Mileage based tax

What,... you think they are going to use this tax for roads?? Just another tax for everyone... Lots more coming,... get ready.

 

A mileage based tax is the most fair approach though. You don't drive a lot, you don't pay a lot. You drive a ton, it's going to cost more. Just fair.

 

So would you have to go get your odometer officially read by a government official at tax time?

 

Usually they would do it at registration/renewal time I guess.

 

This road tax is supposed to help pay for the upcoming $3 trill infrastructure bill. What % or dollars do you think will actually go to roads and bridges?

 

Roads need to be payed for, and electric cars shouldn't be exempt. It makes sense to start with a mileage tax on electric vehicles and leave the gas powered ones to pay at the pump. Unfortunately, hybrid and PHEV cars are caught in the middle.

The fight is how much per mile is fair. How do you collect the fee. What do you do to folks who don't pay.

 

And how do you handle inoperative odometers (one of my vehicles has been reading 189,000ish miles for a decade and a half), people who will roll them back or temporarily disable them, etc? It's hard to avoid a gas tax. Require a hubometer on every vehicle? The privacy concerns would make many refuse a GPS-based system.

I don't have the answers, but agree that there needs to be equity in sharing road costs.

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Then I would assume a standard would be charged. However I don't think model odometers are as prone to die as the old ones.

 

One option would be to offer a yearly amount or a GPS option.

A yearly amount is going to be difficult for low income folks and a GPS option may also be an issue for those without a computer or low income.

Finding anything that is as good as pay at the pump is a tough nut to crack.

However, I think the horse is out of the barn with privacy concerns now that AI facial recognition is becoming more and more wide spread.

 

In New Zealand there is already a kilometers-based system for all non-gasoline vehicles where you pay in advance. For light vehicles it currently costs $76/1000 km, increasing for trucks as weight increases by about the 3rd power, with a deduction for additional axles. Road wear in general is considered to increase as the 4th power by weight, the 3rd power rate allows that some portion of the costs are non-wear related.

You buy blocks of kilometers at a post shop or online and place the printed small card (business-card sized) in a holder in the windscreen. It's based on your odometer reading for light vehicles, hubodometers for heavy.

No doubt some people try to get around the system but it's not taken lightly if you get caught as it's considered tax evasion. Since we have annual (initially triennial for new cars) safety inspections it will be noticed if the odometer has not advanced in line with wear and tear. You're even taking a risk by forgetting to keep up with your odometer, but it'll only be a nominal fine if you have reasonable excuse.

BEVs and PHEVs have had a full exemption for many years now, due to expire at the end of 2021.

I worked out yesterday that my cost of doing a 300 km trip will go from 14% that of an ICE, to 54%. That's based on 20 cents/kWh and $2.20/litre. If public chargers are used for that trip the cost will be on par with gasoline.

 

In South Carolina EVs are already paying a pretty close fair share, based on my own unscientific estimate. I took the past couple years of actual money spent on gas (excluding 2020 Covid numbers) and applied the current average gas price per gallon (not completely accurate, I know, with fluctuating gas prices). I arrived at a yearly estimate of gallons used per ICE car in my house and multiplied that by the $0.26 tax per gallon. This gave me $63 per year gas tax per ICE. SC charges $60 per year "road use fee" per EV. So those are pretty close.

Given the current poor state of the roads and bridges in my state, I am not in any way saying that the tax money is being properly used! But at least they are keeping ICE and EVs on the same playing field for tax purposes. And it shows that a fee based system (not mileage) could still be applied without the gas tax.

 

However, it's not a fair tax for everyone. If you drive more than average like a Lift driver, you gain. If you drive less than average like a retiree, you lose.

 

Cars for the last 15 years or more have electronic odometers. While some can be disconnected you usually lose the entire cluster[no speedo, gas gauge etc] If you go to sell your car carfax will flag unusual mileage issues. Not saving any money if your car is worth less in the end. With all the gov't owned plate readers around it will eventually be impossible to totally cheat on mileage.

 

I'm probably on the outside with this but the way I see it, roads are an essential part of social infrastructure and everyone benefits even if you don't own a car. How do you think your groceries got to the store? Whether you take a taxi or public transit you're riding on those roads. The ambulance that comes to pick you up after a heart attack will use those roads.

While there are dedicated fuel taxes in most jurisdictions there is not a dedicated separate account into which these funds are placed. They just go into general revenues and a portion may be set aside in a budget. So let's do away with the pretense and fund roads out of a budget set up as a line item in the overall spending. By all means put an extra tax on fossil fuels to discourage their use.

Placing a tax on EVs which makes them as expensive to operate per distance as gasoline vehicles is not a good way to promote EV adoption.

 

Mileage tax should be a replacement for registration fees on EVs not an addition to it. I suggested this as a solution when EV owners were getting taxed hundreds of dollars. Also the mileage tax must come with limitations on how much can be taxed and what the government can do with the money.

It's all useless if the people are burdened with taxes and the government is using the taxes for something other than infrastructure.