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Victoria follows South Australia and imposes electric car road tax

255 points by oxplot 6y ago

mullingitover 6y ago
These moves always come out of some sense of unfairness about electric vehicles not paying gasoline tax. However, we want people to stop using gasoline, and it makes no sense to punish people for doing a net good thing for society by abandoning ICE vehicles. To truly make a fair system, the payments for road maintenance should be proportional to the damage done to the road by the vehicle. Thus, fees should scale exponentially with vehicle weight. This of course would make road freight very expensive, and that's a good thing, because freight should be shipped on roads as little as possible. Freight should be shipped by rail until the last possible mile.
- abnry 6y ago
  > Thus, fees should scale exponentially with vehicle weight. Work is force times distance. You have to factor in how much the vehicle is on the road, and the gas used is a decent proxy measure of that.
- war1025 6y ago
  I believe road wear is calculated as the 4th power of axle weight. Trucks have many axles to distribute the load, and are forced to stop at weigh stations to verify that they are within weight requirements. As far as road tax, the current system works pretty fairly for ICE engines, in my opinion. The larger the vehicle, the more powerful the engine, and thus the lower the efficiency. So semis are paying higher road tax than a little sub-compact car. Also, the more you drive, the more fuel you use, which means the more road tax you end up paying. With an electric car, the incentives are all out of whack. Roads don't wear less just because you have an electric motor turning your wheels. There is a similar issue with home solar panel installs. Utilities factor maintenance costs in as a part of their kwh rates. If you have solar panels rewinding your meter back to basically zero, suddenly you are hurting the utility company in two ways: They are buying electricity from you at retail instead of wholesale, and you are no longer paying your line maintenance fees. It's great to give incentives for new technology, but as they say, you can't scale losing money on every transaction into a profitable business.
  - mullingitover 6y ago
    > As far as road tax, the current system works pretty fairly for ICE engines, in my opinion. The larger the vehicle, the more powerful the engine, and thus the lower the efficiency. I'm skeptical about that claim. "Freight trucks cause 99% of wear-and-tear on US roads, but only pay for 35% of the maintenance. This $60B subsidy causes extra congestion and pollution, and taxpayers pay the bill."[1] [1] https://truecostblog.com/2009/06/02/the-hidden-trucking-industry-subsidy/ https://truecostblog.com/2009/06/02/the-hidden-trucking-indu...
    - koheripbal 6y ago
      Clicking through to sources in you source finds most are based on individual opinions, not studies.
  - goodcanadian 6y ago
    There is a similar issue with home solar panel installs. It is my impression that straight up net metering is very rare. It certainly isn't a thing in the UK where you will generally be paid much less for exporting to the grid than you will pay for importing from the grid. Moreover, as I recall, everywhere I've lived (several different countries) separated out a standing charge for grid maintenance from electricity usage. It is certainly the case where I am now.
    - war1025 6y ago
      > It is my impression that straight up net metering is very rare. Perhaps how it's done around here is different, but for instance this [1] caused a bit of an uproar among people we know with solar panels a few years ago. I believe the way it works here is that if you install solar panels, you are allowed to net-meter an amount proportional to your annual electric usage in the period before you go solar panels. I think there is a bit of room for growth allowed, so something like 1.2x. [1] https://www.midamericanenergy.com/nr-solaract https://www.midamericanenergy.com/nr-solaract
- scoopertrooper 6y ago
  Not merely that, but it disproportionately punishes EV drivers. The fuel excise currently stands at $0.423 so a non-EV driver getting 10 km/l would be paying $0.0423 per a km to drive their car while a EV drive would be stuck paying $0.2 per a km.
  - taion 6y ago
    Per the piece, it's actually "2.5c a kilometre", or $0.025, so the EV driver is still paying quite a bit less.
    - scoopertrooper 6y ago
      Oops! Should read more carefully!
backtoyoujim 6y ago
can't wait for the "work from home tax".
floatingatoll 6y ago
It’s bizarre that they didn’t just apply this as a universal tax of miles driven for all vehicles. But the dollar amount sounds about right, so my objection is simply “charge the base miles tax to all vehicles and multiply it by the number of tyres on the car”, or set it by “axle weight ^ 4” as top comment notes, or whatever. They can repurpose the gasoline tax as a carbon emissions tax, set to market rates for the carbon credit cost of a tank of gasoline, since we can generally estimate that within enough accuracy for a carbon tax. Still, at least it’s progress towards rational behavior towards vehicles!
KMag 6y ago
I think a tire tax would work much better, as tire wear should be closer to being proportional to road wear caused by the vehicle. The proportion may change over time, necessitating tax updates, but clearly fuel consumption isn't proportional to road wear.
transfire 6y ago
This is problematic on so many levels. Eg. How do they plan to enforce this tax? But the real overlooked issue is the cost of roads. They cost millions per mile -- and that cost largely is a reflection of the fact that road building is not competitive. Find a way to innovate this side of the issue -- bringing road costs down multiple factors -- and the taxation issue largely evaporates.
callesgg 6y ago
Assuming they don’t have car ownership tax???
thewileyone 6y ago
This is an additional tax on top of the existing road tax? That's not a good way to encourage responsibility for the environment.
dawnerd 6y ago
Oregon decided last year? Year before? That their registration fees were going to be based on efficiency of the vehicle, so the gas burning cars end up paying less to register. I get trying to have EVs pay their fair share, but having to pay more than double what a massively polluting much heavier truck has to pay is kind of a slap in the face. I'd much rather pay per kwh.
dsq 6y ago
Governments that have fuel excise taxes will do anything to keep their income flowing, including sabotaging EVs and public transport. This is why I would always snicker when reading Tom Friedman's harping on a fuel excise tax: https://www.nytimes.com/2009/09/20/opinion/20friedman.html https://www.nytimes.com/2009/09/20/opinion/20friedman.html Every new tax always leads to increased spending then to more tax ad nauseum.
- moralsupply 6y ago
  Also: taxes are arbitrarily imposed through coercion, therefore they are not legitimate under an ethical standpoint, no matter how one wants to cut it. The idea of a "social contract" to justify taxation is absurd, to say the least (did you ever sign it voluntarily?). If the government can print its own money (which you're forced to use), why does it need to make you work and pay taxes to get that money back? The money the government "prints" has no value on itself, it needs your work to "value" its money. Taxation is nothing but the imposition the government puts on you to work "for free" so that it can print as much money as it wants and increase its own size. Never "defend" taxes of any sort, they are unethical and essentially constitute slavery.
  - BlueTemplar 6y ago
    Because inflation is considered to be bad (not sure whether it's worse than the tax system though), but more importantly, an inflation tax is regressive in that richer people can afford to store their wealth in things that do not inflate away (and even deflate due to this kind of speculation). Also, taxes are probably a smarter way to deal with negative externalities than regulation.
    - moralsupply 6y ago
      Inflation is taxation on your savings. It's effectively the same thing as any other tax. Laws and regulations are the reason as to why taxes exist in the first place. The government holds the monopoly of force, therefore it can issue any laws and regulations it wants. Because of that it can have a monopoly on the currency and tax its people.
troughway 6y ago
When the brunt of the complaints amounts to people tweeting discontent, you know where things are headed. That’s the only real shame in this whole ordeal.
schappim 6y ago
In Australia most already fall under the Federal “Luxury Car Tax”[1]. Cars with a luxury car tax (LCT) value over the LCT threshold attract an LCT rate of 33%. A Tesla model 3 starts at $AUD 66,900 in Australia. https://www.ato.gov.au/rates/luxury-car-tax-rate-and-thresholds/ https://www.ato.gov.au/rates/luxury-car-tax-rate-and-thresho...
SilentBan 6y ago
Is there a country that is more despicable than Australia? I mean among the civilized world, not about the Russias and Chinas of the world.
horsawlarway 6y ago
I'm not really sure there's a good answer here. Fuel tax is 43 cents a litre. Australian cars right now avg about 13.1 litres per 100km. So you're looking at ~$5.6 per 100km for fuel tax. This tax is adding $2.5 tax per 100km for electric. Right now, EVs are absolutely creating an regressive tax situation with regards to fuel. Those who can afford to buy newer, efficient cars can usually save money on tax over those who can't. For electric, it was worse - because they do tend to be more expensive to purchase up front, and they paid no fuel tax at all. And frankly, infrastructure is expensive, and governments need to plan on continuing to maintain it. That said - I think the only real answer here is a more thorough overhaul of how you tax road usage. Perhaps it's time to ditch the fuel excise tax entirely, and tax all drivers based on (vehicle weight * kms driven * some constant). Encourage drivers to move to lighter vehicles which cause less wear and tear on the road, and drop the disparity between fuel and electric. They both use the same tires.
- Wowfunhappy 6y ago
  > Encourage drivers to move to lighter vehicles which cause less wear and tear on the road, and drop the disparity between fuel and electric. They both use the same tires. And what of the damage that non-electric vehicles do to the environment? Shouldn't we be accounting for that? At least roads can be easily repaired.
- kanox 6y ago
  > Right now, EVs are absolutely creating an regressive tax situation with regards to fuel. Those who can afford to buy newer, efficient cars can usually save money on tax over those who can't. For electric, it was worse - because they do tend to be more expensive to purchase up front, and they paid no fuel tax at all. Encouraging the adoption of cleaner but more expensive technology is always going to be regressive, no way around this. A lot of environmental regulation has strong regressive effects, it hits coal miners much harder than people sipping 10$ coffee on their macbook.
  - kilotaras 6y ago
    I'm of mind that all government "monetary disincentives", e.g. fines, sin taxes, pollution taxes should go into fee and dividend scheme. Solves both moral hazard (we want more fines/driving because we need revenue) and regressive nature of those.
jpollock 6y ago
In many countries, fuel taxes don't go into general revenues, they are ring-fenced and allocated for road maintenance. Even if they aren't, a reduction in revenue must be offset. The fact that they aren't charged taxes for use of the roads was the incentive. This is removing it in recognition that electric vehicles are now enough of a percentage of the fleet to affect tax revenue. New Zealand does the same, with diesel and commercial vehicles already paying "road user charges" (RUC) to fund road maintenance. Petrol (gasoline) vehicles pay this tax at the pump. EVs are exempt from the RUC until they represent 2% of the fleet. https://www.transport.govt.nz/area-of-interest/environment-and-climate-change/electric-vehicles-programme/ https://www.transport.govt.nz/area-of-interest/environment-a... https://www.stuff.co.nz/motoring/107372241/ev-drivers-are-bludgers-costing-nz-roads-7m-per-year https://www.stuff.co.nz/motoring/107372241/ev-drivers-are-bl...
- Dumblydorr 6y ago
  These are island nations without their own fuel production and good renewable potential. Wouldn't they see it's in their best interest to maximize batteries to minimize fuel imports?
  - nordsieck 6y ago
    > These are island nations without their own fuel production and good renewable potential. Wouldn't they see it's in their best interest to maximize batteries to minimize fuel imports? Presumably that applies at the individual consumer level as well.
  - jpollock 6y ago
    New Zealand is an oil and gas exporter. They have their own gasoline refinery as well. This doesn’t maximize batteries, it impoverishes transport budgets (public transit and reading) and is a tax rebate primarily available to the wealthy, like solar panels. There are good reasons to electrify the the transport system, but the transport network will still need to be funded.
- x87678r 6y ago
  Specifically Diesel in NZ is not taxed because most a huge amount used by Farmers for tractors and/or generators so RUCs were added to charge diesel trucks.
jdhn 6y ago
I don't understand the opposition to this. These vehicles continue to use roads but don't pay any taxes that would help maintain roads if they were gas or diesel cars. How is that fair?
- Dumblydorr 6y ago
  It's fair to incentivize EVs because they are far less damaging to the planet and local communities than gasoline vehicles. Gasoline vehicles get to pollute for free, why don't non-polluters get to use the road for free? Either you're trying to minimize climate damage and disproportionate harms to vulnerable communities, or you're business as usual.
- brogrammer2018 6y ago
  I live in South Australia. Taxes here are already high for everything road related; we already pay taxes for roads as part of Vehicle Registration (excluding compulsory 3rd party insurance); pay council rates (goes to roads), income tax (goes to roads), capital gains tax, and have a 10% GST (which may be 15% soon) which all feeds into the roads. Other parts of the world are providing incentives to EVs; but not here.
- tshaddox 6y ago
  Why is it incumbent on the EV owners to somehow solve the blatantly and deliberately incorrect means of charging people to use roads? This is like saying “the movie theater makes money by charging to park a car in the parking lot, but you walked to the theater, so how is it fair that you get to watch the movie for free?” Well, perhaps the movie theater should come up with some slightly less ridiculous way of charging for entrance. Or if governments had decided to fund road maintenance using a tax on car paint, would it be unfair to buy a car that isn’t painted? And what about people who use gasoline and diesel for things other than automobiles on public roads? That’s also unfair.
- mtgx 6y ago
  Trucks do...wait for it...1,400x more damage to roads than standard passenger vehicles do.
Causality1 6y ago
Road taxes should be directly proportional to how much wear a vehicle causes to the road. That ranges to effectively zero for bikes and pedestrians to dozens of times as much as a car for eighteen-wheelers.
- cityofdelusion 6y ago
  Indeed, road damage is a 4th power function off the load of a vehicle. I feel this would be fairly easy to implement at registration (at least here in the states, weight is part of the registration application).
- blisterpeanuts 6y ago
  This sounds fair except that trucks perform an essential service. Heavy taxation of the trucking industry just raises the price of food and other necessities.
  - horsawlarway 6y ago
    Sure, but you're still paying the same tax, its just buried under a different line item. And at least for non-food goods, I tend to think usage taxes are appropriate, since consumption (usage) tends to go up as income goes up. I'm particularly interested to see where we go as more and more shopping moves to home delivery. In theory, you save wear because each individual isn't driving to the store and back, but you're also increasing the number of large/heavy vehicles. And heavy vehicles account for basically all road damage.
  - ggreer 6y ago
    Shipping is important but current trucks aren’t the only way to transport goods. Taxing vehicles based on their road wear would incentivize the industry to move to smaller trucks that don’t cause as much damage to roads.
    - blisterpeanuts 6y ago
      But you'd need more trucks to move equivalent goods; seems like a wash to me.
bedhead 6y ago
I love these little examples of the government acting literally like mafia bosses.
- StreamBright 6y ago
  That, and it usually against progress.
blisterpeanuts 6y ago
Everyone benefits almost equally from the road system, regardless of whether they drive. Emergency services, food and other goods, the entire economy depends on the roads. Taxation to fund road maintenance should be central and universal, and not directed at individual vehicles, other than perhaps a sales tax based on weight.
- Zigurd 6y ago
  That sounds "fair" but amounts to a massive subsidy of diesel powered heavy trucking. TBF, it is possible to build roads that trucks do not quickly destroy, and maybe the expense of doing that makes sense in some cases. Everything except heavy trucking would pay much less to maintain roads, but for trucks wearing them out. While you suggest a tax based on vehicle weight, which might also seem "fair," that still does not capture the disproportionate wear, order of magnitude more, caused by heavy trucking.
  - tomp 6y ago
    So? You need trucks to deliver stuff (food etc) if you want to live in a city. The correct way of looking at this isn’t by asking “what’s fair” but instead “what we want to incentivise”. People moving out of cities? Ramp up city property taxes. People moving into cities (more efficient)? Subsidise transport of goods. More green energy? Tax CO2 / fuel, subsidise (clean) electricity. Less trucks, more railways? Tax trucks more, but this hardly makes sense unless rail a viable alternative (i.e. there’s enough railways leading to the city).
    - Dylan16807 6y ago
      There are different ways to ship by truck. Maybe you want to encourage more axles and a slightly lighter max load, which could easily drop the damage by a factor of 10.
upofadown 6y ago
>It points out the petrol excise goes into general revenue rather than road funding... OK, but this is incomplete. We would have to know how much the government spends on roads. For all we know the government spends more than they get in excise tax.
Tiktaalik 6y ago
Same issue is looming for many jurisdictions that have funded roads and public transit with gas taxes. As gas taxes decline, there becomes a hole in the budget. Yes EVs are better than ICE vehicles on CO2 emissions, so of course we should pivot to that, but beyond that cars are still harmful and need to go away as much as they can. EVs create toxic road dust (brake pads + tire wear), congest the roads and kill pedestrians just like regular ICE cars. Better for the taxpayer, the pedestrian, and the environment would be to fund roads and public transit through other, more stable means that don't rely on stable/increasing car ownership (eg. income taxes, wealth taxes), and then save money by limiting road expansion and taking cars off the road as we improve active and public transport.
- Tepix 6y ago
  EVs create less toxic road dust from braking. As long as there's so few EVs on the road, it makes no sense to tax them. You want more EVs, right?
- quicklime 6y ago
  I agree that EVs cause problems and should be taxed too. In addition to the issues you mention, I also worry that subsidies for luxury car brands like Tesla are funded by redistributing wealth from the poor to the rich. But the problem with funding roads from income/wealth taxes is that it moves it further away from being a user-pays system, which creates the wrong incentives. One way to avoid this would be a variable tax that shifts continuously with the mix of vehicles on the road.
  - Tiktaalik 6y ago
    I agree that there's advantages to the user pay system. People are enthusiastic to use a new bridge, less so when they find out that they have to pay a toll to drive over it. Various charges can be used to manage congestion. In a system where road use is "free" there would need to be significant government discipline to not heed demands of road users for more roads. Heavy taxes on the purchase of new cars may be a good strategy to dissuade vehicle congestion, with lesser taxes on new EVs and lesser still on used vehicles.
guerby 6y ago
Tax on using roads make sense as road maintenance costs money that has to come from somewhere. But climate change is also a question of timing and transition, EV will be taxed at some point what about timing and message: - do we want to replace fossil fuel for transportation? - if so how fast do we want to do it? Taxing EV right now might not be the best idea... EV is also less imports, less pollution (including less noise) so it will have some net positive budgetary effect.
- alkonaut 6y ago
  The correct thing might be to add the road tax early as to not need to change the TCO calculation later, when people already own the vehicles. To keep encouraging EV purchases, instead offset the road tax by subsidies for new cars. That brings more cars into the pool. The subsidies can be more or less than the road tax, the point is that the subsidies are trivial to remove later, but a tax is harder and more unfair to those who already purchased a car assuming a specific cost of ownership.
ezzaf 6y ago
I actually think this is quite reasonable. One issue with the "wait until they are a larger share of the market" argument is trying to add a tax gets harder the more people are used to not paying it. The earlier you introduce it the easier it should be. EVs clearly use roads and should pay to use them. Yes ICE vehicles have serious side effects, and we should encourage a switch. But it shouldn't have to be by giving EVs a free ride. A carbon tax would discourage both CO2 emitting cars, and the coal power generators that make up the majority of Victoria's energy generation. Note: I live in Victoria, but don't drive an EV (yet).
hourislate 6y ago
Follow the money. This probably has little to do with maintaining roads, fairness , etc. It has more to do with finding a new revenue source to take advantage of. Sort of like Douce Bank saying that Work from Home people should pay a WFH Tax. The most enthusiastic proponent of an EV tax has been the Infrastructure Partnerships Australia https://en.wikipedia.org/wiki/Infrastructure_Partnerships_Australia https://en.wikipedia.org/wiki/Infrastructure_Partnerships_Au... Infrastructure Partnerships Australia is an independent think tank that looks for ways to raise capital. To justify their existence, they look for ways to separate the masses from their money. Just another private group run by Corporate hacks and sleazy Gov. ICE Vehicles pay registration fees and a gas tax that's suppose to go into the Road Infra but never entirely does. EV's pay registration fees and I'm sure there is already a tax on electricity that is used to charge them just like there is a gas tax for ICE Vehicles. So isn't this double taxation? Perhaps the problem here is you could get a few Solar Panels and a Battery/Storage device and deny them their revenue/profit/tax. We can't have that, can we.... As soon as technology starts digging into the pockets of Tax Revenue, a new Tax comes along to negate any savings benefit for the consumer.
tinus_hn 6y ago
So is Australia that country that actually uses the road tax to pay for roads?
- Zenbit_UX 6y ago
  No but they are that country that was on fire this year due to climate change... How quickly they've forgotten.
  - Guthur 6y ago
    Nope, you don't know what you're talking about. Australia has terrible land management. Before urban settlement the Aboringal population would carry out continual burn and migrate behaviour, keeping the bush leaf clutter far more in check and drastically reducing the amount of fuel available. Austalia has always burned long before the industrial revolution and it can't burn without fuel.
    - rbg246 6y ago
      No what you are saying is not true or rather it's a deliberate obfuscation of the leading cause of the fires- climate change. Rainforests that have not burnt before, burned last year. The fires that exploded across Australia were unprecedented and never burn so rapidly and so hot. Former fire fighter chiefs saying the opposite of what you are saying: "Just a 1C temperature rise has meant the extremes are far more extreme, and it is placing lives at risk, including firefighters" https://www.theguardian.com/australia-news/2019/nov/14/former-australian-fire-chiefs-say-coalition-doesnt-like-talking-about-climate-change https://www.theguardian.com/australia-news/2019/nov/14/forme...
    - Ardren 6y ago
      Australia does plenty of forest management. The problem has been in recent years it's been more dangerous to do controlled burning and the recent bushfires were so extreme the fire was jumping between the tops of the trees skipping the undergrowth completely. https://www.carbonbrief.org/media-reaction-australias-bushfires-and-climate-change https://www.carbonbrief.org/media-reaction-australias-bushfi... https://www.theguardian.com/australia-news/2019/nov/12/is-there-really-a-green-conspiracy-to-stop-bushfire-hazard-reduction https://www.theguardian.com/australia-news/2019/nov/12/is-th...
deleted 6y ago
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megablast 6y ago
Good. Cars are the problem, electric or gas. Electric only solves one problem, cars still cause huge amounts of pollution.
sydneycatalyst 6y ago
I think that road users should pay to use the road. Fuel excise, or electricity surcharge tax or whatever, is a tiny fraction of the subsidy that road users get from regular tax payers. I'm a blind Aussie taxpayer. Consider my tax situation. If I take an Uber to my local pub, that's about A$10. Of that $10: $0.90 in Goods and Services Tax $1 to the taxi compensation scheme That's 19% tax - or $1.90/$10. In Australia, public transport and P2P services get to a tiny fraction of all available road destinations. It easier (and sometimes cheaper) for someone like me to get from Sydney to Singapore than to Sydney to Kangaroo Valley (about 350km from Sydney). So, for my 19% tax rate to get to the pub, the equivalent journey someone who can drive a car on their own may pay $0.25 in fuel excise duty. They can pay the road users tax. They already get enough of a subsidy from me.
- throwaway0a5e 6y ago
  >I think that road users should pay to use the road. I think we should have pay to use parks. And schools. What's the point of having government funded infrastructure if not to make it equally available to all regardless of means?
  - Tiktaalik 6y ago
    To be able to use the road at all requires buying a car, which is expensive. No such barriers in park use. Let's be clear, roads are for wealthy people, not the poor. (Yes I know bicycles and buses use the road too, but if that's all we built roads for we wouldn't need so many!)
    - sydneycatalyst 6y ago
      I agree! Well, besides not being blind or otherwise barred from driving through no fault of your own... :-)
  - sydneycatalyst 6y ago
    I agree. If we were to make roads equally available to all regardless of means, I should be able to travel to 100% of Australia, not the small fraction served by PT and P2P. What I object to is that the tax for blind road users is several orders of magnitude higher than driver-users. And that comes with the caveat you can access maybe 5% of areas in Australia by PT and P2P. At least my kids can use schools without an orders-of-magnitude higher tax. They can only use parks accessible by PT and P2P (which - in Australia - is a very small fraction). So I get we all should pay for shared resources. But its less fair to ask someone who isn't permitted to access these shared resources an orders-of-magnitude higher tax to access a tiny fraction of those resources.

255 points by oxplot 6y ago

These moves always come out of some sense of unfairness about electric vehicles not paying gasoline tax. However, we want people to stop using gasoline, and it makes no sense to punish people for doing a net good thing for society by abandoning ICE vehicles. To truly make a fair system, the payments for road maintenance should be proportional to the damage done to the road by the vehicle. Thus, fees should scale exponentially with vehicle weight. This of course would make road freight very expensive, and that's a good thing, because freight should be shipped on roads as little as possible. Freight should be shipped by rail until the last possible mile.

abnry 6y ago
> Thus, fees should scale exponentially with vehicle weight. Work is force times distance. You have to factor in how much the vehicle is on the road, and the gas used is a decent proxy measure of that.
war1025 6y ago
I believe road wear is calculated as the 4th power of axle weight. Trucks have many axles to distribute the load, and are forced to stop at weigh stations to verify that they are within weight requirements. As far as road tax, the current system works pretty fairly for ICE engines, in my opinion. The larger the vehicle, the more powerful the engine, and thus the lower the efficiency. So semis are paying higher road tax than a little sub-compact car. Also, the more you drive, the more fuel you use, which means the more road tax you end up paying. With an electric car, the incentives are all out of whack. Roads don't wear less just because you have an electric motor turning your wheels. There is a similar issue with home solar panel installs. Utilities factor maintenance costs in as a part of their kwh rates. If you have solar panels rewinding your meter back to basically zero, suddenly you are hurting the utility company in two ways: They are buying electricity from you at retail instead of wholesale, and you are no longer paying your line maintenance fees. It's great to give incentives for new technology, but as they say, you can't scale losing money on every transaction into a profitable business.
- mullingitover 6y ago
  > As far as road tax, the current system works pretty fairly for ICE engines, in my opinion. The larger the vehicle, the more powerful the engine, and thus the lower the efficiency. I'm skeptical about that claim. "Freight trucks cause 99% of wear-and-tear on US roads, but only pay for 35% of the maintenance. This $60B subsidy causes extra congestion and pollution, and taxpayers pay the bill."[1] [1] https://truecostblog.com/2009/06/02/the-hidden-trucking-industry-subsidy/ https://truecostblog.com/2009/06/02/the-hidden-trucking-indu...
  - koheripbal 6y ago
    Clicking through to sources in you source finds most are based on individual opinions, not studies.
- goodcanadian 6y ago
  There is a similar issue with home solar panel installs. It is my impression that straight up net metering is very rare. It certainly isn't a thing in the UK where you will generally be paid much less for exporting to the grid than you will pay for importing from the grid. Moreover, as I recall, everywhere I've lived (several different countries) separated out a standing charge for grid maintenance from electricity usage. It is certainly the case where I am now.
  - war1025 6y ago
    > It is my impression that straight up net metering is very rare. Perhaps how it's done around here is different, but for instance this [1] caused a bit of an uproar among people we know with solar panels a few years ago. I believe the way it works here is that if you install solar panels, you are allowed to net-meter an amount proportional to your annual electric usage in the period before you go solar panels. I think there is a bit of room for growth allowed, so something like 1.2x. [1] https://www.midamericanenergy.com/nr-solaract https://www.midamericanenergy.com/nr-solaract
scoopertrooper 6y ago
Not merely that, but it disproportionately punishes EV drivers. The fuel excise currently stands at $0.423 so a non-EV driver getting 10 km/l would be paying $0.0423 per a km to drive their car while a EV drive would be stuck paying $0.2 per a km.
- taion 6y ago
  Per the piece, it's actually "2.5c a kilometre", or $0.025, so the EV driver is still paying quite a bit less.
  - scoopertrooper 6y ago
    Oops! Should read more carefully!

backtoyoujim 6y ago

can't wait for the "work from home tax".

floatingatoll 6y ago

It’s bizarre that they didn’t just apply this as a universal tax of miles driven for all vehicles. But the dollar amount sounds about right, so my objection is simply “charge the base miles tax to all vehicles and multiply it by the number of tyres on the car”, or set it by “axle weight ^ 4” as top comment notes, or whatever. They can repurpose the gasoline tax as a carbon emissions tax, set to market rates for the carbon credit cost of a tank of gasoline, since we can generally estimate that within enough accuracy for a carbon tax. Still, at least it’s progress towards rational behavior towards vehicles!

KMag 6y ago

I think a tire tax would work much better, as tire wear should be closer to being proportional to road wear caused by the vehicle. The proportion may change over time, necessitating tax updates, but clearly fuel consumption isn't proportional to road wear.

transfire 6y ago

This is problematic on so many levels. Eg. How do they plan to enforce this tax? But the real overlooked issue is the cost of roads. They cost millions per mile -- and that cost largely is a reflection of the fact that road building is not competitive. Find a way to innovate this side of the issue -- bringing road costs down multiple factors -- and the taxation issue largely evaporates.

callesgg 6y ago

Assuming they don’t have car ownership tax???

thewileyone 6y ago

This is an additional tax on top of the existing road tax? That's not a good way to encourage responsibility for the environment.

dawnerd 6y ago

Oregon decided last year? Year before? That their registration fees were going to be based on efficiency of the vehicle, so the gas burning cars end up paying less to register. I get trying to have EVs pay their fair share, but having to pay more than double what a massively polluting much heavier truck has to pay is kind of a slap in the face. I'd much rather pay per kwh.

dsq 6y ago

Governments that have fuel excise taxes will do anything to keep their income flowing, including sabotaging EVs and public transport. This is why I would always snicker when reading Tom Friedman's harping on a fuel excise tax: https://www.nytimes.com/2009/09/20/opinion/20friedman.html https://www.nytimes.com/2009/09/20/opinion/20friedman.html Every new tax always leads to increased spending then to more tax ad nauseum.

moralsupply 6y ago
Also: taxes are arbitrarily imposed through coercion, therefore they are not legitimate under an ethical standpoint, no matter how one wants to cut it. The idea of a "social contract" to justify taxation is absurd, to say the least (did you ever sign it voluntarily?). If the government can print its own money (which you're forced to use), why does it need to make you work and pay taxes to get that money back? The money the government "prints" has no value on itself, it needs your work to "value" its money. Taxation is nothing but the imposition the government puts on you to work "for free" so that it can print as much money as it wants and increase its own size. Never "defend" taxes of any sort, they are unethical and essentially constitute slavery.
- BlueTemplar 6y ago
  Because inflation is considered to be bad (not sure whether it's worse than the tax system though), but more importantly, an inflation tax is regressive in that richer people can afford to store their wealth in things that do not inflate away (and even deflate due to this kind of speculation). Also, taxes are probably a smarter way to deal with negative externalities than regulation.
  - moralsupply 6y ago
    Inflation is taxation on your savings. It's effectively the same thing as any other tax. Laws and regulations are the reason as to why taxes exist in the first place. The government holds the monopoly of force, therefore it can issue any laws and regulations it wants. Because of that it can have a monopoly on the currency and tax its people.

troughway 6y ago

When the brunt of the complaints amounts to people tweeting discontent, you know where things are headed. That’s the only real shame in this whole ordeal.

schappim 6y ago

In Australia most already fall under the Federal “Luxury Car Tax”[1]. Cars with a luxury car tax (LCT) value over the LCT threshold attract an LCT rate of 33%. A Tesla model 3 starts at $AUD 66,900 in Australia. https://www.ato.gov.au/rates/luxury-car-tax-rate-and-thresholds/ https://www.ato.gov.au/rates/luxury-car-tax-rate-and-thresho...

SilentBan 6y ago

Is there a country that is more despicable than Australia? I mean among the civilized world, not about the Russias and Chinas of the world.

horsawlarway 6y ago

I'm not really sure there's a good answer here. Fuel tax is 43 cents a litre. Australian cars right now avg about 13.1 litres per 100km. So you're looking at ~$5.6 per 100km for fuel tax. This tax is adding $2.5 tax per 100km for electric. Right now, EVs are absolutely creating an regressive tax situation with regards to fuel. Those who can afford to buy newer, efficient cars can usually save money on tax over those who can't. For electric, it was worse - because they do tend to be more expensive to purchase up front, and they paid no fuel tax at all. And frankly, infrastructure is expensive, and governments need to plan on continuing to maintain it. That said - I think the only real answer here is a more thorough overhaul of how you tax road usage. Perhaps it's time to ditch the fuel excise tax entirely, and tax all drivers based on (vehicle weight * kms driven * some constant). Encourage drivers to move to lighter vehicles which cause less wear and tear on the road, and drop the disparity between fuel and electric. They both use the same tires.

Wowfunhappy 6y ago
> Encourage drivers to move to lighter vehicles which cause less wear and tear on the road, and drop the disparity between fuel and electric. They both use the same tires. And what of the damage that non-electric vehicles do to the environment? Shouldn't we be accounting for that? At least roads can be easily repaired.
kanox 6y ago
> Right now, EVs are absolutely creating an regressive tax situation with regards to fuel. Those who can afford to buy newer, efficient cars can usually save money on tax over those who can't. For electric, it was worse - because they do tend to be more expensive to purchase up front, and they paid no fuel tax at all. Encouraging the adoption of cleaner but more expensive technology is always going to be regressive, no way around this. A lot of environmental regulation has strong regressive effects, it hits coal miners much harder than people sipping 10$ coffee on their macbook.
- kilotaras 6y ago
  I'm of mind that all government "monetary disincentives", e.g. fines, sin taxes, pollution taxes should go into fee and dividend scheme. Solves both moral hazard (we want more fines/driving because we need revenue) and regressive nature of those.

jpollock 6y ago

In many countries, fuel taxes don't go into general revenues, they are ring-fenced and allocated for road maintenance. Even if they aren't, a reduction in revenue must be offset. The fact that they aren't charged taxes for use of the roads was the incentive. This is removing it in recognition that electric vehicles are now enough of a percentage of the fleet to affect tax revenue. New Zealand does the same, with diesel and commercial vehicles already paying "road user charges" (RUC) to fund road maintenance. Petrol (gasoline) vehicles pay this tax at the pump. EVs are exempt from the RUC until they represent 2% of the fleet. https://www.transport.govt.nz/area-of-interest/environment-and-climate-change/electric-vehicles-programme/ https://www.transport.govt.nz/area-of-interest/environment-a... https://www.stuff.co.nz/motoring/107372241/ev-drivers-are-bludgers-costing-nz-roads-7m-per-year https://www.stuff.co.nz/motoring/107372241/ev-drivers-are-bl...

Dumblydorr 6y ago
These are island nations without their own fuel production and good renewable potential. Wouldn't they see it's in their best interest to maximize batteries to minimize fuel imports?
- nordsieck 6y ago
  > These are island nations without their own fuel production and good renewable potential. Wouldn't they see it's in their best interest to maximize batteries to minimize fuel imports? Presumably that applies at the individual consumer level as well.
- jpollock 6y ago
  New Zealand is an oil and gas exporter. They have their own gasoline refinery as well. This doesn’t maximize batteries, it impoverishes transport budgets (public transit and reading) and is a tax rebate primarily available to the wealthy, like solar panels. There are good reasons to electrify the the transport system, but the transport network will still need to be funded.
x87678r 6y ago
Specifically Diesel in NZ is not taxed because most a huge amount used by Farmers for tractors and/or generators so RUCs were added to charge diesel trucks.

jdhn 6y ago

I don't understand the opposition to this. These vehicles continue to use roads but don't pay any taxes that would help maintain roads if they were gas or diesel cars. How is that fair?

Dumblydorr 6y ago
It's fair to incentivize EVs because they are far less damaging to the planet and local communities than gasoline vehicles. Gasoline vehicles get to pollute for free, why don't non-polluters get to use the road for free? Either you're trying to minimize climate damage and disproportionate harms to vulnerable communities, or you're business as usual.
brogrammer2018 6y ago
I live in South Australia. Taxes here are already high for everything road related; we already pay taxes for roads as part of Vehicle Registration (excluding compulsory 3rd party insurance); pay council rates (goes to roads), income tax (goes to roads), capital gains tax, and have a 10% GST (which may be 15% soon) which all feeds into the roads. Other parts of the world are providing incentives to EVs; but not here.
tshaddox 6y ago
Why is it incumbent on the EV owners to somehow solve the blatantly and deliberately incorrect means of charging people to use roads? This is like saying “the movie theater makes money by charging to park a car in the parking lot, but you walked to the theater, so how is it fair that you get to watch the movie for free?” Well, perhaps the movie theater should come up with some slightly less ridiculous way of charging for entrance. Or if governments had decided to fund road maintenance using a tax on car paint, would it be unfair to buy a car that isn’t painted? And what about people who use gasoline and diesel for things other than automobiles on public roads? That’s also unfair.
mtgx 6y ago
Trucks do...wait for it...1,400x more damage to roads than standard passenger vehicles do.

Causality1 6y ago

Road taxes should be directly proportional to how much wear a vehicle causes to the road. That ranges to effectively zero for bikes and pedestrians to dozens of times as much as a car for eighteen-wheelers.

cityofdelusion 6y ago
Indeed, road damage is a 4th power function off the load of a vehicle. I feel this would be fairly easy to implement at registration (at least here in the states, weight is part of the registration application).
blisterpeanuts 6y ago
This sounds fair except that trucks perform an essential service. Heavy taxation of the trucking industry just raises the price of food and other necessities.
- horsawlarway 6y ago
  Sure, but you're still paying the same tax, its just buried under a different line item. And at least for non-food goods, I tend to think usage taxes are appropriate, since consumption (usage) tends to go up as income goes up. I'm particularly interested to see where we go as more and more shopping moves to home delivery. In theory, you save wear because each individual isn't driving to the store and back, but you're also increasing the number of large/heavy vehicles. And heavy vehicles account for basically all road damage.
- ggreer 6y ago
  Shipping is important but current trucks aren’t the only way to transport goods. Taxing vehicles based on their road wear would incentivize the industry to move to smaller trucks that don’t cause as much damage to roads.
  - blisterpeanuts 6y ago
    But you'd need more trucks to move equivalent goods; seems like a wash to me.

bedhead 6y ago

I love these little examples of the government acting literally like mafia bosses.

StreamBright 6y ago
That, and it usually against progress.

blisterpeanuts 6y ago

Everyone benefits almost equally from the road system, regardless of whether they drive. Emergency services, food and other goods, the entire economy depends on the roads. Taxation to fund road maintenance should be central and universal, and not directed at individual vehicles, other than perhaps a sales tax based on weight.

Zigurd 6y ago
That sounds "fair" but amounts to a massive subsidy of diesel powered heavy trucking. TBF, it is possible to build roads that trucks do not quickly destroy, and maybe the expense of doing that makes sense in some cases. Everything except heavy trucking would pay much less to maintain roads, but for trucks wearing them out. While you suggest a tax based on vehicle weight, which might also seem "fair," that still does not capture the disproportionate wear, order of magnitude more, caused by heavy trucking.
- tomp 6y ago
  So? You need trucks to deliver stuff (food etc) if you want to live in a city. The correct way of looking at this isn’t by asking “what’s fair” but instead “what we want to incentivise”. People moving out of cities? Ramp up city property taxes. People moving into cities (more efficient)? Subsidise transport of goods. More green energy? Tax CO2 / fuel, subsidise (clean) electricity. Less trucks, more railways? Tax trucks more, but this hardly makes sense unless rail a viable alternative (i.e. there’s enough railways leading to the city).
  - Dylan16807 6y ago
    There are different ways to ship by truck. Maybe you want to encourage more axles and a slightly lighter max load, which could easily drop the damage by a factor of 10.

upofadown 6y ago

>It points out the petrol excise goes into general revenue rather than road funding... OK, but this is incomplete. We would have to know how much the government spends on roads. For all we know the government spends more than they get in excise tax.

Tiktaalik 6y ago

Same issue is looming for many jurisdictions that have funded roads and public transit with gas taxes. As gas taxes decline, there becomes a hole in the budget. Yes EVs are better than ICE vehicles on CO2 emissions, so of course we should pivot to that, but beyond that cars are still harmful and need to go away as much as they can. EVs create toxic road dust (brake pads + tire wear), congest the roads and kill pedestrians just like regular ICE cars. Better for the taxpayer, the pedestrian, and the environment would be to fund roads and public transit through other, more stable means that don't rely on stable/increasing car ownership (eg. income taxes, wealth taxes), and then save money by limiting road expansion and taking cars off the road as we improve active and public transport.

Tepix 6y ago
EVs create less toxic road dust from braking. As long as there's so few EVs on the road, it makes no sense to tax them. You want more EVs, right?
quicklime 6y ago
I agree that EVs cause problems and should be taxed too. In addition to the issues you mention, I also worry that subsidies for luxury car brands like Tesla are funded by redistributing wealth from the poor to the rich. But the problem with funding roads from income/wealth taxes is that it moves it further away from being a user-pays system, which creates the wrong incentives. One way to avoid this would be a variable tax that shifts continuously with the mix of vehicles on the road.
- Tiktaalik 6y ago
  I agree that there's advantages to the user pay system. People are enthusiastic to use a new bridge, less so when they find out that they have to pay a toll to drive over it. Various charges can be used to manage congestion. In a system where road use is "free" there would need to be significant government discipline to not heed demands of road users for more roads. Heavy taxes on the purchase of new cars may be a good strategy to dissuade vehicle congestion, with lesser taxes on new EVs and lesser still on used vehicles.

guerby 6y ago

Tax on using roads make sense as road maintenance costs money that has to come from somewhere. But climate change is also a question of timing and transition, EV will be taxed at some point what about timing and message: - do we want to replace fossil fuel for transportation? - if so how fast do we want to do it? Taxing EV right now might not be the best idea... EV is also less imports, less pollution (including less noise) so it will have some net positive budgetary effect.

alkonaut 6y ago
The correct thing might be to add the road tax early as to not need to change the TCO calculation later, when people already own the vehicles. To keep encouraging EV purchases, instead offset the road tax by subsidies for new cars. That brings more cars into the pool. The subsidies can be more or less than the road tax, the point is that the subsidies are trivial to remove later, but a tax is harder and more unfair to those who already purchased a car assuming a specific cost of ownership.

ezzaf 6y ago

I actually think this is quite reasonable. One issue with the "wait until they are a larger share of the market" argument is trying to add a tax gets harder the more people are used to not paying it. The earlier you introduce it the easier it should be. EVs clearly use roads and should pay to use them. Yes ICE vehicles have serious side effects, and we should encourage a switch. But it shouldn't have to be by giving EVs a free ride. A carbon tax would discourage both CO2 emitting cars, and the coal power generators that make up the majority of Victoria's energy generation. Note: I live in Victoria, but don't drive an EV (yet).

hourislate 6y ago

Follow the money. This probably has little to do with maintaining roads, fairness , etc. It has more to do with finding a new revenue source to take advantage of. Sort of like Douce Bank saying that Work from Home people should pay a WFH Tax. The most enthusiastic proponent of an EV tax has been the Infrastructure Partnerships Australia https://en.wikipedia.org/wiki/Infrastructure_Partnerships_Australia https://en.wikipedia.org/wiki/Infrastructure_Partnerships_Au... Infrastructure Partnerships Australia is an independent think tank that looks for ways to raise capital. To justify their existence, they look for ways to separate the masses from their money. Just another private group run by Corporate hacks and sleazy Gov. ICE Vehicles pay registration fees and a gas tax that's suppose to go into the Road Infra but never entirely does. EV's pay registration fees and I'm sure there is already a tax on electricity that is used to charge them just like there is a gas tax for ICE Vehicles. So isn't this double taxation? Perhaps the problem here is you could get a few Solar Panels and a Battery/Storage device and deny them their revenue/profit/tax. We can't have that, can we.... As soon as technology starts digging into the pockets of Tax Revenue, a new Tax comes along to negate any savings benefit for the consumer.

tinus_hn 6y ago

So is Australia that country that actually uses the road tax to pay for roads?

Zenbit_UX 6y ago
No but they are that country that was on fire this year due to climate change... How quickly they've forgotten.
- Guthur 6y ago
  Nope, you don't know what you're talking about. Australia has terrible land management. Before urban settlement the Aboringal population would carry out continual burn and migrate behaviour, keeping the bush leaf clutter far more in check and drastically reducing the amount of fuel available. Austalia has always burned long before the industrial revolution and it can't burn without fuel.
  - rbg246 6y ago
    No what you are saying is not true or rather it's a deliberate obfuscation of the leading cause of the fires- climate change. Rainforests that have not burnt before, burned last year. The fires that exploded across Australia were unprecedented and never burn so rapidly and so hot. Former fire fighter chiefs saying the opposite of what you are saying: "Just a 1C temperature rise has meant the extremes are far more extreme, and it is placing lives at risk, including firefighters" https://www.theguardian.com/australia-news/2019/nov/14/former-australian-fire-chiefs-say-coalition-doesnt-like-talking-about-climate-change https://www.theguardian.com/australia-news/2019/nov/14/forme...
  - Ardren 6y ago
    Australia does plenty of forest management. The problem has been in recent years it's been more dangerous to do controlled burning and the recent bushfires were so extreme the fire was jumping between the tops of the trees skipping the undergrowth completely. https://www.carbonbrief.org/media-reaction-australias-bushfires-and-climate-change https://www.carbonbrief.org/media-reaction-australias-bushfi... https://www.theguardian.com/australia-news/2019/nov/12/is-there-really-a-green-conspiracy-to-stop-bushfire-hazard-reduction https://www.theguardian.com/australia-news/2019/nov/12/is-th...

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megablast 6y ago

Good. Cars are the problem, electric or gas. Electric only solves one problem, cars still cause huge amounts of pollution.

sydneycatalyst 6y ago

I think that road users should pay to use the road. Fuel excise, or electricity surcharge tax or whatever, is a tiny fraction of the subsidy that road users get from regular tax payers. I'm a blind Aussie taxpayer. Consider my tax situation. If I take an Uber to my local pub, that's about A$10. Of that $10: $0.90 in Goods and Services Tax $1 to the taxi compensation scheme That's 19% tax - or $1.90/$10. In Australia, public transport and P2P services get to a tiny fraction of all available road destinations. It easier (and sometimes cheaper) for someone like me to get from Sydney to Singapore than to Sydney to Kangaroo Valley (about 350km from Sydney). So, for my 19% tax rate to get to the pub, the equivalent journey someone who can drive a car on their own may pay $0.25 in fuel excise duty. They can pay the road users tax. They already get enough of a subsidy from me.

throwaway0a5e 6y ago
>I think that road users should pay to use the road. I think we should have pay to use parks. And schools. What's the point of having government funded infrastructure if not to make it equally available to all regardless of means?
- Tiktaalik 6y ago
  To be able to use the road at all requires buying a car, which is expensive. No such barriers in park use. Let's be clear, roads are for wealthy people, not the poor. (Yes I know bicycles and buses use the road too, but if that's all we built roads for we wouldn't need so many!)
  - sydneycatalyst 6y ago
    I agree! Well, besides not being blind or otherwise barred from driving through no fault of your own... :-)
- sydneycatalyst 6y ago
  I agree. If we were to make roads equally available to all regardless of means, I should be able to travel to 100% of Australia, not the small fraction served by PT and P2P. What I object to is that the tax for blind road users is several orders of magnitude higher than driver-users. And that comes with the caveat you can access maybe 5% of areas in Australia by PT and P2P. At least my kids can use schools without an orders-of-magnitude higher tax. They can only use parks accessible by PT and P2P (which - in Australia - is a very small fraction). So I get we all should pay for shared resources. But its less fair to ask someone who isn't permitted to access these shared resources an orders-of-magnitude higher tax to access a tiny fraction of those resources.