3 ms·

I agree with TFA’s premise, but some of the specific arguments present are faulty. Flat vehicle registration fees Excise tax is not flat, and sometimes a luxu

by zaroth 8y ago

I agree with TFA’s premise, but some of the specific arguments present are faulty. Flat vehicle registration fees Excise tax is not flat, and sometimes a luxury tax on top even makes it progressive. These are registration fees paid to the town instead of the state. The storm sewer subsidy The complaint here is that pollution is contributed by commuters / travelers but cleanup is paid by locals. The travelers polluting city storm water sewers are paying taxes in the city when they do business in the city, which is why they are using the roads. If there was no reason to come to the city, there would be a lot less stormwater pollution but also a lot less commerce and the city would be worse off. Insurance rates The fact that everyone pays for their own insurance means that is it not a tax. If we subsidized insurance based on income, then insurance would effectively be an income tax. Which, by the way, is true for health insurance. Gasoline and gas taxes Are meant to cover (part of) the externalities of driving. The same as the congestion tax the article is supporting. By covering the externality we discourage the polluting activity, which is equitable to be done for everyone who is polluting, regardless of income. EV tax credits If we want these (cheaper, more economical, cleaner, safer) cars to become available in the mass market, there is a multi-billion dollar R&D hill to climb. Economies of scale for li-ion and electric drivetrains do not materialize overnight. Getting rich people to spend $60-$100k on a new toy to fund this endeavor, by providing a $7500 carrot, benefits the poor and middle class in the long run. Hell, it benefits the whole planet in the long run. The rich people are putting up a lot more capital than the Federal government in this equation to make mass scale EV a reality. This is a huge win and to say it is inequitable totally misses the point of the subsidy.

CydeWeys 8y ago
And clearly gasoline taxes aren't high enough if trucks and SUVs are the best-selling vehicles in the US. The effect of higher gasoline taxes wouldn't be higher taxes overall in many cases, it would simply mean people driving smaller, more fuel-efficient vehicles.
reitzensteinm 8y ago
Converting a single gas car to a plug in hybrid has three times the impact of converting a hybrid to pure BEV, and the former is cheaper. All of the economies of scale you get from BEVs you get from hybrids. If every car were a hybrid, an immense amount of lithium batteries would be required, vastly more than we use today. It's hard to see the $7500 tax credit as little more than a gift to the rich, who can buy a Tesla because it's cool and virtue signal about being environmental. It's certainly not an example of thoughtful legislation. I live in Australia, where I use public transport almost exclusively (Ubers filling the gaps). We don't subsidize Teslas here, which I've heard friends bemoan, but it makes me happy. The money is better off being spent elsewhere. https://www.ucsusa.org/clean-vehicles/electric-vehicles/ev-emissions-tool https://www.ucsusa.org/clean-vehicles/electric-vehicles/ev-e...
- zaroth 8y ago
  The credit applies to both PHEV and EVs. It’s based on the kWh capacity of the battery.
  - reitzensteinm 8y ago
    Right, so a Prius plug-in hybrid gets a $2500 tax credit, whereas a Tesla gets $7500. If the idea is to build an economy of scale for electrification of vehicles, I don't believe this makes sense. Pushing hard to make everything hybrid would do a lot more good.
    - zaroth 8y ago
      There are PHEVs with batteries big enough to claim the full $7,500. By definition they will be luxury cars because batteries that big are really expensive. But batteries that big are also an order of magnitude less expensive than about 10 years ago. The benefits of battery scaling accrues to everyone, even the small PHEVs and plain old hybrids. The credit is based on how much battery you are buying. The Feds pitch in about 10-15% of the capital and the consumer pays the rest. This is a great force multiplier for a gov’t subsidy program which gets $10b in EV revenue stimulus for every $1b invested. A bigger subsidy for cheaper cars would be an interesting welfare program (why buy cars for poor people though, versus just giving free public transit passes?) but it wouldn’t achieve the force multiplier of encouraging consumer spending the way the current subsidy does by only paying 10-15% of the cost, and paying more the bigger the battery, not just more based on the price of the vehicle. There’s also a lot of infrastructure that you don’t really incentivize (like large scale charging infrastructure) if everything is just plain hybrid, because there’s not enough consumer demand for plugs everywhere. Getting EV above 1% starts tipping the scales to encourage places to install chargers. More chargers allows that next 1% to adopt that much easier. The richer early adopters can afford the inconvenience of a $5k electrical upgrade to their garage, or going out of their way to charge, etc. They are paving the way toward mass adoption. Just a few years ago EVs were decried as entirely impractical and novelties. Now I have one as my daily driver and I would never imagine going back. Hybrids are nice but EV is a paradigm shift. I’m glad the subsidy targets battery capacity and the future it envisions.
kspaans 8y ago
The stormwater surcharge also help to nudge people whose property may contribute to excess runoff: large driveways, paved yards, larger houses, etc. This is currently a big problem in Toronto where flooding often occurs downtown (closer to the lake) during and after storms, largely due to houses further out and in the suburbs that have paved their front and back yards to make driveways.
anonuser123456 8y ago
I disagree with this point: >The travelers polluting city storm water sewers are paying taxes in the city when they do business in the city, which is why they are using the roads. If there was no reason to come to the city, there would be a lot less stormwater pollution but also a lot less commerce and the city would be worse off. This is in effect a cross subsidy, making it hard to rationally price pollution. Usage based pricing / taxes are more efficient here. It would be better to lower city taxes and raise road taxes to reflect the cost of pollution. Then, people would either a) drive less or b) drive less polluting vehicles or c) pay the full price of cleanup. The argument that there is 'more commerce' doesn't hold. If city business (and residents) are subsidizing consumers (e.g. paying for their pollution), the cost of doing business goes up in the city and thus producers have to charge higher prices, reducing consumption. There is no free lunch here unless you steal it from a 3rd party, and in the case of city budgets there is little in the way to prevent that.
- zaroth 8y ago
  People come to your city to do business there. If a lot of people do business in your city, a lot of people will be coming in and out of town every day. Complaining that the people who come to your city to do business (spend their money) are poluting a bit with their cars while they are there, and the cost of that pollution is unfairly borne by city dwellers I think is bizarre, because the benefits of those people coming into the city and spending all that money (which generates jobs and tax revenue, etc.) accrues to the city. The city is already being paid a very hefty return on the cost of cleaning up the pollution of people traveling into the city every day. The city would not want to discourage people from making the trip! Maybe more succinctly, the polluter is already paying the city more than enough to cover the cost of cleaning up the car pollution, by nature of the money they are spending while they are in the city.
  - pas 8y ago
    it's not about rentability, it's about fairness. this is a subsidy in favor of those, who pollute by car, while usually those are the people who could pay for it easily. of course, it's possible that if a city is at the same time both relies heavily on car based tourism/shoppers and its demography is dominantly carless poor people, then in this case probably they would get more poorer by introducing a car usage fee.

by zaroth 8y ago

CydeWeys 8y ago

And clearly gasoline taxes aren't high enough if trucks and SUVs are the best-selling vehicles in the US. The effect of higher gasoline taxes wouldn't be higher taxes overall in many cases, it would simply mean people driving smaller, more fuel-efficient vehicles.

reitzensteinm 8y ago

Converting a single gas car to a plug in hybrid has three times the impact of converting a hybrid to pure BEV, and the former is cheaper. All of the economies of scale you get from BEVs you get from hybrids. If every car were a hybrid, an immense amount of lithium batteries would be required, vastly more than we use today. It's hard to see the $7500 tax credit as little more than a gift to the rich, who can buy a Tesla because it's cool and virtue signal about being environmental. It's certainly not an example of thoughtful legislation. I live in Australia, where I use public transport almost exclusively (Ubers filling the gaps). We don't subsidize Teslas here, which I've heard friends bemoan, but it makes me happy. The money is better off being spent elsewhere. https://www.ucsusa.org/clean-vehicles/electric-vehicles/ev-emissions-tool https://www.ucsusa.org/clean-vehicles/electric-vehicles/ev-e...

zaroth 8y ago
The credit applies to both PHEV and EVs. It’s based on the kWh capacity of the battery.
- reitzensteinm 8y ago
  Right, so a Prius plug-in hybrid gets a $2500 tax credit, whereas a Tesla gets $7500. If the idea is to build an economy of scale for electrification of vehicles, I don't believe this makes sense. Pushing hard to make everything hybrid would do a lot more good.
  - zaroth 8y ago
    There are PHEVs with batteries big enough to claim the full $7,500. By definition they will be luxury cars because batteries that big are really expensive. But batteries that big are also an order of magnitude less expensive than about 10 years ago. The benefits of battery scaling accrues to everyone, even the small PHEVs and plain old hybrids. The credit is based on how much battery you are buying. The Feds pitch in about 10-15% of the capital and the consumer pays the rest. This is a great force multiplier for a gov’t subsidy program which gets $10b in EV revenue stimulus for every $1b invested. A bigger subsidy for cheaper cars would be an interesting welfare program (why buy cars for poor people though, versus just giving free public transit passes?) but it wouldn’t achieve the force multiplier of encouraging consumer spending the way the current subsidy does by only paying 10-15% of the cost, and paying more the bigger the battery, not just more based on the price of the vehicle. There’s also a lot of infrastructure that you don’t really incentivize (like large scale charging infrastructure) if everything is just plain hybrid, because there’s not enough consumer demand for plugs everywhere. Getting EV above 1% starts tipping the scales to encourage places to install chargers. More chargers allows that next 1% to adopt that much easier. The richer early adopters can afford the inconvenience of a $5k electrical upgrade to their garage, or going out of their way to charge, etc. They are paving the way toward mass adoption. Just a few years ago EVs were decried as entirely impractical and novelties. Now I have one as my daily driver and I would never imagine going back. Hybrids are nice but EV is a paradigm shift. I’m glad the subsidy targets battery capacity and the future it envisions.

kspaans 8y ago

The stormwater surcharge also help to nudge people whose property may contribute to excess runoff: large driveways, paved yards, larger houses, etc. This is currently a big problem in Toronto where flooding often occurs downtown (closer to the lake) during and after storms, largely due to houses further out and in the suburbs that have paved their front and back yards to make driveways.

anonuser123456 8y ago

I disagree with this point: >The travelers polluting city storm water sewers are paying taxes in the city when they do business in the city, which is why they are using the roads. If there was no reason to come to the city, there would be a lot less stormwater pollution but also a lot less commerce and the city would be worse off. This is in effect a cross subsidy, making it hard to rationally price pollution. Usage based pricing / taxes are more efficient here. It would be better to lower city taxes and raise road taxes to reflect the cost of pollution. Then, people would either a) drive less or b) drive less polluting vehicles or c) pay the full price of cleanup. The argument that there is 'more commerce' doesn't hold. If city business (and residents) are subsidizing consumers (e.g. paying for their pollution), the cost of doing business goes up in the city and thus producers have to charge higher prices, reducing consumption. There is no free lunch here unless you steal it from a 3rd party, and in the case of city budgets there is little in the way to prevent that.

zaroth 8y ago
People come to your city to do business there. If a lot of people do business in your city, a lot of people will be coming in and out of town every day. Complaining that the people who come to your city to do business (spend their money) are poluting a bit with their cars while they are there, and the cost of that pollution is unfairly borne by city dwellers I think is bizarre, because the benefits of those people coming into the city and spending all that money (which generates jobs and tax revenue, etc.) accrues to the city. The city is already being paid a very hefty return on the cost of cleaning up the pollution of people traveling into the city every day. The city would not want to discourage people from making the trip! Maybe more succinctly, the polluter is already paying the city more than enough to cover the cost of cleaning up the car pollution, by nature of the money they are spending while they are in the city.
- pas 8y ago
  it's not about rentability, it's about fairness. this is a subsidy in favor of those, who pollute by car, while usually those are the people who could pay for it easily. of course, it's possible that if a city is at the same time both relies heavily on car based tourism/shoppers and its demography is dominantly carless poor people, then in this case probably they would get more poorer by introducing a car usage fee.