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In NC, the gas tax pays collects approximately $1.8 billion with a general highway fund of $2 billion. So how do you figure? Perhaps because NC is not really in the South?
If you figure 12k miles, 20 mpg (which is the fleet average), there is 600 gallons a year. We pay $.375 per gallon to the state (ie not counting the federal portion). This is $225 for the average car. The EV fee captures a little less than 1/2 of that. So call the gas tax 1/2 pollution and 1/2 road maintenance and the fee is fair. But really if you agree with that proportionment of 50/50, then the gas tax should be closer to $.70 a gallon to get twice the highway fund. We are already the 3rd highest in the country (although some places have regional gas tax like Chicago I think), so I doubt you could sell that to the citizens....
I am surely not happy about the $100 but it is really a tough argument to say it isn't fair.
My concern on this model is that very low mileage drivers are over taxed. I drive less than 6000 miles per year. With the car my LEAF replaced I would pay less than $50/year in state gas tax. So I'd say it isn't fair. Of course, getting a free ride on the roads isn't fair either. a gas tax is a good 'sin tax', but is imperfect as a user fee.
While that is true, the extra depreciation you get on a new car when driving only 6000 miles a year dwarfs this fee. But in NC, you would need a 50 mpg car to get down to $50 a year. Maybe you had a Prius. A government has to use averages - a Prius driving 6000 miles is an outlier. You may actually pay more tax in this scenario but you are one of less than 5% that are.
dflye
S Sig Perf 414, VIN 814
My favorite is the various brand new multi-lane highways down east that just happen to be in the districts of various corrupt politicians. Every time I've been down one of those boondoggle roads, rarely see more than a few cars. And yet our local highways are crap, they are double-charging for the portion of 540 that they decided to make a toll-road after having already built the damn thing at taxpayer expense and they can't patch a pothole to save their lives!
Not quite.
Instead of the gasoline you're either using electricity or spending the money. In both cases you'll be paying 6.75% to 7% sales tax.
So, let's say $3.30/gallon right now, with $0.375 + $0.184 = $0.559, so underlying price is $2.741, sales tax on that $0.183 to $0.19 per gallon, so lost revenue of maybe $0.376/avoidedgallon. So that $100 fee actually pays up front for 265.90 gallons, which at a miserable 20mpg would get you 5,318 miles per year or 14.56 miles per day. Meanwhile, that spare cash you're spending by using electricity instead of gasoline could be working in the economy instead of disappearing down a well or into those expensive overheads people call the DoD, VA and healthcare.
Merrill
Merrill
Well the portion of tax we pay when buying a gallon of gas should be completely removed and you should pay a tax based on usage. In California we know that these funds are not all going to repair the roads, we have some of the worst roads in the country. I would also want something written into the legislation saying that the money collected to maintain the road can only be used for maintaining the roads. I do not mind paying my fair share to keep the roads that I drive on maintained.
Right - all the government is filled with waste and things I don't want. So now all taxes are unfair and should be repealed.
People are using arguments that an EV tax is unfair because government wastes money. I don't disagree the government wastes money but that doesn't mean an EV tax is unfair.
No tax goes exactly where you want it. All my income tax should go toward things that protect my income. All alcohol taxes should go to healthcare costs borne by alcohol and uninsured DWI accidents etc etc. See how ridiculous that proposition is?
Why should the gas tax make any more sense than the rest of our taxes? The fact is that at least it is a consumption based tax and discourages bad behavior.
People are using arguments that an EV tax is unfair because government wastes money. I don't disagree the government wastes money but that doesn't mean an EV tax is unfair.
No tax goes exactly where you want it. All my income tax should go toward things that protect my income. All alcohol taxes should go to healthcare costs borne by alcohol and uninsured DWI accidents etc etc. See how ridiculous that proposition is?
Why should the gas tax make any more sense than the rest of our taxes? The fact is that at least it is a consumption based tax and discourages bad behavior.
Well, your income tax suggestion is silly. Income tax, like sales taxes and property taxes, are a means of taxing wealth. They are completely appropriate for providing a general fund for the "general welfare".
But then there are "consumption" or "sin" taxes which as in the case of alcohol and tobacco definitely should only be paying for the negative impact and discouraging behavior with an element of zero sum taxation.
The problem with the gas tax is that it's an unfair and bad way to pay for roads and road use and at US levels it's pathetic as a"sin" tax. Then the problem with the fixed fee is that it's an unfair and bad way to pay for roads and it'd be a regressive "sin" tax.
JJR64
28680
People are arguing that the EV tax is fair because we all need to maintain the roads. I don't like it but I can buy into that argument. This is a slippery slope though. Should owners of highly fuel efficient cars have to pay some sort of added tax on top of the fuel taxes they pay? After all, if someone gets 50 mpg with their car when another car owner gets 15 mpg, the fuel efficient driver is paying way less to maintain roads than the non fuel efficient driver. In fact, the fuel efficient car may actually be paying less in gas taxes than the EV road tax. The states and the feds really need to look at (1) how much they spend and (2) what system they should to use to assess who pays how much.
I don't think anyone would think that sales taxes are a means of taxing wealth. They are regressive and are a good tax on the poor.
The concept of a sin tax isn't really to be only paying for the negative impact. It is supposed to discourage behavior which is not at all the same thing. When gas was $1, then $.50 of taxes on top of that probably did discourage its use. There are few states where alcohol and tobacco taxes come close to paying for the negative impact. The alcohol tax in NC hasn't slowed me down one bit....
The gas tax is relatively fair as a way of paying for roads. You could just use income tax. At least gas use has some correlation with road use. Not perfect but simple. A fixed fee isn't perfect but any of the truly "fair" ways of doing it are pretty complicated - ie using vehicle weight and miles driven.
Honestly by the truly fair method of doing things, a Tesla owner usually gets a really good deal with a $100 a year. The car is quite heavy and will generally get above average use. A comparable car will not get 20 mpg. Using income tax will generally tax a Tesla owner more than $100 as their share of road fund. So where is the beef on a Tesla forum? I suspect I'd be paying $500 a year if it was strictly income and the average Tesla owner would be too.
Now I drive a Leaf and my comparable could be a Prius - then $100 might be an issue. But I drive enough that $100 is still pretty good.
On sales taxes on electricity - not every state collects sales taxes on electricity. I do think we collect 3% so my annual electricity tax bill attributed to the Leaf is $3.
I get that people want government to encourage EVs and taxation seems unfair. Let us not forget that NC is certainly not the only state with an EV "road use fee".
you said it very well....one has to pay taxes to keep the road in good condition otherwise you never know what hit under the model S :redface:
steve841
Active Member
It's refreshing to see some sanity in this thread rather than the typical "I'd gladly pay ..."
The are few, if any, government run programs that are efficient. Unfortunately, the USA bureaucrats, at all levels, by and large, are corrupt beyond belief. They have never met a tax (or "fee" as they've changed the lexicon) they didn't like.
Down here, they've sold the herd on special lanes that are toll driven in an effort to alleviate traffic. So, they take a 5 lane highway, carve out 2 lanes and add a toll, and leave the remaining 3 lanes as free and call it "alleviating traffic" and the morons just buy into it like usual. No one fights back. It's unfreakin believable.
Here's my tribute to your tax dollars from fuel ... rest assured someone made a ton of money from that gas tax for such vital infrastructure.
The are few, if any, government run programs that are efficient. Unfortunately, the USA bureaucrats, at all levels, by and large, are corrupt beyond belief. They have never met a tax (or "fee" as they've changed the lexicon) they didn't like.
Down here, they've sold the herd on special lanes that are toll driven in an effort to alleviate traffic. So, they take a 5 lane highway, carve out 2 lanes and add a toll, and leave the remaining 3 lanes as free and call it "alleviating traffic" and the morons just buy into it like usual. No one fights back. It's unfreakin believable.
Here's my tribute to your tax dollars from fuel ... rest assured someone made a ton of money from that gas tax for such vital infrastructure.
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dflye
S Sig Perf 414, VIN 814
The situation in NC (at least in my area) is about the same... they put a new neighborhood in not too far from home, leaving several intersections with unfinished roads in one direction.
Their solution? Why just use one red diamond when you could use a dozen or more! I think I counted about 40 signs used for 3 blatantly obvious dead-ends.
Leaving aside the politics for discussion elsewhere, there are some core issues that can't be dismissed as "bureaucrats want our money."
The following statements are, I think, uncontroversial:
- A robust transportation infrastructure is essential for the public welfare and a healthy economy
- A full network of roads, from local streets up to interstate highways, is appropriately part of this infrastructure
- The network, once built, is a public good
- Provision of public goods is an appropriate role of government
- Roads are costly to build and to maintain
- Therefore the government must collect revenues sufficient to build and maintain the roads
Having gotten to #6, we can then try to develop an optimal mechanism to generate those revenues. Some general observations:
- Some road maintenance costs are not linked to usage, e.g. all public roads are plowed, regardless of whether they are heavily or lightly traveled (conceding, though, that heavily traveled ones are plowed more frequently)
- Usage, measured in miles, is a poor proxy for incremental wear-and-tear on the roads. Heavy vehicles cause a disproportionate amount of wear.
- The actual miles you travel doesn't fully inform the value to you of having a full network available; there is an "optionality value" of knowing that you could travel to places in your car, even if you do not do so in a given period
My instincts as an economist are that the optimal tax will be a "two-part tariff", with a fixed component (=annual charge) and a variable component (=mileage based). The fixed component covers the fixed costs of the system, and the variable component covers the variable costs. The variable component should probably be a function of mileage and vehicle weight, something along the lines of A * miles * weight^2 (where A is a constant designed to cover expected costs).
The existing gas tax is missing the fixed component, but at least includes some elements of the weight-based variable cost (because, all other things being equal, a heavier vehicle uses more fuel). The fixed EV charge that North Carolina and other states collects is not optimal because it only has the fixed component, with no variable component, and creates an unjustified discrimination between classes of vehicles not reasonably linked to their impact on road costs.
The pay-to-use HOV lanes that @steve841 cites (called "Lexus lanes" in DC) are an attempt to levy taxes on those with the greatest willingness to pay. This approach is normally optimal, but in this case it creates a negative side-effect on those who don't pay, reducing the utility of the infrastructure itself. It would be a really interesting problem to work through, if I were still an econ grad student.
OK, sorry for the economics & regulation lecture...
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steve841
Active Member
No problem at all. But, the problem is not economics, it's fraud, corruption and waste.
Unfortunately, that's a far more complicated lecture that falls on deaf ears.
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