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Washington State Considering a Tax on Electric Vehicles

By JLP | April 25, 2011

There’s no getting away from taxes…

Washington considers annual flat fee for electric cars

“Electric vehicles put just as much wear and tear on our roads as gas vehicles,” said Democratic state Sen. Mary Margaret Haugen, the bill’s lead sponsor. “This simply ensures that they contribute their fair share to the upkeep of our roads.”

“…their fair share…”

That’s got to be one of the most obnoxious phrases that politicians use, in my opinion.

In Oregon, lawmakers are considering a bill to charge drivers of electric and plug-in hybrid vehicles based on the number of miles they drive. In Mississippi, lawmakers briefly considered a similar plan. In Texas, significant opposition scuttled an electric vehicle fee.

I’m against these fees. People pay fees when using electricity to charge their cars. I definitely don’t like the taxes to be based on the number of miles driven as it seems too intrusive and too much like a “big brother” scheme.

According to the article, the $100 fee would still be a bargain as people who drive a vehicle that gets 23 MPG an average of 12,000 miles per year, pay roughly $200 in gax taxes to the state of Washington.

Topics: Taxes | 43 Comments »


43 Responses to “Washington State Considering a Tax on Electric Vehicles”

  1. Russ Says:
    April 25th, 2011 at 10:14 am

    “Fair share” is code word for we have no other logical reason to charge it, but if we use a catch phrase, people won’t be nearly as upset.

    All these nickel and dime taxes are ridiculous. Politicians have become adept at figuring out how to raise taxes without calling it an income tax increase.

  2. JLP Says:
    April 25th, 2011 at 10:27 am

    Russ,

    I agree.

  3. JLP Says:
    April 25th, 2011 at 10:30 am

    Russ,

    And to your comment I might add that all these nickel and dime taxes make it virtually impossible to determine how much we actually pay in taxes.

  4. Jack Says:
    April 25th, 2011 at 10:37 am

    They cannot even take a general definition of “fair” and then say how their political ideas fit that definition.

  5. BG Says:
    April 25th, 2011 at 10:40 am

    JLP) You need to provide an alternative tax structure if you don’t like the existing or proposed ones.

    “People pay fees when using electricity to charge their cars.”

    I highly doubt any state has a tax on electrical usage for road construction and maintenance like gas usage. Most states have a per-gallon gas tax built into the price at the pump. In TX, the tax is: 20 cents per gallon, plus a 6.3% sales tax.

    Washington has a 37.5 cent per gallon gas tax, plus a 6.5% sales tax. If you have an electrical vehicle, you can use the exact same roads and bridges that the gasoline drivers PAY for. Why should the electrical cars be allowed to use the same roads and bridges without paying their fair share? Or do you propose that it _is_ fair for electrical car owners to be allowed to use the roads & bridges that they would be paying nothing for?

  6. BG Says:
    April 25th, 2011 at 10:42 am

    Oregon has a 24 cents per gallon tax (no sales tax). I erroneously thought the state under question was Washington.

  7. Russ Says:
    April 25th, 2011 at 10:49 am

    BG, there is no end to that logic which is why these taxes make no sense. One could argue that by not driving a gas vehicle, they are not contributing to other systematic costs (wars, etc) which more than offsets the tax generated from not having to buy gasoline.

    People need to get out of this mindset that everything has to be “fair”. Nothing in life is fair. Get over it. Not to mention, people’s definition of fair seems to change depending on where they sit.

  8. JLP Says:
    April 25th, 2011 at 10:50 am

    The article was primarily about Washington but it also included some of what other states are considering.

  9. BG Says:
    April 25th, 2011 at 10:52 am

    “People need to get out of this mindset that everything has to be “fair”. ”

    People need to get out of the mindset that they should be able to have roads and bridges for free.

  10. Russ Says:
    April 25th, 2011 at 11:00 am

    @BG, good leap in logic. No one is arguing that roads and bridges should be free. Should we tax people who ride bicycles too? How about people who walk?

    I just go back from NY, I must have walked 20 miles over the course of a week. Should I have to pay a tax considering I was walking pretty much on the same roads that cars drive?

    On one hand, the Govt wants people to get off using gas, but if they keep taxing electric cars at the same rate, the economics of getting off hydrocarbons for transportation start to change thus negating any benefit of going green. We can’t have it both ways. Going green also has to make economic sense…

  11. JLP Says:
    April 25th, 2011 at 11:02 am

    I agree that roads and bridges must be paid for. Perhaps they should restructure the way in which they collect taxes. If “fair share” was their goal in the first place, they wouldn’t have created the gas tax.

  12. BG Says:
    April 25th, 2011 at 11:04 am

    “No one is arguing that roads and bridges should be free.”

    Good, then if not for a gasoline tax (and side taxes for natural gas and electric cars), what do you propose?

    “Should I have to pay a tax considering I was walking pretty much on the same roads that cars drive?”

    I’m sure you were walking on side-walks, not roads.

    “On one hand, the Govt wants people to get off using gas, but if they keep taxing electric cars at the same rate, the economics of getting off hydrocarbons for transportation start to change thus negating any benefit of going green.”

    DING, DING, DING — we have a winner! Thanks for admitting that most of the ‘winnings’ from going green is tax avoidance.

    “Going green also has to make economic sense…”

    I agree — going green should make economic sense ON ITS OWN, not because of tax avoidance or other loopholes in the tax code.

  13. Mark Says:
    April 25th, 2011 at 11:05 am

    I seldom agree with BG on much but in this case …

    Gas taxes (if actually used for roads, etc.) are based on the “User Pays” principle. They are effectively a user fee.

    In that sense, they are about as fair as they can be without being excessively complex. Presumably people who buy more gas, use the roads more either by driving more miles or because their vehicles are larger and heavier.

    It’s not a perfect system, but fairer than most.

    As for gas tax subsidizing war – what nonsense. We all know these wars are to keep America safe and to spread democracy and freedom to every corner of the globe :) :)

  14. David Says:
    April 25th, 2011 at 11:14 am

    Simple solution: privatize all roads. Let the market decide how much you pay for your fair share.

  15. BG Says:
    April 25th, 2011 at 11:20 am

    JLP) A tax based on the weight of the vehicle and the odometer readings every year, that would be my idea of ‘fair’ here.

    As Mark said, gasoline / diesel taxes were the best way, up until the point where the engine under the hood no longer runs on that fuel.

    Russ) BTW: the fuel that your electric car runs on is predominately from burning coal & natural gas — 70% of all electricity in the US is created this way.

  16. Matt Says:
    April 25th, 2011 at 11:39 am

    I’m with Mark and BG on this one. The gas tax is pretty much the most fundamentally sound implementation of a use tax I can think of.

  17. Matt Says:
    April 25th, 2011 at 11:41 am

    BG: Also with you on vehicle weight and odometer. Semi and transport trucks cause significantly more road damage than passenger vehicles, but the tolls and fees are exactly equitably weighted to reflect that. However, the downside to raising taxes or fees on trucks is that the increase will be passed on to consumers in the form of higher prices. So that’s a no-no for most people.

  18. Jack Says:
    April 25th, 2011 at 11:52 am

    No, Matt, they are not. Road damage occurs as the 4th power of the axle weight. So a 50,000-pound truck, running 10,000 pounds per axle, does 640 times the damage of a 5000-pound car.

  19. Matt Says:
    April 25th, 2011 at 11:56 am

    Jack: Oops, just reread my comment and meant to say “aren’t exactly equitable.” To simplify: trucks should pay much higher tolls and taxes than they do, but they don’t because we would all pay more for the things we buy. FIXED.

  20. Jack Says:
    April 25th, 2011 at 12:01 pm

    And, Matt, people are paying higher prices through having to repair the roads the truck run on. We need to pull our collective heads out and either tax trucks in proportion to the damage they do to the roads, or we need to have more public funding of cargo rail construction. (To any who might ask, facilitating cargo rail seems to me to be a direct application of “General Welfare of the States” part of Article I, Section 8.)

    Cargo rail is far more efficient than long-haul trucking. The only reason long-haul trucking exists is the Interstate Highway System — and the trucks do not pay what they should to use it.

    Finally, getting the long-haul trucks off the roads will save lives, too.

  21. Matt Says:
    April 25th, 2011 at 12:03 pm

    Jack: With you on ALL counts. We actually do have decent rail infrastructure for transporting goods (not people), but we can do much, much better.

  22. BG Says:
    April 25th, 2011 at 12:41 pm

    “However, the downside to raising taxes or fees on trucks is that the increase will be passed on to consumers in the form of higher prices. So that’s a no-no for most people.”

    Tax them, and tax them appropriately! Let the businesses raise their prices. It is only the customers of THOSE business who will be paying the higher prices.

    Business that use the more fuel-efficient rail system would not have those higher costs to pass onto THEIR customers.

  23. Mark Says:
    April 25th, 2011 at 2:16 pm

    JLP just proposed to review Basic Economics in his post after this one. I assume one topic will be how costs that are not allocated to the true consumer lead to waste and inefficiency.

    Failing to make users pay for the full cost of their goods (e.g. by having the tolls on trucks too low or the gas tax too low) is an example of exactly that.

    The classic example usually used is pollution – if I can pollute for free, then why would I clean up after myself? I don’t have any incentive to not make my neighbors sick.

  24. Jon Says:
    April 25th, 2011 at 2:19 pm

    I understand BG’s position. And it makes more sense than JLPs et. al. I still disagree with her position though.

    David it right, if you truly want fair than you would privatize the roads, like they used to be. Then, if businesses in Las Vegas want to build/maintain a road for Californians to come to their casinos, they can, with no user fees. But other places could just charge user fees. Or do it however they find is the best way for their area.

    If we did this, then maybe the liberals would be more happy about less urban sprawl, since it would cost more to drive the distance and disensentivize people from driving so much.

    And maybe it would make trains/public transportation actually feasible, right now, with socialized roads there is no economic feedback loop to tell what system is truly the best so our wonderful central planners have to guess what way is the best, which, most times, turns out wrong. (Just look at socialized nations, especially Russia, etc.). Socialism just doesn’t work.

  25. Jon Says:
    April 25th, 2011 at 2:20 pm

    “The classic example usually used is pollution – if I can pollute for free, then why would I clean up after myself? I don’t have any incentive to not make my neighbors sick.”

    It’s called property rights, enough incentive to get people not to pollute.

  26. Matt Says:
    April 25th, 2011 at 2:29 pm

    Mark, Jon: Precisely the value of cap and trade (the liberal returns!). You cap the level of certain emissions and allocate units to polluters. Those that need more units buy them from those that need less; hence, the incentive to pollute less so you have units to sell. For the life of me, I don’t understand why the proponents of the carbon cap and trade initiative haven’t been talking more about the success of the SO2 and NO2 cap and trade markets during the 90s.

  27. Matt Says:
    April 25th, 2011 at 2:40 pm

    Jon: You’re making a couple of logical leaps there. First, there’s a critical agency problem with your plan to privatize all roads. There are few agents with the means or capacity to build a new road or maintain it, meaning you end up with monopolies (I know, you probably consider the gov’t itself a monopoly, but that’s another argument). Second, it’s a HUGE leap to infer “socialism” when you’re talking about roads. If that’s socialism, then just about every country in the world is socialist.

  28. Jack Says:
    April 25th, 2011 at 3:10 pm

    As with cargo rail, the IHS clearly falls within the General Welfare of the States part of Article I, Section 8.

  29. BG Says:
    April 25th, 2011 at 3:32 pm

    “You cap the level of certain emissions and allocate units to polluters. Those that need more units buy them from those that need less; hence, the incentive to pollute less so you have units to sell.”

    It is hard to call the by-product of respiration: pollution — otherwise you start to tax the breath of life itself. I, for one, have serious doubts of the classification of CO2 as pollution. An average person generates 839 pounds of CO2/year from breathing.

    Now Mercury, and all the other nasty by-products of fossil fuels, I can agree with…

  30. Matt Says:
    April 25th, 2011 at 3:48 pm

    @BG: “I, for one, have serious doubts of the classification of CO2 as pollution.”

    Ok, really not meaning to throw things off the rails here, but you kinda forced my hand…I referenced the SO2 and NO2 markets because those have been highly successful at limiting and reducing the incidence of airborne compounds that critically impacted long-term public health, safety, etc. I’m gonna go with the overwhelming majority of planetary scientists who classify carbon dioxide emissions in precisely the same fashion. So YOU can have whatever doubts you want. I’m going with the people that do this for a living.

  31. BG Says:
    April 25th, 2011 at 4:06 pm

    Matt) If you are going to classify CO2 as pollution by humans, then you need to classify O2 (oxygen) as pollution by plants…

    Both are extremely common in the atmosphere, and both are used by living organisms.

    SO2 and NO2 are toxic to life (except for some bacteria maybe), hence they are pollutions. What long-term public health/safety problems do we have with CO2?

    Has the government had to go out and create a Superfunder cleanup site because some company tainted the earth with CO2?

  32. Jack Says:
    April 25th, 2011 at 5:16 pm

    CO2 concentrations have been higher, and temperatures have been higher. We didn’t die out. In fact, it was after the end of the last glacial period that civilization arose. This current interglacial period is, in fact, one of the longest. I’d rather it not end.

  33. Leland Says:
    April 26th, 2011 at 3:57 pm

    @ Jack, BG & Matt: You can take offense if you want, but I’m going to throw my lot in with the scientists too.

  34. BG Says:
    April 26th, 2011 at 6:40 pm

    Leland) The scientists are probably right on Global Warming, no doubt.

    The question I have: what are the economic costs for having a warmer planet, that we’d want to tax such “pollution” to prevent?

    I don’t see global warming as necessarily a bad thing (that needs to be prevented)…

  35. Jack Says:
    April 26th, 2011 at 8:15 pm

    Leland, you are as welcome to be wrong as any of the scientists. But any climate change theory must also account for the observed warming on Mars, the Jovian satellites, and even Pluto — which is RECEDING from the Sun yet still warming. Anthropogenic global warming does not account for those observations. Furthermore, the climate models do not account for the most powerful global warming gas — water vapor. Neither do they have cloud models. Their predictions up to this point have been demonstrably wrong.

    But you are welcome to just go along with whatever the scientists say to get their grant money from the government.

  36. BG Says:
    April 27th, 2011 at 8:54 am

    Jack) it is hard enough to convince people that our own planet is warming, much less pointing to other celestial bodies as indication of solar-system wide warming (as if we’d ever have the data). Pluto’s elliptical orbit takes 248 years — no way we have data for Pluto’s temperature for even a fraction of one Pluto year, much less for many Pluto years to statistically be able to show a trend. I can make the same arguments for the other bodies you mention. Mars’ atmosphere is 95% CO2, ours is less than 1%, etc, etc.

    The scientists have me convinced: what is missing is a cost-benefit analysis of the proposed “solutions” (taxing CO2 emissions) relative to the “damage” the continuing CO2 emissions will cause.

    If the “damage” is minuscule, and the costs for taxing CO2 are extreme — then that will never fly.

  37. Jon Says:
    April 27th, 2011 at 9:07 am

    Why is my comment in moderation?

  38. BG Says:
    April 27th, 2011 at 12:07 pm

    Jon) probably because it contains a hyperlink.

  39. Leland Says:
    April 27th, 2011 at 12:50 pm

    @Jack: “But you are welcome to just go along with whatever the scientists say to get their grant money from the government.”

    It seems far fetched that there is a government funding 98% of the whole world’s scientists. What does that government gain from it? I find it much more likely that Oil & Gas interests have managed to corrupt 2% of scientists in order to manufacture the facade of a real dispute in the scientific community in order to protect money. As was modeled in the tobacco industry.

  40. Jack Says:
    April 28th, 2011 at 8:49 am

    Government controls far more money that oil and gas companies do, and has much more power. That is what governments gain with the global warming excuse — more power.

  41. Leland Says:
    April 28th, 2011 at 10:52 am

    So is your argument that the world’s governments are colluding to fund all climate scientists or that our government is funding them all? I’m also confused about how global warming gives governments power.

  42. thomas Says:
    April 28th, 2011 at 1:54 pm

    I’m in Washington and all for ending the electric subsidy for these vehicles. Some here have said it’s a tax, I call it the end of the green subsidy. I hate the term fair share, but normally when this is used, it is to demonize the rich into paying more than what they currently do. In this situation, the electric cars are not paying at all, which likens them to the welfare/moocher class.
    It was mentioned in earlier comments, but the solution should either be a flat fee “road tax” or based on weight/axle of the vehicle.

  43. Joe Says:
    June 23rd, 2011 at 9:43 am

    If the gas tax is meant to provide the funds for roads and bridges, why did we need a near $trillion “stimulus” bill for “shovel-ready” high way jobs?

    Because politicians claim that tax revenue is “set aside” to fund one thing, then proceed to spend that money 2-3 times over on other, unfunded projects.

    Before you know it, we’ve got $14 trillion in debt, adding $1.6 Trillion per year and government wants more!

    Bottom line: They have proven to be irresponsible with the revenue they already collect, they should fix their mess and get by with what they already take from us.

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