Replacement

Gummint

Here’s a little thought experiment for you.

Let’s assume that the Greenies get their wish, and all fossil fuel-burning cars were replaced with electric cars, by law.

Ignore all practical issues (because the Greens always do), and ponder this thought.

Right now, gasoline is taxed by the FedGov at 18.4 cents per gallon.  (Put those guns away, and concentrate on the issue at hand.)  How do you think the Gummint is going to replace that “lost” revenue (~$25 billion per annum)?

Ah, stop thinking about it, because the poxy BritGov already has.

Ministers have been told to consider a national system of road tolls to compensate for the huge loss in revenue from fuel duty when electric cars become mainstream on the back of new research.
…
[T]his revenue stream looks set to shrink significantly by 2040 when UK ministers plans to ban the sale of vehicles with combustion engines in a bid to persuade drivers to switch to electric cars.
A new study by Bloomberg News Energy Finance claims a road toll scheme charging up to 9p a mile should be introduced to compensate for the £14 billion lost in fuel duty revenue – a move that would cost motorists £710 a year.

(I should point out that said BritGov currently levies a fuel tax of just under 58p per liter — which is the equivalent of $2.91 (!!!!) per U.S. gallon.  It’s the Brits who should be reaching for the guns… oh wait, they don’t have any.  Sucks to be them.)

I haven’t even touched on how the states  will recover the lost revenue…

Remember Kim’s Iron Law of Taxation:  Never ever allow the government to create a new method of taxation / tax revenue stream because once created, it will never disappear.

7 comments

  1. “…a national system of road tolls…”

    I don’t have a problem with “User Fees” like that.
    When you rent a car you pay a user fee, but if you don’t, you don’t.
    What could be more logical?
    Yes, I am aware of the cost shifting that will occur.

  2. I’m not opposed to replacing the gas tax with a road use fee/tax/whatever once electric vehicles become more commonplace. Regardless of the motive power, the physics of vehicle tires rolling across asphalt and bridges causes wear and tear that has to be repaired, and requiring users of said roads to pay a sum towards their upkeep (above and beyond income taxes) isn’t a lot to ask. We demand users of public transit pay for the use of roads, rails, vehicle, right-of-way maintenance, and salaries of the workers at the farebox so this isn’t much different. The key is devising a scheme that’s equitable based on the weight and number of axles on your vehicle and the number of miles driven per year. But you’re bound to get some communists who’d demand that luxury electric cars be taxed more than a simple Nissan Leaf or Chevy Volt, for example.

  3. Dutch government to the Brits: hold my beer, we know a better one:
    Create a 1 Euro per kilometer road tax on top of fuel taxes (they tried that, couldn’t get the equipment to work), and then raise the fuel taxes as well (now at about 1.50 Euro per liter), and they’re now considering banning combustion engines AND electrical generation.

  4. I don’t know what the current tax is in the UK, but if we compare it to the US 18.4 cents/gallon and assume 20 miles per gallon just so the math works out roughly easily, that’s a penny a mile. Even factoring in that gas costs almost 4 times (I think? the exact value isn’t critical, so let’s go with that for now) as much in the UK, when they are floating 9c/mile, that’s a pretty big number.

    And you know it won’t be earmarked just to the roads, oh no.

    1. Currently, in CA, you pay 46.7-cents/gl excise tax on gasoline (diesel is 67-cents/gl), and you have to pay Sales Tax on the excise tax too (Sales Tax varies per locality, but average between 10.5-12.5%).
      And, they’re considering the imposition of a Mileage Tax also due to the numbers of alternative-fuel vehicles in use – an additional tax to the fuel taxes, not in lieu of. The above is just the STATE tax, added to the Federal Fuel Tax of 18.4-cents/gl.

  5. Since the drivers of the gasoline cars already pay the gas tax, the road tolls apply only to electric cars, right?

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