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I think you misunderstand what the road tax (or any other tax) is for. There are three main reasons for a tax to exist: 1. To bring revenue 2. To create ince
by lmilcin 6y ago
I think you misunderstand what the road tax (or any other tax) is for.
There are three main reasons for a tax to exist:
1. To bring revenue
2. To create incentive
3. Social justice (or illusion of it)
Revenue from a specific tax is almost never used for a specific purpose. All revenue goes into a large bin from which the government takes to finance everything.
Revenue from fuel/road tax is not used to finance building roads. Infrastructure is financed from budget or by private companies who then can impose tolls on road users.
Fuel tax (besides obvious goal of creating revenue) is there to create incentive to drive less and to drive more efficiently (using less fuel). This is not to preserve roads but rather to preserve capacity and environment.
I can only assume that tax on electric vehicles is as a response to increasing use of EVs. Initially, EVs were exempted from taxes to create incentive to use them more. Now that it is pretty clear EVs took off and will be widespread no matter what, some countries start to remove those exemptions to ensure continuing revenue stream.
- askvictor 6y ago> Initially, EVs were exempted from taxes to create incentive to use them more. Now that it is pretty clear EVs took off and will be widespread no matter what, some countries start to remove those exemptions to ensure continuing revenue stream. I suspect that EVs weren't exempted by design, but just slipped through the gap. Australian road tax is applied to petrol/gasoline/diesel. The number of EVs hasn't warranted changing this formula (the alternative being a tax on kms traveled). In Australia, EVs still haven't taken off (as there haven't been any incentives to buy them; in fact as they tend to be expensive, they often fall under the luxury car category and get taxed even more), so there are still very, very few on the road. It's very slowly changing, and this change is definitely looking into the next decade more that the next year, but still strikes me as odd timing - just when momentum is building to EVs, this will dull that momentum (at least without an incentive to _purchase_ an EV.
- AlotOfReading 6y agoI'm not sure how it works in your country, but in the US fuel taxes don't go to the general pot, they end up in a specific fund called the Highway Trust Fund that's specifically earmarked for transportation infrastructure and maintenance.
- notatoad 6y agoThis is true, but the highway trust fund is not funded exclusively by fuel taxes, it's funded from the general fund https://www.taxpolicycenter.org/briefing-book/what-highway-trust-fund-and-how-it-financed https://www.taxpolicycenter.org/briefing-book/what-highway-t...
- URSpider94 6y agoIt’s worth noting that for over 50 years, the trust fund was fully self-sufficient with no general fund contributions. There’s been a shortfall in recent years because Congress is reluctant to increase the gas tax. As fleet fuel economy continues to increase, the tax revenue per mile driven continues to fall.
- conanbatt 6y agoBudgeting is often quite fungible and you can replace where to spend new money by replacing old money. I would say that 60% of taxes might be raised for health and education this way.
- sagarm 6y agoGas taxes pay less than half of the costs of maintaining roads.
- kelnos 6y agoPer the article, in Australia the fuel excise does not go toward road maintenance, but instead goes into the general fund.
- SEJeff 6y agoAnd in the US, the overwhelming majority of road damage is done by long haul freight semi trucks, not electric or ICE cars.
- chii 6y agoand the article is specifically talking about australia, which doesn't have specific tax buckets for a purpose.
- 6y ago