to drive on the road than the Prius. Which it currently still does.


RE: Mileage Tax
By Nutzo on 6/3/2014 4:08:06 PM , Rating: 2
The Cruze Eco, with the turbo 1.4-liter, is rated at 42MPG Highway. The Prius is rated at 48MPG on the highway.

Based on 15K miles, the difference would be around 45 gallons. At a gas tax of $.40/gallon (not including sales tax as that doesn't go directly to the roads). that means the Pruis Hybrid driver pays around $18 less in gas taxes for the year. Someone driving an all electric Nissan leaf would be avoiding around $140 in gas taxes (assuming a gas version would get the same mileage as the Cruze Eco).

It's not worth complicating things to try an collect an extra $18/year from someone driving a Prius. It's the all electic that's getting a free ride, and should probably have yearly tax added to the registration (mayby $100 for a small car like the Leaf, and $200 for something larger like the Tesla)
That would be alot simpler that a mileage tax.

If the state would quit stealing the gas tax money, and instead use it just for the roads, I doubt we would need more taxes. However, if we do, then they should just raise the gas tax a few cents. that would have the added incentive for people to buy more efficent cars.


RE: Mileage Tax
By The Von Matrices on 6/2/2014 7:21:55 PM , Rating: 2
Unfortunately, even though it is the most logical and direct solution, there will be many privacy activists who will never let such a plan go through.

Why not tax tires instead of gas? As far as I know, EVs still need tires, and tire wear should be proportional to road wear. You can tax tires based upon their life expectancy and the vehicle type that they are fitted upon. If you wear out the tire in fewer miles than its life expectancy, you likely had a heavier vehicle that would have put more wear on the road anyway and so it balances itself out in that you will need to buy new tires and pay more tire taxes for road maintenance.


RE: Mileage Tax
By Schrag4 on 6/3/2014 12:39:18 PM , Rating: 2
quote:
Why not tax tires instead of gas? As far as I know, EVs still need tires, and tire wear should be proportional to road wear.


Off the top of my head, tires aren't always replaced because they have worn out. If someone slashes your tires you would end up paying extra road usage taxes. If you give an exemption for tires that are damaged in some way other than normal wear, then people will simply damage their tires when it's time to replace them. Then you have to hire people to inspect the old tires to check the level of wear and report it...sounds like a whole lot of red tape and govt intrusion where it doesn't belong.


RE: Mileage Tax
By The Von Matrices on 6/3/2014 3:15:29 PM , Rating: 2
The idea of an exemption for certain scenarios is silly. Tires fail prematurely due primarily to two reasons: manufacturing defects and road hazards. Manufacturing defects should already be covered by the manufacturer's warranty. Road hazards (e.g. punctures and pot holes causing damage) already aren't covered by anyone, so why should there be a tax refund?

With tire taxes, you don't need anyone to monitor wear. You only pay the tax when you buy a new tire. If you wear out your tires more frequently due to more driving or a heavier load, you pay more taxes. I don't see how people sabotaging their own tires would subvert the system.

In the event of someone slashing tires, that is vandalism and you should be prosecuting the person who performed it, not asking the government to refund you. When anything else is vandalized, the owners are still required to pay sales taxes on the replacement parts; there is no system for a government refund on taxes paid. In the cause of a business you still could claim the new tires as capital expenditures counting against your profits and avoid taxes that way.


RE: Mileage Tax
By Schrag4 on 6/3/2014 5:36:26 PM , Rating: 3
I don't think you're quite understanding just how much you'd be paying in "road taxes" when you buy a new set of tires. If your new tires are supposed to last you 50k miles, and if the tire tax is supposed to replace gas taxes at 25MPG, averaging 50 cents/gallon, that's an additional $1000 road taxes tacked onto that set of tires. Are you telling me that you're willing to eat that cost if someone slashes your tires? You'd pay the $1000 road tax and then a month later pay the same $1000 road tax when you have to replace them after they've been slashed?


RE: Mileage Tax
By The Von Matrices on 6/4/2014 12:01:13 AM , Rating: 1
Yes, I think that's a better plan than the current gas tax system. At least EVs pay the tax as well. I support vehicle usage tracking, but since privacy advocates will never let it pass, tire taxes are the next best thing. If you can think of a better plan that taxes all vehicles fairly and would actually get passed, then I would like to know.

If your tires are getting constantly slashed, you need to better secure your vehicle and/or notify the police so that they can deal with the mischief. If you couldn't afford the repair of slashed tire(s) then you should also buy comprehensive insurance on your car to cover it getting vandalized.


RE: Mileage Tax
By Schrag4 on 6/4/2014 5:14:07 PM , Rating: 2
quote:
If you can think of a better plan that taxes all vehicles fairly and would actually get passed, then I would like to know.


You're assuming that changing from a relatively small tax paid very frequently to a massive tax paid very infrequently would pass as well. This would create major incentive for a black market for car tires.

quote:
If your tires are getting constantly slashed, you need to better secure your vehicle and/or notify the police so that they can deal with the mischief


I've never had my tires slashed, but I do recognize that it happens. It would suck to pay for new tires, but it would REALLY suck to pay 200-300% on top of that in additional road taxes. Your solution to tax new tires may be the best solution you can think of, but that doesn't mean it's not a horrible solution. I'm surprised that you still take the position that someone who paid for 50k miles in road usage taxes should pay for another 50k miles in road usage taxes just one month later if their tires get slashed.


RE: Mileage Tax
By sorry dog on 6/10/2014 7:26:10 PM , Rating: 2
I applaud the out of box thinking with a tire tax, but there are just too many differences in tire usage that really skew things. High performance tires are soft compound and don't last long, or some people drive infrequently and their tires dry rot before the tread is used. What about trailer tires? Motorcycle tires? Snow tires? What about re-treads on trucks? Off-road use tires?
The practicals issues here are numerous...


tax 18 wheelers not cars
By Chester999 on 6/2/14, Rating: 0
RE: tax 18 wheelers not cars
By Motoman on 6/2/2014 6:58:25 PM , Rating: 2
In case you haven't noticed, trucks pay massive amounts of taxes - both on their diesel at the pump, as well as at weigh stations.

Regular consumer vehicles, while individually causing vastly less wear on the infrastructure than trucks, almost infinitely outnumber the trucks. And regardless, we're all causing wear and tear anyway - and we all depend on that infrstructure. So we all need to pay for that infrastructure.

No free ride if you buy an EV. Unless you manage to make it hover over the roadway without exerting any downward force somehow.


RE: tax 18 wheelers not cars
By Mint on 6/3/2014 2:11:48 AM , Rating: 2
No, trucks don't pay enough taxes.

Stormy Knight above linked to this well-referenced article:
http://truecostblog.com/2009/06/02/the-hidden-truc...
18-wheelers are 11% of the vehicles on the road, but do 99%+ of the vehicle-caused damage. If you only pay 35% of the taxes, but cause 99% of the damage to be repaired by those taxes, then you are not paying your fair share.

The correct solution is not to increase taxes on EVs, but reduce taxes on cars, and shift them to trucks.


RE: tax 18 wheelers not cars
By 1prophet on 6/3/2014 8:08:12 AM , Rating: 2
quote:
The correct solution is not to increase taxes on EVs, but reduce taxes on cars, and shift them to trucks.


and in turn shift it to the end consumer that depends on the truck


RE: tax 18 wheelers not cars
By Masospaghetti on 6/3/2014 11:07:00 AM , Rating: 2
If trucks cause most of the road damage, then by all means tax them more. If taxes on trucking were increased, alternative methods of shipping become more economically viable, such as rail.

Or maybe there are ways to reduce the damage that trucks do to roads (better load distribution, etc), which might be explored if the trucking industry were actually paying for the damage its causing.

As it stands right now, we are all subsidizing trucking. It makes no sense.


RE: tax 18 wheelers not cars
By Bytre on 6/3/2014 2:11:16 PM , Rating: 2
Tax them all - EVs, small cars, hybrids, 18 wheelers. Tax 'em all, but proportional to the weight and distance.

The fact that the EV's pay nothing raises anger at the "unfairness of not paying their fair share". Proposing a $100 tax for an EV which causes very little road damage is similarly inappropriate. Tax them their fair share.

I am an EV driver.


RE: tax 18 wheelers not cars
By Motoman on 6/3/2014 4:02:10 PM , Rating: 2
quote:
The fact that the EV's pay nothing raises anger at the "unfairness of not paying their fair share". Proposing a $100 tax for an EV which causes very little road damage is similarly inappropriate. Tax them their fair share.


Tax them at the same rate that a similar ICE vehicle would be taxed at is what you're saying. You're right - a $100 per year tax is likely wildly inappropriate from that standpoint. Probably more like $1,000 a year.


Hey....
By jabber on 6/2/2014 7:48:58 PM , Rating: 2
...just tax the rich some more.

They CAN afford it. It's where all the money is going after all.




RE: Hey....
By Rob94hawk on 6/2/2014 9:11:25 PM , Rating: 4
How about start taxing the people that arent contributing as well like illegal immigrants? Billions in Medicaid and educational costs thanks to millions of anchor babies sucking the middle class dry!

Start taxing them and start taxing the rich more. It works both ways!


RE: Hey....
By lightfoot on 6/3/2014 4:12:32 PM , Rating: 3
quote:
...just tax the rich some more.

After all, it was our money before they earned it.

Why not just rob the banks? Same logic applies.


Energy Tax
By Sundervine on 6/2/2014 7:00:19 PM , Rating: 2
So you do not pay taxes on your household energy bill? Is that air you are breathing? huh




RE: Energy Tax
By Motoman on 6/2/2014 7:06:30 PM , Rating: 2
Electricity isn't taxed for the purpose of infrastructure maintenance. And granted that no one, statistically speaking, uses if for that purpose, it can't be.

Hence, there needs to be a different way to ensure that EV owners carry their fair share of the burden for infrastructure costs.


RE: Energy Tax
By Sundervine on 6/2/2014 7:14:28 PM , Rating: 2
Why? I mean none of the other tax money is ever used somewhere else right? Ever? Is there some reason why you cannot just move that over to infrastructure purposes?


RE: Energy Tax
By Motoman on 6/2/2014 11:23:18 PM , Rating: 2
If you massively increase the tax rate on it, sure. The problem being that the vast majority of people in the world *don't* use electricity to power their vehicles. So ramping up taxes on electricity would just punish the 99.999% even more.


Why change Gas Taxes?
By Solarserpent on 6/3/2014 12:53:49 PM , Rating: 2
If you want to guarantee that every driver pays for the roads then add on to the vehicle registration costs that happen every year (at least in my state its every year). Every car or motorcycle needs a valid license plate and registration sticker no matter what fuel it uses. Existing fees are already in place so the cost shouldn't be too bad to administer. And the fees can be higher for 18-wheelers that statistically cause more damage to the road per vehicle than others.




RE: Why change Gas Taxes?
By kamk44 on 6/3/2014 1:24:58 PM , Rating: 2
You still need to take into account something like mileage as a person who drives 3,000 a year should not pay the same as someone driving 15,000 a year.


just raise the taxes
By Murloc on 6/3/2014 4:11:48 PM , Rating: 2
The share of taxes in gas prices in the Turkish market is 72 percent, while by comparison it is 62 percent in Germany, 57 percent in Italy, 60 percent in Japan, 25 percent in Canada, and 12 percent in the USA.

Here's the problem.

US gas prices are very low and you just need to increase the taxes proportionally to the decrease of average gas consumption.

There's no need to find other creative taxes. Taxing gas also has the advantage of promoting fuel efficency and alternative means of transportation.




RE: just raise the taxes
By Litzner on 6/7/2014 1:00:30 AM , Rating: 2
Don't forget what America was founded on.

We went to war over taxes over tea and stamps...


By Concillian on 6/2/2014 6:08:09 PM , Rating: 2
Then tax them...

Maybe the government is learning from big corporations. Get their foot in the door with a low sticker, then make the money back by jacking up periodic fees.




Roads aren't free
By Motoman on 6/2/2014 6:13:31 PM , Rating: 2
quote:
American lawmakers can't make up their mind about how best to meddle in the market


Not really. At least, not if they were doing what they're supposed to be doing...

...fuel taxes are *supposed* to be used to pay for roads and transportation infrastructure. Naturally the de facto status is that lots of that revenue gets pulled to other BS that's unrelated to transportation - but that's what you get with a stupid populace that elects stupid people into offices that are essentially corrupt by definition, thanks to political parties and lobbying.

However...granted that the ostensible purpose of such taxes is to pay for such infrastructure, and granted that such infrastructure isn't free...those taxes are necessary. And if you have someone causing wear and tear on that infrastructure without paying their fair share for it's upkeep - you have to rectify that problem.

EVs and hybrids cause as much wear & tear on roads and bridges as any other vehicle. There's no possible argument in which those people should get a free ride, or a highly subsidized ride, on bearing the same burden everyone else does in terms of taxes to maintain those roads & bridges.

It may be that going forward, fuel taxes aren't the right way to do it. I'm not sure how, exactly, you could do it purely based on mileage without some kind of intrusion into privacy though. Or maybe fuel taxes work just fine for conventional vehicles, and some other mechanism entirely has to be put into place to accomodate EVs and hybrids. Maybe EVs pay $1,000 a year for a road-use tax, and hybrids pay $250 - just to pull something out of my a$s.

But to pretend that the government doesn't have any right to levy such taxes is simply asinine. No taxes, no roads. Who's going to pay the asphalt companies to make/repair roads? Or bridge builders, surveyors, so on and so forth? Reckon all of those people/companies should just donate their labor and equipment to the common good - and otherwise live off of food stamps?

One the one hand, sure...we need to address corruption in government, and if you say a tax is going to be used for a given purpose (transportation infrastructure) then it had better GD well be used for that purpose. But on the other hand, it is an absolute requirement for the government to levy and collect such taxes for such purposes. Unless you actually want to live in a socialist state of some kind.




This is all stupid
By Philippine Mango on 6/2/2014 11:52:57 PM , Rating: 2
If Electric Vehicles were common place 100 years ago and were common place today, how do you think they would have paid for the roads say 40 years ago? There was no GPS then and having odometer readings to assess road tax would be ripe for tampering.




Want it both ways.
By jabber on 6/3/2014 4:36:16 AM , Rating: 2
I remember when they brought in the congestion charging in the center of London in the 'hope of reducing the number of vehicles'. The powers that be reckoned that the numbers wouldn't drop and it would be a easy tax. Like shooting fish in a barrel.

But the numbers of cars etc. did drop quite drastically and then the powers that be were moaning that the system wasn't even bringing in enough money to pay for it.

They got caught out.




Contradiction
By wookie1 on 6/3/2014 12:43:04 PM , Rating: 2
"The federal government in 1993 raised this tax to $0.184 USD/gallon in an effort to balance the budget and boost fuel efficiency."

This is similar to the "sin" tax ideas. You can't have it both ways. If fuel efficiency is boosted, the budget won't be balanced anymore. The gov't always increases spending to match increased revenue + the maximum additional borrowing that they can arrange. If revenue goes down due to increased efficiency, there will be a defecit.




Net Neutrality corollary?
By ewhite06 on 6/3/2014 3:15:04 PM , Rating: 2
Think of it in terms of the Net Neutrality: The providers (Comcast, Verizon)want to charge the high-bandwidth users (Netflix, Amazon, etc.) more. But we all use the pipes. Using them right now. If Netflix & Verizon have to pay more to Comcast, the costs get passed down to us.

Now think of it in terms of the roads. All of us use the roads, but the trucks cause the most wear-and-tear (proven many times). So do we want to charge the trucks or diesel cars more? No. Because the shipping companies and such will just pass the extra costs onto the manufacturers/providers/businesses which in turn will come down to us. So it makes more sense for ALL OF US to pay a bit more in gas taxes that way the cost of everything else is not affected as much.

When the number of EV vehicles reaches a certain point, and gas tax revenues reach a lowered point, then the best option is for a larger tax when the vehicle is plated/registered. As state gas tax revenue goes down, the registration fees go up to balance out.




Wait a Second Here...
By Litzner on 6/3/2014 4:25:10 PM , Rating: 2
Government taxes gas to make money
Government pushes cafe standards to reduce US fuel usage
Government loses money due to improved fuel economy
Government looks to raise taxes to make more money

This seems like a vicious circle we are in that doesn't seem to benefit us too much... Oh, and don't forget, those cafe standards raise the price of automobiles by quite a bit. It really sounds like we are getting the shaft...




Damn whiners
By Dug on 6/4/2014 2:53:44 PM , Rating: 2
Oh no, some electric cars are causing a loss in tax revenue!

So do people that bike more or switch altogether.
So do people that can't afford to drive anymore.
Drug (alcohol) addicts that have lost their license.
People that have become mentally or physically disabled.
People that take public transit.

All of these have been increasing far more than electric car sales.




Here's what you do
By Dr. Kenneth Noisewater on 6/2/2014 10:39:31 PM , Rating: 1
1: Stop all raiding of gas tax and other highway revenues, segregate any such income to only road building, maintenance, and related infrastructure.
2: Once that's done, and there isn't enough $$, raise the gas tax.
3: Keep raising the gas tax until you bump up against the Laffer curve, where continued taxing brings _less_ revenue. I would bet this is in the $2-3/gal area.
4: Once you hit the Laffer curve, probably because of economization, upgrades, etc. then levy a per-mile tax that's based on odometer counts, which is comparable to, say, what a 60mpg vehicle would pay in gas tax. That would be over and above the existing gas tax, applied to all vehicles, so that gas vehicles would be double taxed (plus sales tax, depending on state).

Increasing the gas tax and using odometer counts would not require gov tracking devices or additional personnel to administer, the tax would be another fee based on an odometer reading made by the state or those the state authorizes to perform inspections. This would continue to incentivize the migration to newer (safer and more economical) vehicles as well as encourage the poor to take mass transit or carpool since it would make their (likely underinsured) jalopies too expensive to operate. It would also serve to reduce demand for gasoline, thus reducing its base price, as well as reducing the need for foreign intervention and dependency on shitbird regimes.

If it were up to me, I would want to see the price of minimum liability insurance priced into every gallon of gas, over and above road tax. That would mean no more uninsured drivers, and folks would pay for only the insurance they need: why should someone who drives 5000mi per year pay the same as someone who drives 20000mi per year? The risk profiles are certainly different. Comprehensive, Collision, additional coverage etc. would still be available, and the minimum liability would be bid out as a massive 'assigned risk' pool, with per-gallon tax adjusted annually as appropriate.




Politicians should be stoned
By overlandpark on 6/2/2014 10:54:39 PM , Rating: 1
until they die. It's outrageous. They tax us to death, force higher standards, then say well now it's costing us money. Go f*ck yourselves




Simple answer
By lightfoot on 6/2/14, Rating: -1
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