GCR: Could an "electric fuel" tax for EV use help states solve the gas-tax dilemma?

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GRA

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https://www.greencarreports.com/new...-ev-use-help-states-solve-the-gas-tax-dilemma


The gas tax remains one of the main funding sources for road infrastructure, which has led to cries that electric-car drivers aren't paying their fare share of road maintenance costs. Minnesota's solution? Consider electricity a fuel.

A new bill circulating through the Minnesota legislature calls for an "electric fuel" tax for EVs. It even calls utilities and charging networks "electric fuel dealers," and lays out an amount of 5.1 cents per kwh—several dollars per each charge of longer-range EVs. If adopted, Minnesota would tax electricity used to charge electric cars as fuel, reports the St. Cloud Times. . . .


Weight-based per-mile fees would seem to be the fairest way to go, but implementing that would be difficult and no doubt expensive, or else involve privacy issues if real-time monitoring were the norm.
 
There are already numerous different taxes included in residential and commercial electricity rates. 5.1 cents per kWh would be rather excessive compared to present petroleum road tax rates and would require separate metering for car charging. If something like this were implemented, then there should be no other taxes included in the electricity rates for car charging meters and no other fees (such as meter reading fee or basic service charge) since the taxing authority (local, state, and/or federal) would be dictating that homeowners have two meters.
 
Yet again, the brilliant political move of never officially figuring out how to pay for anything (because to do so would make everyone angry) results in frustration.
 
GerryAZ said:
There are already numerous different taxes included in residential and commercial electricity rates. 5.1 cents per kWh would be rather excessive compared to present petroleum road tax rates and would require separate metering for car charging. If something like this were implemented, then there should be no other taxes included in the electricity rates for car charging meters and no other fees (such as meter reading fee or basic service charge) since the taxing authority (local, state, and/or federal) would be dictating that homeowners have two meters.

Sounds like a typical MN boondoggle to me :roll: In MN we already get the privilege of paying far more taxes owning an EV than it would cost if we just had a similar-sized ICE car as the Leaf, a $75 "EV" tax on our tabs which doesn't sound like a lot but when I figured out just how many miles I'd have to drive to make the $75 compared to our gas tax, it was in excess of 20k miles/year, we drive our '12 Leaf around 5k miles/year and '13 maybe 7k/year :( Our MN "EV" tax is one of the considerations we took into account when we ordered our next vehicle, a PHEV, which so far are not taxed like a full EV, way to go MN on promoting ICE vehicles :x Note these taxes are coming from the same dick weeds(IRs) who fight increasing the gas tax every year, I say put a $2/gallon gas tax, which is still far less than what say Norway pays and Norway can even afford to give credits for purchasing and owning EVs.
 
Tennessee charges an extra $100 for an EV and it was going to be $1,000 a year (not a typo) before Nissan stepped in (along with other lobby groups) and at least got it down to only a semi-insane charge. Nissan HQ is here in my city. :(
 
knightmb said:
Tennessee charges an extra $100 for an EV and it was going to be $1,000 a year (not a typo) before Nissan stepped in (along with other lobby groups) and at least got it down to only a semi-insane charge. Nissan HQ is here in my city. :(

That's crazy! unless you have a very high gas tax in TN. It's pretty easy to figure out how much local gas taxs you'd pay for an equivalent ICE car. First figure out what MPG a similar-sized ICE vehicle would get, in my case I used a Nissan Versa, which I've always considered kind of an ICE cousin to the Leaf. I figured an average 30MPG for the Versa, which is about what I think I'd get under my driving circumstances, Next figure out how many miles/year you drive, this is where I get killed with and sort of blanket EV tax as I only drive my Leafs 5-7k/year. Now if you wanted to figure on more a national average I suppose you could use 12k/yr but at least in my case putting 12k/year on a Leaf that only has a 60-mile range would be pretty damn hard, I'd have to be either driving it or charging it near constantly, not like an ICE vehicle where I could say make a 1000 mile road trip in just a few days.
OK so in my case figuring 5k/year and getting 30mpg average I'd be purchasing 166 gallons of fuel and at my states 28.6c/gallon I'd be paying a little under $50/year in MN gas taxes. Now if you drive 10k/year that would double to $100/year and if you for whatever reason compared your Leaf to a vehicle getting 15mpg like a pickup, well again it would double things but I think 30mpg is a good number. Not the 40+ MPG we average on our Prius, which is what I'd probably be driving more if not for the Leaf but for fairness I like 30.

My state doesn't have any toll roads and I and most people seem to like that but if A-holes want to jack up EV taxes to unfair levels then I guess I'd be for toll roads, that or the best tax, a user tax where you pay on miles driven although that might be hard to implement and also I'd like to take into account GVW which is a major contributor to road wear and tear, similar to what Europe uses I believe.
Note us EV drivers are far easier on a majority of things that overall save money for everyone so if anything I feel ICE drivers should be paying us to drive EVs, not creating unfair taxes to cost us even more, but maybe thats just me. I'm personally OK with paying a similar tax as ICE drivers to keep our roads in good shape, just not more as many states including mine do.
 
A home electricity surcharge would be very messy. Much easier to do at DC charging stations. If you moved the cost of EA from .31 to .35 per kWh, year it would be frustrating, but not a deal breaker.

As most ev charging is at home, much easier to habe self attestation of your car mileage and tax that for all car types.
 
DougWantsALeaf said:
A home electricity surcharge would be very messy.

Why, in the US municipal substation tax is already charged on every kwhr produced to the power operator and its charged at far higher rates than gas taxes.

In Rhode Island $75 a month of your electric Bill is secretly because of this tax charged to the power operator .


There is actually absolutely no reason to charge annual registration taxes to individuals and in reality they are only meant to cover the notory costs of the plate.

The vast majority of road funding does not come from fees, tolls or gas tax.

There are billions of dollars spent every year to collect these road fees that could be eliminated if we went to permanent license plates when you buy the car .

I would support eliminating inefficient fees and instead fund roads like any other public good from general funds.

When you collect road fee let alone increase them
there is no way to prevent regressive taxation, misappropriation, or even downright graft and corruption which is so common it rarely makes the news anymore.
If we do not create specific road funds it forces politicians to be responsible for actually fixing roads and working within existing funding sources.
If they don’t have the scapegoat of the road funding issue (which they control) they can get voted out when they decide not to fix roads. When we have special road taxes they can perpetually not budget correctly and blame lack of funding when they already control where all funding sources go.

No road tax, no scape goat to blame for not budgeting correctly

That said, the only “road tax” that is actually effective is gas tax which is over 99% efficient at collection, fees at best are only at best 50% effective and drive a lot of legal costs and policing issues,
and has been proven repeatedly during this pandemic fees are excellent at preventing poor people or the recently unemployed from owning and driving a car legally.
Some areas have had the number of plateless and expired registrations triple in the last year.

License and registration is the first thing you won’t pay when you are broke
(along with car insurance in many cases)
 
Gasoline or road tax perhaps made sense in the early 20th century when vehicle ownership was a rarity and nice paved roads were seen as a perk for the well-to-do. Today everyone depends upon and benefits from the road and highway infrastructure, regardless of how much time they do or do not spend driving a car.
 
Nubo said:
Gasoline or road tax perhaps made sense in the early 20th century when vehicle ownership was a rarity and nice paved roads were seen as a perk for the well-to-do. Today everyone depends upon and benefits from the road and highway infrastructure, regardless of how much time they do or do not spend driving a car.
Taxing road users for the upkeep of roads is an old idea, going back to at least the 12th Century, and perhaps before.

Adam Smith, Wealth of Nations, 1776, argues for a tax based on weight, and for a higher rate on luxury travelers.

When the carriages which pass over a highway or a bridge, and the lighters which sail upon a navigable canal, pay toll in proportion to their weight or their tonnage, they pay for the maintenance of those public works exactly in proportion to the wear and tear which they occasion of them. It seems scarce possible to invent a more equitable way of maintaining such works. This tax or toll too, though it is advanced by the carrier, is finally paid by the consumer, to whom it must always be charged in the price of the goods. As the expense of carriage, however, is very much reduced by means of such public works, the goods, notwithstanding the toll come cheaper to the consumer than the; could otherwise have done; their price not being so much raised by the toll as it is lowered by the cheapness
of the carriage. The person who finally pays this tax, therefore, gains by the application more than he loses by the payment of it. His payment is exactly in proportion to his gain. It is in reality no more than a part of that gain which he is obliged to give up in order to get the rest. It seems impossible to imagine a more equitable method of raising a tax. When the toll upon carriages of luxury upon coaches, post-chaises, etc., is made somewhat higher in proportion to their weight than upon carriages of necessary use, such as carts, waggons, etc., the indolence and vanity of the rich is made to contribute in a very easy manner to the relief of the poor, by rendering cheaper the transportation of heavy goods to all the different parts of the country.
 
WetEV said:
Nubo said:
Gasoline or road tax perhaps made sense in the early 20th century when vehicle ownership was a rarity and nice paved roads were seen as a perk for the well-to-do. Today everyone depends upon and benefits from the road and highway infrastructure, regardless of how much time they do or do not spend driving a car.
Taxing road users for the upkeep of roads is an old idea, going back to at least the 12th Century, and perhaps before.

Exactly. I omitted turnpikes and bridge trolls in the interest of brevity in describing the anachronism.

Adam Smith, Wealth of Nations, 1776, argues for a tax based on weight, and for a higher rate on luxury travelers.

When the carriages which pass over a highway or a bridge, and the lighters which sail upon a navigable canal, pay toll in proportion to their weight or their tonnage, they pay for the maintenance of those public works exactly in proportion to the wear and tear which they occasion of them. It seems scarce possible to invent a more equitable way of maintaining such works. This tax or toll too, though it is advanced by the carrier, is finally paid by the consumer, to whom it must always be charged in the price of the goods. As the expense of carriage, however, is very much reduced by means of such public works, the goods, notwithstanding the toll come cheaper to the consumer than the; could otherwise have done; their price not being so much raised by the toll as it is lowered by the cheapness
of the carriage. The person who finally pays this tax, therefore, gains by the application more than he loses by the payment of it. His payment is exactly in proportion to his gain. It is in reality no more than a part of that gain which he is obliged to give up in order to get the rest. It seems impossible to imagine a more equitable method of raising a tax. When the toll upon carriages of luxury upon coaches, post-chaises, etc., is made somewhat higher in proportion to their weight than upon carriages of necessary use, such as carts, waggons, etc., the indolence and vanity of the rich is made to contribute in a very easy manner to the relief of the poor, by rendering cheaper the transportation of heavy goods to all the different parts of the country.
[/quote]
With all due respect to the Invisible Hand, Smith discounts that the whole of society benefits from the public works and not just those involved directly at any particular point in time. For a road to be there when you need it, it must also exist while you don't need it.
If social equity is a goal, adjusting the general tax code is a far sharper instrument than vehicle weight. And certainly far better than taxing consumption of gasoline which tends to be regressive in this day and age.
 
Nubo said:
With all due respect to the Invisible Hand, Smith discounts that the whole of society benefits from the public works and not just those involved directly at any particular point in time. For a road to be there when you need it, it must also exist while you don't need it.
If social equity is a goal, adjusting the general tax code is a far sharper instrument than vehicle weight. And certainly far better than taxing consumption of gasoline which tends to be regressive in this day and age.
Oddly, you might want to read more Adam Smith.

The expense of maintaining good roads and communications is, no doubt, beneficial to the whole society, and may, therefore, without any injustice. be defrayed by the general contribution of the whole society.
 
Nubo said:
...Today everyone depends upon and benefits from the road and highway infrastructure, regardless of how much time they do or do not spend driving a car.
Agree and for those who don't drive a car, they purchase goods and rely on services driven on roads. The only thing with no road tax, I wonder is how society could have dis-incentives for large(both HP and weight) polluting/inefficient vehicles(or maybe there isn't a need to??).......maybe make tabs for vehicles based not only on original MSRP(as my state does) but also take into account weight, which my state doesn't for anything under 1-ton payload?. In my state, 3/4 ton pickups are taxed like cars, just on value but 1-ton and above have more expensive tabs.
We don't have toll roads in MN so I'm not sure how to handle them, I can kind of see a toll road for say a bridge that only goes to a limited number of people but for through-fairs, it seems more an annoyance than anything else, I wonder just how much of the money goes to the roads vs how much goes to the bureaucracy involved in collecting and counting the money.....
 
WetEV said:
Nubo said:
With all due respect to the Invisible Hand, Smith discounts that the whole of society benefits from the public works and not just those involved directly at any particular point in time. For a road to be there when you need it, it must also exist while you don't need it.
If social equity is a goal, adjusting the general tax code is a far sharper instrument than vehicle weight. And certainly far better than taxing consumption of gasoline which tends to be regressive in this day and age.
Oddly, you might want to read more Adam Smith.

The expense of maintaining good roads and communications is, no doubt, beneficial to the whole society, and may, therefore, without any injustice. be defrayed by the general contribution of the whole society.

I was responding to the previous quote you posted ("...impossible to imagine a more equitable method of raising a tax"). That he contradicts himself elsewhere is good.
 
Nubo said:
WetEV said:
Nubo said:
With all due respect to the Invisible Hand, Smith discounts that the whole of society benefits from the public works and not just those involved directly at any particular point in time. For a road to be there when you need it, it must also exist while you don't need it.
If social equity is a goal, adjusting the general tax code is a far sharper instrument than vehicle weight. And certainly far better than taxing consumption of gasoline which tends to be regressive in this day and age.
Oddly, you might want to read more Adam Smith.

The expense of maintaining good roads and communications is, no doubt, beneficial to the whole society, and may, therefore, without any injustice. be defrayed by the general contribution of the whole society.

I was responding to the previous quote you posted ("...impossible to imagine a more equitable method of raising a tax"). That he contradicts himself elsewhere is good.
Most good economists have two hands. Or more. :roll:
 
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