ElectricMotorcycleForum.com
General Category => General Discussion => Topic started by: Richard230 on February 20, 2017, 05:14:24 AM
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Someone recently asked what the proposed law was that would increase gas taxes in California and charge all electric vehicles an additional fee to use the roads. I just saw an article in my newspaper today that mentioned this proposal, but gave no details. It is Senate Bill 1, introduced by Senator Jim Beall, D-Campbell. (Which gives you an idea how interested the state legislature is in addressing this issue. They wasted no time submitting the bill.) In the past there have been trial balloons floating around about increasing EV yearly registration fees by an additional $165, over and above the usual fee charged to IC vehicles. Interestingly, there is not single word in the article about what is currently contained in the latest version of this bill and I haven't heard any discussion on the radio or in the newspaper about it lately, either. Which leads me to believe that the bill's author is looking to "tax the guy behind the tree" - which would be a group like us. ::)
The other transportation funding bill that is mentioned was introduced by Assemblyman Vince Fong, R-Bakersfield, who has authored Assembly Bill 496. This proposal is a "no tax alternative" that would "redirect billions of dollars in taxes generated through vehicle sales and insurance from the state"s general fund to road repairs."
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These tax schemes are dumb. The best type of tax is income tax.
Taxes on liquor, cigarettes, gasoline, vehicles, and the like sound good on paper for various reasons. They all also represent a proportion of spending--which may also sound good on paper. After all, rich people buy more liquor (for their parties), drive sports cars, and buy all those fancy cars, right? Rich people might have a collection of 40 sports cars or motorcycles.
Well it turns out they still don't drive 40 times as much, consume 40 times the gasoline, or whatnot. Your $50,000 income earner is going to pay $165 for each of his two vehicles ($330); your $5,000,000-income earner is going to pay $165 for each of his 50 EVs. So at $50k, you pay 0.66% of your income; at $5,000K, you pay a 0.165% income tax. ... oops? Obviously, if you're poor, that single junker vehicle registration is 0.825% of your $20k income, too.
People drive an average of 12,000 miles per year, according to DOT. If your rich guy makes just 10x as much ($500,000 vs $50,000) and his sports car eats twice the gasoline, then he's being taxed at a lower income-proportional rate until he's driving 60,000 miles per year or 165 miles per day; and for a straight mileage tax, it's 120,000 miles. On the other hand, independent freight truckers will get hit harder with a mileage or fuel tax, despite not being particularly rich.
Sales tax doesn't apply to investments. Rich people don't pay so much in sales tax; they pay income tax on on stocks and exercised options awarded as compensation, and on short-term gains (1 year) on those stocks. They pay 15% capital gains on long investments (over 1 year holding). Rich folks apply a larger proportion of their income to savings and investments, thus sales taxes impact lower-income households more.
We call these regressive taxes.
Beyond that, incomes scale directly as a proportion of productivity. The buying power of all of the income in the United States or in any given state is equivalent to everything produced and sold in that economy. As technical progress increases what we produce for the same labor, that buying power increases; and as population grows and straight production increases, so too does the total buying power. In the first case, the buying power per-capita increases, which means you can accomplish the same with a smaller proportion--you can lower taxes and be able to provide the same services; in the latter case, the take automatically scales with the population and the load that population puts on the economy, thus you can supply the same government services without raising taxes.
The problem is raising income taxes requires announcing to everyone that you're taxing them, directly, out of their paycheck and profits. It's politically-infeasible. People react less to things around them getting more expensive (because they feel they have a choice to not pay the tax--just don't buy so much gasoline; drive less), and of course wealthier interests are largely-exempted thanks to the increase being smaller fraction of their income than would be an actual income tax adjustment.
Income taxes are honest. Registration taxes, gas taxes, and other service taxes are methods of hiding taxes and, especially, regressive taxes. Like flat taxes, they're useful only for specific goals--such as bottle bills taking a deposit on beverage containers, which encourages behaviors reducing the amount of litter in the streets. Use with extreme caution.
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I have mentioned in various previous posts my feelings about being "punished" for driving and EV.
I have no problem paying for the miles that I DRIVE / RIDE. An arbitrary tax of a set cost for all
vehicles is punitive. The major proponents seem to be the Koch brothers ( who would have thought ).
If you look around the states proposing similar laws, you should see a pattern. Here is an article
mentioning what they are doing. Interestingly enough, it isn't from a U.S. source.
https://theintellectualist.co/koch-industries-behind-flurry-bills-designed-punish-people-driving-electric-vehicles/
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These tax schemes are dumb. The best type of tax is income tax.
Taxes on liquor, cigarettes, gasoline, vehicles, and the like sound good on paper for various reasons. They all also represent a proportion of spending--which may also sound good on paper. After all, rich people buy more liquor (for their parties), drive sports cars, and buy all those fancy cars, right? Rich people might have a collection of 40 sports cars or motorcycles.
Well it turns out they still don't drive 40 times as much, consume 40 times the gasoline, or whatnot. Your $50,000 income earner is going to pay $165 for each of his two vehicles ($330); your $5,000,000-income earner is going to pay $165 for each of his 50 EVs. So at $50k, you pay 0.66% of your income; at $5,000K, you pay a 0.165% income tax. ... oops? Obviously, if you're poor, that single junker vehicle registration is 0.825% of your $20k income, too.
People drive an average of 12,000 miles per year, according to DOT. If your rich guy makes just 10x as much ($500,000 vs $50,000) and his sports car eats twice the gasoline, then he's being taxed at a lower income-proportional rate until he's driving 60,000 miles per year or 165 miles per day; and for a straight mileage tax, it's 120,000 miles. On the other hand, independent freight truckers will get hit harder with a mileage or fuel tax, despite not being particularly rich.
Sales tax doesn't apply to investments. Rich people don't pay so much in sales tax; they pay income tax on on stocks and exercised options awarded as compensation, and on short-term gains (1 year) on those stocks. They pay 15% capital gains on long investments (over 1 year holding). Rich folks apply a larger proportion of their income to savings and investments, thus sales taxes impact lower-income households more.
We call these regressive taxes.
Beyond that, incomes scale directly as a proportion of productivity. The buying power of all of the income in the United States or in any given state is equivalent to everything produced and sold in that economy. As technical progress increases what we produce for the same labor, that buying power increases; and as population grows and straight production increases, so too does the total buying power. In the first case, the buying power per-capita increases, which means you can accomplish the same with a smaller proportion--you can lower taxes and be able to provide the same services; in the latter case, the take automatically scales with the population and the load that population puts on the economy, thus you can supply the same government services without raising taxes.
The problem is raising income taxes requires announcing to everyone that you're taxing them, directly, out of their paycheck and profits. It's politically-infeasible. People react less to things around them getting more expensive (because they feel they have a choice to not pay the tax--just don't buy so much gasoline; drive less), and of course wealthier interests are largely-exempted thanks to the increase being smaller fraction of their income than would be an actual income tax adjustment.
Income taxes are honest. Registration taxes, gas taxes, and other service taxes are methods of hiding taxes and, especially, regressive taxes. Like flat taxes, they're useful only for specific goals--such as bottle bills taking a deposit on beverage containers, which encourages behaviors reducing the amount of litter in the streets. Use with extreme caution.
my main argument is extremely simple. The government currently takes more than half of "my" income. The problem is not the amount of money they take it, its how poorly they use the money they already receive.
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I don't think anyone would argue that the (just about every) government is not very efficient when it comes to spending our taxes and I think that is what really irks just about everyone. (Even the North Koreans?) And I don't think "making America great again" is going to change anything. ::) As I see it, when you are not actually spending your own money, you care less about how that money is being spent. And when it comes to taxing someone or group, the famous saying "Don't tax you and don't tax me, let's tax that guy behind the tree." is always true. The best tax is the one that no one knows about - or at least sees coming. :o
Personally, knowing that I can do little to change what legislators do, I enjoy playing a "thought experiment" where I consider who is proposing new taxes and ways to spend them. When you really dig down to the core of the issue, you usually discover that the person introducing the proposed law is going to financially benefit in some way. While they always say that the new tax or government program is for our benefit, you can usually make an argument that it will benefit the politician in some way more than it will benefit you. ::)
As I have said before, electric vehicles (including other "alternative" vehicles like H2-powered, which haven't been mentioned in this proposed bill, the last time I heard ??? ) should pay a fair share of road maintenance, but taxing the owner a flat amount just because they own one or more such vehicles, doesn't seem the right or fair thing to do. However, there does seem to be a trend at slowly withdrawing any incentives to owning a "non-polluting, energy-efficient" vehicle, so maybe there is something else going on here. (Says a guy who loves a good "fake-news" conspiracy theory. ;) )
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Motorcycles should be charged according to road wear damage (all models point to zero).
It is only fair that EV drivers get paid the health care savings from the collective.
So I'm reasonable in expecting to be paid for not poisoning people. (at about $18.42 per "tank" so lets just say $5.00 per charge)
You can read the whole report... I posted a section below...
http://www.lung.org/local-content/california/documents/2016zeroemissions.pdf (http://www.lung.org/local-content/california/documents/2016zeroemissions.pdf)
Vehicle Health and Climate Costs:
This report estimates that in 2015, the harm attributed to passenger vehicles in the 10 ZEV States totaled $37 billion in health and climate costs combined, as shown in Figure ES1.2
Of that figure, health costs added up to $24 billion in 2015; that total represents the monetized sum of harmful emissions responsible for an estimated 220,000 work-loss days, more than 109,000 asthma exacerbations, hundreds of thousands of other respiratory health impacts, and 2,580 premature deaths.
To simplify: each tank of gasoline used in the 10 ZEV States is estimated to cause $18.42 in health and climate costs, as shown in Figure ES2.
Under this report’s “ZEV Future†scenario, 100% of the new car sales and approximately 65% of all cars on the road are assumed to be ZEVs by 2050 in the 10 ZEV States. Under this scenario, a conservative estimate of the total health and climate change costs associated with passenger vehicle fleet pollution drops from to $37 billion annually to $15.7 billion by 2050, as shown in Figure ES1. This represents a $21 billion drop in annual costs. Annual pollution-related impacts drop by over 85%, due to fewer lost work days caused by pollution-related illnesses, fewer asthma attacks and fewer premature deaths.
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my main argument is extremely simple. The government currently takes more than half of "my" income. The problem is not the amount of money they take it, its how poorly they use the money they already receive.
Actually, in 2013, the Federal revenue was equivalent to a flat-income-tax rate of 29.97% on all taxable income excluding benefits paid from welfare (generally the government counts food stamps, unemployment, and social security as taxable income--which is ridiculous, because your straight income comes from productive work and represents a portion of wealth-creation; welfare income is taken from that and handed to someone else, and taxing it only re-taxes money which originated from productive work done somewhere else. Welfare is a government service paid for out of your productive output, and taxing it is ridiculous).
Federal spending was higher than that. Deficit spending is okay so long as it's slower than inflation--if the debt grows slower than its inflation adjustment, then its purchasing power is shrinking, thus you're getting out of debt. We had some years where we were growing debt for real; we're about at-pace with inflation now, last I checked.
I don't think anyone would argue that the (just about every) government is not very efficient when it comes to spending our taxes and I think that is what really irks just about everyone.
Actually, that's not true. The government does some inefficient things, at least in the narrow view; and it also operates extremely-efficiently at many things.
In some large part, certain government services are only efficient as government services. This can be absolute--roads, police forces, and military defense--or it can be economic. High-wealth societies (high degree of technology) expend less on medical care, and are thus more-efficient with things like single-payer healthcare systems--optimized by having mandatory employer-provided healthcare to create market forces (consumers want low-price goods, employers want low-cost and so argue for low-price health insurance, insurance suppliers want low healthcare costs, and healthcare providers have an absolute cost floor and cannot go below a certain price), then using that negotiated healthcare pricing as a benchmark in single-payer negotiation. Low-wealth societies are actually less-efficient and unable to supply this, and have to take a strategy where the poor just get sick and die or else they end up spreading poverty without any real way to even supply the healthcare they're trying to mandate. Such considerations are usually ignored in favor of idealism in political discussions.
In another part, though, government organizations are surprisingly-efficient, both in absolute and relative terms. Large governments have large tax bases and can take on expensive projects, so a $3 million upgrade of systems costs the 153,000,000 American workers 1.96 cents each while controlling expansion of administrative overhead to the tune of a dozen $80,000/year workers. I've seen US government approaches to major operational projects, and many administrations are highly-effective in execution of major projects. Those organizations also idle a lot of their work force, so often seem inefficient because there really is a lot of waste.
When I moved into the private sector, I was... confused, to say the least. The lack of proper project management in enormous companies pulling multi-billion-dollar profits meant a lot of repeat work, failure, support calls, down time, lost revenues, and repeated purchasing of hardware to replace hardware that was inadequately spec'ed the first time. I saw higher than 80% project failure rates, meaning a department with a $10 million budget was spending less than $2 million on anything useful, and $8 million on work that produced no result and was ultimately abandoned; and the successful projects wastefully applied resources and strung themselves out for years instead of months.
I've also watched those businesses reorganize, apply new management processes, and cut down failure rates and turn-around times massively. I've seen SLAs become feasible. I've seen projects that lumbered along for half a decade get restarted, organized, and completed in 4-6 months. The inefficiencies are falling away.
It's strange to watch how governments operate; it's even stranger to consider how very bad some large businesses are at doing anything. Sometimes it's hard to even determine what problems are real. My basic litmus test is to look at business net profit margins: if a major road construction business is pulling 70% net profit margins, then the government is overpaying for roads; if it's pulling 10% profit margins, then all the anomalies like dragging their feet to draw out their contracts and siphon more government money are just ways to distort the per-hour price--negotiating a below-cost hourly contact price and inflating the hours required to hit profitability. That's a good starting point because it actually tells you what contract work costs and most people are concerned with how much the government will pay for things they think they could buy for less--the question is, are those prices really over-inflated, and are we being scammed out of our tax money?
The real problem with governments is their impact on the economy at large. Regulations, welfare, and core services are required to maximize efficiency; figuring out what regulations, welfare, and core services we need for the maximum efficiency is hard. On one end, we have USSR-style failures where the government tries to dictate the economy and fails; on the other, we have anarcho-capitalism where we let the free market do everything and end up with a bunch of inefficient garbage and an eventual megacorporation buying it all up and becoming the de-facto government due to (of all things) superior efficiency in certain central authorities. The perfect balance continuously moves, as well, so we aren't going to discover the magic formula and live happily ever after.
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Looks like it'll add $38/yr/vehicle for everyone and an extra $100/yr/zev for us:
"an increase of $38 in the annual vehicle registration fee with an inflation adjustment, as provided, a new $100 annual vehicle registration fee with an inflation adjustment, as provided, applicable to zero-emission motor vehicles, as defined,"
https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB1
Sent from my iPhone using Tapatalk
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Looks like it'll add $38/yr/vehicle for everyone and an extra $100/yr/zev for us:
"an increase of $38 in the annual vehicle registration fee with an inflation adjustment, as provided, a new $100 annual vehicle registration fee with an inflation adjustment, as provided, applicable to zero-emission motor vehicles, as defined,"
https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB1
Sent from my iPhone using Tapatalk
The problem with that idea is that it might be fair for Tesla owners who drive many thousands of miles a year, but I bet that most of us don't do anything like that kind of mileage. So we would be getting proportionally screwed. :( And if you happen to own more than one EV, then you are getting hit even harder. >:( I hope Zero will contact their state legislators and get them to lower the EV road tax rate for electric motorcycles in the proposed road tax law.
Between the Federal EV purchase tax credit going away and the state EV rebate being adjusted to favor lower income people, and the yearly EV registration tax being increased (and who knows if that will be deductible on our income tax returns), owning an electric vehicle is not getting any cheaper - especially when you consider the big hit we take in resale value. :(
If legislators would just think about us for a moment, they would realize that riding electric motorcycles should be encouraged as we are quiet riders and making a lot of noise is the one big thing that the public hates about motorcycles.
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The problem with that idea is that it might be fair for Tesla owners who drive many thousands of miles a year, but I bet that most of us don't do anything like that kind of mileage. So we would be getting proportionally screwed.
Some of us DO put on that kind of mileage, however. But it's also true that ALL motorcycles get the screw anyhow....road wear is related to axle loading, with a large exponent, so motorcycles put almost no wear on the roads, compared to cars, which are in turn far easier on the roads than trucks are.
To me, assuming you're going to need to pay for road maintenance with some sort of tax, a fuel tax makes a lot of sense. Generally, the smaller the vehicle, the less fuel it uses, which means that you'll pay a lower tax and pay less for road maintenance. It doesn't follow the high exponential function of the axle loading wear factor, but at least bigger vehicles do pay a bigger share.
It's true that we EV drivers bypass any gasoline and/or diesel taxes, but we certainly do pay taxes on our "fuel" of choice. Presumably this is to pay for maintenance of the electrical system, not for road maintenance, but I think the power companies are mostly responsible for those costs, not the state, aren't they? In any event, it seems very strange to give EV owners a subsidy on their electrical rates (here in CA, the owner of an EV can get on a program that will reduce his ENTIRE electrical bill, not just the portion used to charge his vehicle) and then charge them more to register their vehicle because somehow they're not paying enough taxes. That's kind of absurd even for our government.
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I hope Zero will contact their state legislators and get them to lower the EV road tax rate for electric motorcycles in the proposed road tax law.
We all (who live in California in this case) should contact them as well.
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To me, assuming you're going to need to pay for road maintenance with some sort of tax, a fuel tax makes a lot of sense.
Why does it make sense?
An income tax pulls a proportion of what amounts to all of the total production of the entire economic unit (state, nation). For individuals, expenses are non-deductible; whereas businesses deduct expenses (wage, supplies, outsourcing) because they're paying those to producers (workers, other businesses as abstractions of workers). Import labor and supplies is expended on stuff not produced here, so isn't taxed, isn't counted as income (GDP, total personal income, total taxable income), and isn't part of our productivity; export labor and goods are sent out of the country, and we count the money coming in as income and tax it, which completes the other side of reflecting what we produce.
As our ability to produce scales--with population, technical progress, or even trade (buying crap we can't make easily from someone else, and using our labor to instead make things we can produce more-effectively)--our load on infrastructure increases, and so does the absolute purchasing power of a proportion of the income.
All production and consumption works its way through infrastructure. Goods you purchase are moved over roads, for example. Even in the most fundamental sense, technical progress requires that we replace some jobs with fewer jobs, then use the remaining labor slack to create other jobs--which creates transitional unemployment (individuals) and a reserve labor force (the U-3 and such statistics)--thus welfare is part of our responsibility to maintain the labor force, and represents a proportional cost (which, by the way, shrinks as trade and technical progress increase wealth and decrease the cost of living).
A fuel tax just encourages strategies like using large, heavy freight trucks with high-PSI tires to ship more goods at once, increasing road wear per mile while decreasing fuel usage. Freight trucks consume a hell of a lot of gas accelerating, and very little cruising. We could slap a KERS in them, but largely they just try to cruise a lot.
Fuel taxes also could (but likely don't) encourage less driving in total. High fuel costs ($4/gal) drop miles driven substantially, whereas a fuel tax might represent 23 cents of a $2.25/gal price. A substantial fuel tax would increase this pressure, which would do nothing to reduce the freeze-thaw damage done to roads in cold climates, or the expansion damage done in hot climates (roads buckle in New Mexico from overheating). From an engineering perspective, traffic only damages roads once they've been cracked and broken by weather.
Why is a fuel tax more sensible than an income tax? Why is it sensible at all?
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I support use taxes like gas taxes. Use the road more, pay more. Heavy vehicle, pay more.
Yet, I think it is unfair for EVs to pay a large flat fee that would be more than what a conventional gas vehicle would pay in gas tax.
I also think that it would not be wrong to give clean air vehicles a tax brake.
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I support use taxes like gas taxes. Use the road more, pay more. Heavy vehicle, pay more.
Amen. Again, it's not a perfect system, but one way or another we have to pay to maintain the roads, and this seems a lot more equitable to me than doing it out of the general tax fund.
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I support use taxes like gas taxes. Use the road more, pay more. Heavy vehicle, pay more.
Amen. Again, it's not a perfect system, but one way or another we have to pay to maintain the roads, and this seems a lot more equitable to me than doing it out of the general tax fund.
I agree. Unfortunately, that is not the easiest way to collect road taxes. Tacking a flat fee onto your vehicle registration each year is a whole lot easier and that would appear to be why that type of tax is being floated. Plus, the vehicle registration fee goes right into the state's general fund and can be used for whatever they wish, just like any other tax. There is no guarantee that it will be actually used for road maintenance. :(
Needless to say you probably have noted that motorcycles don't get much of a break when crossing a bridge of using a "Lexus" lane - especially when the collection system is automated and there is no human to judge the size of the vehicle.
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Amen. Again, it's not a perfect system, but one way or another we have to pay to maintain the roads, and this seems a lot more equitable to me than doing it out of the general tax fund.
It's easy to get people to go along with something unfair if you can convince them it's fair.
Through several mechanisms, usage taxes push the cost onto the poorest and relieve the richest. The people who receive the least wealth for their time are made to pay the most. That's a disproportionate exchange of labor for use.
Let's say you make $27/hr (United States median household income). You drive 12,000 miles per year at 30mpg and you pay 25 cents per gallon of gas tax. That's $100/year, 3.7 hours of labor.
If you make $8.25/hr (minimum wage) and drive 12,000 miles at 30mpg, that's 12.1 hours of labor. That is to say: for the same driving, you pay 3.4 times as much in terms of working labor cost.
If you're a commercial freight driver, it doesn't actually matter what the gas tax costs; that's an expense, you roll it into your fees, and that moves down into the cost and the eventual price of the product. Freight costs averaged $1.91 in 2016, with a $0.17 cent per mile fuel cost, and account for roughly 50% of the retail cost of many goods (such as food and clothing). That means the cost is 8.9% of the freight cost; a 25 cent per gallon fuel tax comes to 0.49%. The $27/hr guy and the $8.25/hr guy both pay this pretty directly--about 9.1 hours of labor for either. Compounding effects aren't explored here.
When you get up to people making $100/hr, things change.
The $100/hr guy only drives 20,000 miles, including a fancy sports car that gets 18mpg. That's $277 or 2.77 hours. He also invests about 9% of his gross income into his 401(k)--roughly $13,500 post-tax, $18k pre-tax--plus expends a large amount of income on his house and intangible goods like insurances. Call it 30% in total and he only pays 0.343% of that additional fuel tax on purchased goods and services, 6.86 hours.
So a guy making $27/hr and driving 12,000 miles pays 12.5h for roads; a guy making $8.25/hr and driving 12,000 miles pays 21.2h for roads; and a guy making $100/hr and driving 20,000 miles at 18mpg might pay 9.63h for roads (or as high as 11.9h).
If you can avoid getting super-liberal about it and trying to eat the rich for being rich, you can also point out that richer people are also generally benefiting from income made by shipping those goods out to consumers--those consumers pay that fuel tax involved in the shipping of goods to them, and the revenues generated by the sale of those goods provide the source of income to pay paychecks of engineers, managers, and executives.
Calling this "equitable" is myopic. It's saying, "Well, you touch it, and we charge you more pennies the longer you touch it." Turns out you can play with it longer and harder and spend less time under the whip for the privilege than the next guy.
It's also hilariously bad logistics. The infrastructure costs are going to be largely based on economic activity; a general fund funded by an income tax is going to directly take part of that, and automatically adjusts for it. Because of the haphazard unevenness of a fuel tax or mileage tax, you'll need to keep adjusting that tax--notably, every bit of economic progress (technical growth) that doesn't make roads easier to build will require raising that tax. It's going to have to increase faster than inflation.
"Not a perfect system"? It's one of the worst systems ever designed. (Sales tax is the worst; a flat-tax general fund would be worse only because of its extreme scope, and it wouldn't be worse than a sales-tax-driven general fund--which would totally destroy the economy in a month.) Use taxes only make sense when the government is providing a commodity (because then you're buying goods), like water; and even then, minimum usage rates make the most sense in most such systems.
Inequitable, inefficient, and unstable.
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The road maintenance tax proposal (SB1) has finally surfaced big time with the Governor holding a news conference yesterday to push his tax increase plan to repair roads, bridges and public transportation systems (that should have been properly maintained all along, in my opinion). Here are the proposed tax increases according to an article in my newspaper today:
$24.4 billion would be raised by increasing gas tax by 12 cents a gallon. (I believe that would increase it to a total of 50 cents a gallon.)
$200 million from an annual $100 "zero emission vehicle fee", beginning in 2020 (?).
$7.3 billion raised by increasing diesel excise tax by 20 cents a gallon.
$3.5 billion by increasing diesel sales tax to 5.75%
$16.3 billion from an annual "transportation improvement fee", based upon the vehicle's value. This would increase the current registration fee from between $28 to $165, depending upon the value.
$706 million in general fund loan repayments. (?)
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Amen. Again, it's not a perfect system, but one way or another we have to pay to maintain the roads, and this seems a lot more equitable to me than doing it out of the general tax fund.
It's easy to get people to go along with something unfair if you can convince them it's fair.
Through several mechanisms, usage taxes push the cost onto the poorest and relieve the richest. The people who receive the least wealth for their time are made to pay the most. That's a disproportionate exchange of labor for use.
Let's say you make $27/hr (United States median household income). You drive 12,000 miles per year at 30mpg and you pay 25 cents per gallon of gas tax. That's $100/year, 3.7 hours of labor.
If you make $8.25/hr (minimum wage) and drive 12,000 miles at 30mpg, that's 12.1 hours of labor. That is to say: for the same driving, you pay 3.4 times as much in terms of working labor cost.
If you're a commercial freight driver, it doesn't actually matter what the gas tax costs; that's an expense, you roll it into your fees, and that moves down into the cost and the eventual price of the product. Freight costs averaged $1.91 in 2016, with a $0.17 cent per mile fuel cost, and account for roughly 50% of the retail cost of many goods (such as food and clothing). That means the cost is 8.9% of the freight cost; a 25 cent per gallon fuel tax comes to 0.49%. The $27/hr guy and the $8.25/hr guy both pay this pretty directly--about 9.1 hours of labor for either. Compounding effects aren't explored here.
When you get up to people making $100/hr, things change.
The $100/hr guy only drives 20,000 miles, including a fancy sports car that gets 18mpg. That's $277 or 2.77 hours. He also invests about 9% of his gross income into his 401(k)--roughly $13,500 post-tax, $18k pre-tax--plus expends a large amount of income on his house and intangible goods like insurances. Call it 30% in total and he only pays 0.343% of that additional fuel tax on purchased goods and services, 6.86 hours.
So a guy making $27/hr and driving 12,000 miles pays 12.5h for roads; a guy making $8.25/hr and driving 12,000 miles pays 21.2h for roads; and a guy making $100/hr and driving 20,000 miles at 18mpg might pay 9.63h for roads (or as high as 11.9h).
If you can avoid getting super-liberal about it and trying to eat the rich for being rich, you can also point out that richer people are also generally benefiting from income made by shipping those goods out to consumers--those consumers pay that fuel tax involved in the shipping of goods to them, and the revenues generated by the sale of those goods provide the source of income to pay paychecks of engineers, managers, and executives.
Calling this "equitable" is myopic. It's saying, "Well, you touch it, and we charge you more pennies the longer you touch it." Turns out you can play with it longer and harder and spend less time under the whip for the privilege than the next guy.
It's also hilariously bad logistics. The infrastructure costs are going to be largely based on economic activity; a general fund funded by an income tax is going to directly take part of that, and automatically adjusts for it. Because of the haphazard unevenness of a fuel tax or mileage tax, you'll need to keep adjusting that tax--notably, every bit of economic progress (technical growth) that doesn't make roads easier to build will require raising that tax. It's going to have to increase faster than inflation.
"Not a perfect system"? It's one of the worst systems ever designed. (Sales tax is the worst; a flat-tax general fund would be worse only because of its extreme scope, and it wouldn't be worse than a sales-tax-driven general fund--which would totally destroy the economy in a month.) Use taxes only make sense when the government is providing a commodity (because then you're buying goods), like water; and even then, minimum usage rates make the most sense in most such systems.
Inequitable, inefficient, and unstable.
I'm in favor of the gas tax acting like a user fee. If the roads are free, then they are bound to be overused (tragedy of commons).
The numbers you run point out how low gas tax is. Compare that to a normal bills like cell phone bills.
Yet, gas tax only covers 41% of state and local road spending according to the Tax Foundation, so sales, income and property taxes are paying for the majority of the roads. That means the the white collar worker that rides his bicycle to work could be paying more of the roads than the 100 mile a day super commuter with a lower job.
https://taxfoundation.org/state-gasoline-tax-rates-2016/
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If you can avoid getting super-liberal about it and trying to eat the rich for being rich...
I'm really getting tired of everything in this country these days being all about someone's political orientation. We need to stop doing that, and stop doing it now. Everybody needs to get out of whatever echo chamber they're living in and look at things honestly and without injecting politics into every single thing.
I'm in favor of the gas tax acting like a user fee.
Great, let's do it! Let's set up toll booths on every road, highways and surface streets alike, and have sliding rates depending on number of axles as well as axle loads (since the amount of wear and tear on the road surfaces is almost exclusively determined by axle loading), and everybody can stop every few miles and pay what they owe. Except that would require bazillions of toll booths, hordes of people to man them (or massive expenses on automation), and be a complete and royal pain in the ass. EVERYBODY hates toll booths, with good reason.
So let's not do manual toll collection. Here in San Diego, we have the "EZ Pass" system set up to use the toll lanes on some of the freeways, which is theoretically pretty painless, you just mount your pass in the windshield and it's scanned as you pass under the sensors. It's still a major pain. The scanner fails to register the pass and someone gets fined who shouldn't be, or someone in the next lane over gets scanned when he's not using the toll lane, the scanners don't work right in the rain....it's a fustercluck, but at least it's only for a few miles on a few freeways. Imagine those things set up everywhere you go. Also imagine the expense. It would be years or decades before we'd paid for all the scanners, and by that time the "fuel tax" problem will be completely obsolete.
Fuel taxes seemed like a pretty good solution for a pretty long time. The more you use the roads, the more you pay. Larger vehicles use more fuel as well, so there's at least some increased fee collection for vehicles with higher axle loads. It's also very easy to implement and collect, and hard to dodge. But then someone (okay, I'm going to get a lick in and say it probably WASN'T a liberal) observed that EVs don't pay fuel tax (never mind that we DO pay taxes on our electricity), and therefore "aren't paying their fair share". So how do we correct that? I know, let's give EV owners REDUCED electrical rates with one hand, to reward them for their forward thinking and for pushing ahead a desirable technology, and with the other hand, make them pay an extra charge when they register their vehicle, so they're "paying their fair share". Only a politician (whatever their ideology) could think that makes sense.
You can punch holes in any realistic system that can actually be implemented. Somebody pays too much, somebody pays too little. Short of the bazillion toll booth with sliding fees approach, I don't see a way to make it completely equitable. To MY way of thinking, it's as much about perceptions as it is about paying to maintain the roads. People get angry about rich people driving their Teslas and paying no taxes, and though I don't look at it that way, I understand their anger. Nobody's giving them a tax break for driving their old Ford F150, which is all they can afford to do. I can see the need for a small fee for EV owners to make it at least LOOK like we're not playing favorites. I also believe $100 is too high in the literal sense of making up for the fuel taxes we'd otherwise pay, but if the fee was realistically small, it would be laughed off...a $12 annual fee isn't going to change anybody's perceptions.
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While I have no objection to paying for road maintenance, however I have at least two complaints about this tax increase proposal. The first is that why should the fee be placed on each vehicle that you own, even if they are not traveling much on public road? I have a friend that collects old motorcycles and currently owns 22 bikes. He would get hit pretty hard paying an additional $100 or so each year just so he can ride them a few miles a month to keep them in running condition. That doesn't seem equitable. Just raising the gas tax higher so that you pay in relation to the number of miles traveled on the roadway seems more fair to me. Plus, the proposal to have a sliding scale so that the more your vehicle costs the more gas tax you pay also doesn't seem quite right. What does the cost of the vehicle have to do with maintaining the roads. (Tesla owners are really going to get hosed under this proposal.) Charging by the weight of the vehicle would seem more logical and that would even take into account "zero emission" vehicles not paying "gas" taxes.
Secondly, California has a reputation and a history of using a large proportion of road maintenance taxes for everything but road maintenance. Much of it tends to get dumped into the general fund to pay for social programs that are dear to the hearts of our legislators. The only time the state thinks about road maintenance is when they are thinking of a new way to raise taxes that the voters will support. Once they get their hands on the money it seems to vaporize somehow. And I am not alone. There is already push-back regarding this proposal from the public (at least the ones that own vehicles) who believes that our government should become more efficient and spend the money that they already collect more wisely.
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I have a friend that collects old motorcycles and currently owns 22 bikes. He would get hit pretty hard paying an additional $100 or so each year just so he can ride them a few miles a month to keep them in running condition.
Wisconsin has a non-expiring "Collector Plate" All motor vehicles 20 years or older that the body has not been altered from the original. Costs 2x an annual but never expires. You must have a second fully licensed vehicle, and they are not valid in January. So in Wisconsin 1st Motorcycle collector plate is $123 and second and subsequent is $23. Your friends fleet of 21 would be $583 and never renew. Antiques (pre-1945) are only $5.
Don't be frightened but 20 years ago is only 1997. (I was wierded out just least year when I found my '79 Harley qualified)
It may be a while before Zeros earn "Collector" status... Lectra is a lock already.
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Wisconsin the first 1,000 gallons of BioDiesel self produced for self use is road tax exempt. (provided none is sold)
Through 2016 there was a $1.00/gallon biodiesel tax credit for the person SELLING the fuel, which by memory math is $0.30 free and clear.
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It was not legislatively uncomfortable at account for Collectors not driving more than one at a time, or for people producing their own fuel.
The dozens of other fuel tax and road tax exemptions that have been palatable and on the books for ages merit reconsideration before ZERO EMISSIONS is burdened.
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Norway has highest EV ownship.
https://en.wikipedia.org/wiki/Plug-in_electric_vehicles_in_Norway (https://en.wikipedia.org/wiki/Plug-in_electric_vehicles_in_Norway)
Among the existing government incentives, all-electric cars and vans are exempt in Norway from all non-recurring vehicle fees, including purchase taxes, and 25% VAT on purchase
Yes there is some pushback and ongoing reconsideration, but let Norway stand as a benchmark for reversing incentives... once the US is the leader in EV ownership then reconsider aggressive incentives... and not before.
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I only have 3 words to sum up this bs from Brown and the legislature in Sacramento.
Bullet Train Debacle.
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The bill was approved last night by the state legislature and will be signed into law by the Governor today. This includes the $100 yearly increase in EV licensing fees. The fee increases are permanent and will be adjusted for inflation in the future.
However, in order to get the tax approved in the senate, one republican legislator from the central valley was promised that $500,000,000 from the gas tax money will be spent in his legislative district. It was also mentioned that a San Francisco Senator managed to get the Bay Area public transit portion of the funds tripled over what had originally been proposed. Also, the trucking industry was "paid off" with a provision that would delay the implementation of truck smog controls for many years into the future.
I am concerned about how much of this tax increase will actually end up fixing our roads, as a lot of "pork" seemed to be stuffed into the package in order to get it passed. No word if the Governor's favorite High Speed Rail (to nowhere) project is going to be able to tap into this money, but I wouldn't be surprised if that was the case.
Any restriction on spending the tax increase only on roads and other projects mentioned in the law would depend upon a state constitutional amendment, which would have to be approved be the voters and that wouldn't occur before 2018. Plus the state legislators wrote the proposed constitutional amendment language and who knows what that says? Apparently there were a lot of people, including the press, that didn't really know what was in the law, other than what the Governor's press releases said.
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My newspaper today had an article that provided more details regarding the tax increase law and how it managed to get passed. The Republican Senator that swung the deal was Anthony Cannella, of Ceres in the Central Valley. He received a half-billion dollars in SB132. It will be going toward the extension of the Altamont Corridor Express train, which will connect to his town of Ceres and the city of Merced to San Jose. He is also getting a new parkway project between the UC Merced campus and Highway 99.
The legislators also amended a budget trailer bill to give $427 million in transpiration funding to Riverside County, home of two other swing voters: Senator Richard Roth and Assembly-woman Sabrina Cervantes, both Democrats representing Riverside to help secure their votes. More money that will not be going to repair our highways.
The article said that 3/4 of people surveyed by a recent UC Berkeley poll said that they were opposed to higher vehicle license fees, while 63% opposed a gas tax hike. Apparently, our state government representatives could care less what the public wants - as long as they get money to spend on their favorite projects and can have a plaque that will memorialize their names as the "sponsor" of the boondoggle.
I am struck by the concept that almost a billion dollars of our tax dollars is going to buy the votes of three of our legislators so that they can raise our taxes that will then go toward paying for their bribes. There is something wrong about this system. >:(
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I only have 3 words to sum up this bs from Brown and the legislature in Sacramento.
Bullet Train Debacle.
California took the deal after Florida wisely backed out: https://en.m.wikipedia.org/wiki/Florida_High_Speed_Corridor
Sent from my Z981 using Tapatalk
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From the CA SB1 bill text, it looks like ALL vehicles will get hit with a new $25 - $175 additional registration fee called the "Transportation Improvement Fee" starting 1/1/2018, but the EV $100 fee only applies to model year 2020 or later vehicles:
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The bill would provide for the deposit of various funds for the program in the Road Maintenance and Rehabilitation Account, which the bill would create in the State Transportation Fund, including revenues attributable to a $0.12 per gallon increase in the motor vehicle fuel (gasoline) tax imposed by the bill with an inflation adjustment, as provided, 50% of a $0.20 per gallon increase in the diesel excise tax, with an inflation adjustment, as provided, a portion of a new transportation improvement fee imposed under the Vehicle License Fee Law with a varying fee between $25 and $175 based on vehicle value and with an inflation adjustment, as provided, and a new $100 annual vehicle registration fee applicable only to zero-emission vehicles model year 2020 and later, with an inflation adjustment, as provided. The bill would provide that the fuel excise tax increases take effect on November 1, 2017, the transportation improvement fee takes effect on January 1, 2018, and the zero-emission vehicle registration fee takes effect on July 1, 2020.
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From the CA SB1 bill text, it looks like ALL vehicles will get hit with a new $25 - $175 additional registration fee called the "Transportation Improvement Fee" starting 1/1/2018, but the EV $100 fee only applies to model year 2020 or later vehicles:
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The bill would provide for the deposit of various funds for the program in the Road Maintenance and Rehabilitation Account, which the bill would create in the State Transportation Fund, including revenues attributable to a $0.12 per gallon increase in the motor vehicle fuel (gasoline) tax imposed by the bill with an inflation adjustment, as provided, 50% of a $0.20 per gallon increase in the diesel excise tax, with an inflation adjustment, as provided, a portion of a new transportation improvement fee imposed under the Vehicle License Fee Law with a varying fee between $25 and $175 based on vehicle value and with an inflation adjustment, as provided, and a new $100 annual vehicle registration fee applicable only to zero-emission vehicles model year 2020 and later, with an inflation adjustment, as provided. The bill would provide that the fuel excise tax increases take effect on November 1, 2017, the transportation improvement fee takes effect on January 1, 2018, and the zero-emission vehicle registration fee takes effect on July 1, 2020.
That certainly wasn't made clear in the newspaper articles that I have read. Even today, a short article mentioned that the EV fee would take effect in 2020. But not one time has there been any mention that it applies to electric vehicles purchased on July 1, 2020. However that sounds like good news to me, assuming that the powers-that-be actually read that section of the law. ::) I still plan to purchase a 2018 Zero next year and if the EV fee will not take effect for vehicles sold prior to 2020 then that will save me some nice coin each year - although I will still get stung by the general increase in vehicle license fees. :(
Thanks bikerscooby for the information and clarification. I am feeling better already. :)