Lotus Europa Community
Lotus Europa Forums => Off Topic Subjects => Topic started by: BDA on Monday,August 09, 2021, 10:01:52 AM
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I got the following column about new ways to tax drivers and car owners from a buddy in our local MG club. If you live or drive in the US and you are at all concerned about taxes, you should take at look this column. I suspect that the rest of us in other countries are or will be in a similar position so it could be interesting to you too.
Uncle Sam prepares to pick your pocket, and you’ll let him do it
Jack Baruth
Patrick Bedard is known to be many things: club racer, IndyCar cup-of-coffee crash survivor, Hagerty contributor—but relatively few of us remember his tireless advocacy for motorists of all types, not just the ones who know the difference between an F355 and an F-350. In particular, Patrick liked to point out that the American motorist, as a class of human being, has long been considered to be a source of almost limitless revenue by both government and corporations.
The taxes and fees paid by the average motorist are so numerous and wide-ranging that it’s impossible to list them all. Start with the big hitters: every new car arrives at the showroom having been taxed at several points in its creation, transportation, and delivery. Many states like to wet their beak by requiring initial inspections of new cars. Most of them charge a full sales tax rate on the purchase price of the car, which is faintly ridiculous since it’s the second-largest purchase most people make—unless they are of the younger generations who will never be able to afford a single-family home, in which case it’s their largest purchase. The states charge to register the car, to inspect the car, to “smog” the car.
Having paid thousands of dollars for the privilege of buying and operating a car, the motorist must then put fuel in it, at a tax rate of between 31 and 82 cents per gallon depending on the state. If the car is electric, the buyer has to pay a state-licensed monopoly for the power, which is also taxed. What do you get for your 82 cents a mile? Not much. If you want to drive on a decent freeway, most states will charge you a toll for the privilege. You’re required in every state to purchase insurance; I personally think you’d have to be an exceptionally stupid person to drive without insurance, but state-mandated coverage is, as Bedard once said, “shooting fish in a barrel” for the companies that provide it.
All of this taxation is, to use a fancy political-policy phrase, regressive, which is to say that it falls hardest on the people who can least afford it. The total annual tax burden on my 2018 Lincoln MKT is about the same as the total annual tax burden on that 1996 Taurus blue-smoking its way between an apartment, a daycare center, and a fast-food job; it’s also about the same as what one of my friends pays on his LaFerrari, which gets similar gasoline mileage in daily use to the MKT. In almost any other situation, this kind of regressive tax strategy would have “The Squad” et al. screaming from the rooftops about the unfairness of it all—but here’s the catch: motorists, as a group, tend to be a suburban and rural bunch. Most of the policy in this country appears, to my ignorant eyes at least, to be written around the needs and desires of someone living on the Upper West Side.
Best of all for the people who make these policies, the motorist never votes as a motorist, something else Bedard noted long ago. Most people don’t remember that one of the original purposes of the AAA was to protect drivers against taxation, selective enforcement, punitive legislation, that sort of thing; it was like the NRA of cars. There was once a time when you could lose votes by preying on what L.J.K. Setright called “T.C. Mits: The Celebrated Man in the street.” Such is no longer the case. When was the last time you voted for someone based on how they treated the motorist? Was it Reagan, because he appeared willing to roll back the “double-nickel”? Or was it never?
Our current Presidential administration may be good or bad; that’s not for me to say in these electronic pages. What is not up for debate, however, is the unprecedented nature of its fiscal, monetary, and tax policies. All of this stuff is going to cost money. A lot of it. Where’s that money going to come from? Well, a lot of it will be printed, or borrowed, or invented out of thin air—but some of it will be taxed.
Buried in the 511th page of the current infrastructure bill (hat tip to our tireless contributor Ronnie Schreiber for finding it) is the following text to create a per-mile taxation “pilot program”:
The objectives of the pilot program are—
(A) to test the design, acceptance, implementation, and financial sustainability of a national motor vehicle per-mile user fee;
(B) to address the need for additional revenue for surface transportation infrastructure and a national motor vehicle per-mile user fee; and
(C) to provide recommendations relating to the adoption and implementation of a national motor vehicle per-mile user fee.
How would the fee be assessed? Well, the pilot program will offer volunteers the following options:
(A) Third-party on-board diagnostic (OBD-II) devices.
(B) Smart phone applications.
(C) Telemetric data collected by automakers.
(D) Motor vehicle data obtained by car insurance companies.
(E) Data from the States that received a grant under section 6020 of the FAST Act (23 U.S.C. 503 note; Public Law 114–94) (as in effect on the day before the date of enactment of this Act).
(F) Motor vehicle data obtained from fueling stations.
(G) Any other method that the Secretary considers appropriate.
Now, it should be noted that the results of the pilot program will be presented to the Biden Administration in three years, at which point the Administration will decide whether or not to implement said tax. Those of us who are married and who buy classic cars—probably a lot of you, I’d imagine—are familiar with this kind of strategy. “Oh, honey, I’m just going to wander over to that dealership with all the ’60s Corvettes and look around. I’m not actually going to buy one. I’m just taking a look at the market.” Believe it or not, after hearing this line your spouse is not surprised when you come home with a big-block ’66 convertible.
Similarly, it seems highly unlikely that the Federal Government will go to the effort of developing a comprehensive per-mile tax strategy and just, you know, leave it in the showroom. Of course there will be a per-mile tax. The states are looking at it as well; Pennsylvania is talking about replacing its gas tax with an eight-cents-per-mile tax. Currently, PA charges 58 cents per gallon, so if you drive anything that gets better mileage than a ’76 Eldorado, congratulations! Your taxes just went up.
Don’t be naïve or hopeful enough to think that the federal per-mile tax would actually replace today’s 18-cent federal gas tax, because that money has already been allocated and spent six ways to Sunday on things that have very little to do with roads or infrastructure. It would just be more icing on top of the federal tax cake. To make matters worse, this might be one of those taxes where the method of collection is more punitive than the actual molestation of your wallet. Every one of the methods listed in the infrastructure bill to actually calculate your per-mile tax would be remarkably disrespectful to your privacy. I can’t quite figure out which one of them is the worst of the bunch. Probably C), “telemetric data collected by automakers.”
Nor should you bury your head in the sand and say, “This kind of thing will never make it through the legislature.” Let me explain something to you: this per-mile tax is a classic case of being able to vote money out of other people’s pockets. The City Mice among us will cheerfully back any tax that falls exclusively on Country Mice. Even the Suburban Mice will hold their noses and agree; they’re only commuting what, 500 miles a month, on average? Eight cents a mile, that’s 40 bucks. Who cares?
As for me and my house, however, we will fight this one a bit. In the past three months, I’ve driven almost 11,000 miles with my son, visiting bike parks from New Hampshire to New Mexico and parts between. We’d be looking at maybe $1500 in combined per-mile charges on a federal and (projected) state level, over and above everything else. We’re not alone out there; tonight we are in Fraser, Colorado, and I see license plates from Tennessee to California on the town’s streets.
Will my opposition matter? Not one bit. Very few people will change their vote based on a per-mile tax. Most of the Country Mice are already voting against this administration for other reasons; many of the City Mice view anything that hurts Country Mice as a public and social good, so they’d be fine if the per-mile tax were 80 cents a mile, or eight dollars, or one-eighth of a pint of blood. The only statistic that matters is this: Americans drive more than three trillion miles a year. At eight cents a mile, that’s $240 billion. Admittedly, the federal government runs a $200 billion deficit pretty much every month—but, to coin a phrase, $240 billion here and $240 billion there and pretty soon you’re talking real money.
What can be done about this? I have no idea. Write your representative. Tell a pollster you don’t like it. Uh, vote harder or something like that. Or you could start thinking of yourself as a motorist in addition to being a Democrat or a Republican or a gun owner or a property owner or an agent of social change or whatever else you’ve adopted as a political identity. The concept of political motorist is a little dusty, when you open the barn door there’s a strong whiff of Model T about it. That doesn’t mean it’s not worth cranking over to see how it runs. I think Patrick Bedard would approve.
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The Empire is failing, they all do eventually. $1 trillion for defense, $1.2 trillion on infrastructure. Billions yearly to many countries, mostly to one country that has universal healthcare and a big wall while we have neither.
Govtrack.us keeps records on what politicians voted for and sponsored or co sponsored. Unfortunately you can't find out what the super pacs get for their donations other than Aipac. Most people don't care enough though. As long as they make enough to buy their new phone they are happy and will keep waiving their flag. Even in the Feudal medevil days, the peasants loved their oppressive Kings.
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I can't disagree with a thing you said but I don't want to get any more political than that here (maybe that's too much for some?).
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Knew this was in the works as soon as my state began mandating annual mileage reports at registration.
No third party device required, your car already has an odometer.
Some cars have an electric speedometer that can be turned off.
"Pro-Tip", most Porsche's have much higher mileage than what is shown.
Sadly I am almost completely unrepresented in DC these days but I will call my one remaining Congressman.
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I am somewhat lucky in that my Lotus is grandfathered for annual inspections (i.e. it is never inspected by or for a governmental agency or agent.). On the other hand, my wife won't ride in it for more than about a mile! :D
The other slightly positive thing is that since I retired, my wife, my daughter and I drive very few miles.
None of that should be interpreted as acquiescing to this. I'll be writing my congress critters to tell them how I feel.
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What an interesting thread. Up here in Ontario we are currently paying $4.10 US per US gallon for regular. Nearly 50% is tax. Yes I agree that taxes hurt. We have a national carbon tax which penalizes heavy consumers and refunds to low consumers. Taxes = Civilization. I have some questions.
1. How do we reduce our global reliance on climate destroying hydrocarbons?
2. How do we fund alternative (less polluting) people transportation?
3. Should we all share in preserving this planet for future generations?
4. Is unbridled capitalism broken?
4. Are Europa's not the coolest cars ever?
I have chosen to drive a car that gets 47 MPG US ( will replace with a hybrid when this one dies) . Increased the insulation in my house. Think globally act locally. We don't have any where else to go yet.
Sandy
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"Tax" of the citizenry is properly spelled THEFT and is not a requirement for civilization.
I would argue more of the above points but that would probably get me in trouble with moderators.
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As a traveling salesman who did 1200 miles last week I must say this is alarming.
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I drive quite a bit too........
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Being retired I now drive less than 20 miles a month, down from 600 a week. I also drove on a toll roads. Also paid bridge tolls and dual state taxes .
My point, it’s a vicious cycle , humans always want more. We need to reverse the cycle, let’s pass a law everything is now half , your pay , your taxes. This is where we can save , stop putting more comfort items into your life , your car , your house. Stop buying granite countertops and gazillion dollar
Refrigerators with a laptop on the door to remind you to buy a gallon of milk. Technology is good but what is the breaking point? Don’t get me started about these idiotic pay scales of actors, athletes, CEO’s. Always want more!
I reached my breaking point and started saying, NO .
Sorry in advance , for venting.
Dakazman
Dakazman
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Cheers Dakazman :I-agree:
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Thank you Dave. I look forward to a reasoned civil discussion on how we can work to resolve the issues brought up in this thread.
Sandy
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Here's my partial solution:
A significant source of funds for highways and roads is the gasoline tax. Since electric cars do not use gasoline, they should be subject to a per mile tax. Also, electric cars are subsidized (I think that's still true) at the sale at least. Those subsidies should be ended and the money that would have gone to them would be directed to highway funding (i.e. electric cars would be taxed the amount of the current subsidy).
This is certainly not a complete solution since part of the problem with funding highways from a gasoline tax is that as gas mileage has increased over the years, the amount of tax collected per car is less. Possibly a small increase of the gasoline tax is warranted though I am loathe to give more money to people who enjoy spending it so much.
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My current commute is 134 miles per day worked, multiplied by however many days work is available.
Generally around six hundred miles per week, and a hundred dollars in gas.
So already paying "My Share" of fuel taxes, while the EV's only pay miniscule electric tax which does nothing for the roads.
Which is what I related to my one sane congressman.
Senate passed the feculent bill this morning and I bet this is stil in it.
Did I mention that I've found an answer to the problem of Europa speedo cables being so long and unreliable?
It's an electronic interface that drives a short cable at the speedo head.
Easy turned off at will via a simple ground switch.
There is also a GPS based version.
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Richard and BDA. thank you for your great ideas. It is up to all of us to keep our elected representatives honest. Making sure that all road taxes go there and not into the black hole of general revenue. Taxing usage is a fair way to share the burden.
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Buried in the 511th page of the current infrastructure bill (hat tip to our tireless contributor Ronnie Schreiber for finding it) is the following text to create a per-mile taxation “pilot program”:
This exactly how "Third eye" brake lights were foisted on us.
First a study and recommedation, then a vouluntary "Pilot Program", (NYC Taxis in that case) then mandated by Fed. Gov. The Pilot Program is a fig leaf, the decision is made long before!
Fed. Gov. actually has no authority to mandate this to the states.
So they will AGAIN blackmail state legislatures with the threat of lost Fed. highway funding.
So it will be "Our" own craven state legislatures that grovel and comply.
Remember the Double Nickle? Same lousy deal.
Would not be so bad if this REPLACED the current tax per gallon, but we all know it will be IN ADDITION to current taxes.
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Richard, as a Europa owner we already know that you are a smart person. I would love to hear what solutions you are thinking of. How do we better share and control our tax burden? What can we do to reduce our dependence on polluting hydrocarbons?
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The truth cannot be spoken aloud as it is not PC and Cancel Culture thuggery then gets involved.
Not a simple subject but not nearly so complicated without the PC.
We might start by ceasing to move the goal post so often, let the auto industry catch up and truly perfect their answers.
Personally I intend to continue consuming fossile* fuel for the rest of my days.
*As most should know by now, there is nothing "Fossile" about our fuel.
The green Dino's at gas stations are really out of date, or pandering to popular ignorance.
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OK, I just remembered another partial "Solution" from several years ago that could be dusted off and implemented.
If pursued it would be a double win, we get light oil and keep tons of wast out of land-fills*.
It's a bit arcane now as even though the Tech worked the business model did not.
It was called Thermal Depolymerization, AKA "Anything into oil".
Last I looked there were still some valid links to discussion of it on the web.
Basically the process mimics the natural one, heat and pressure break down the molecular chains of whatever is put into the vats.
The earth does this by subduction, TD uses grinders, steam, and pressure.
TD is claimed to be able to recycle anything that is non-Nuclear.
A pilot plant was built and functioned as designed.
In addition to oil it produced chemically pure minerals.
And yes, it recovers the trace metals such as gold and platinum.
But as a business it failed.
Why? Simple, bad assumptions in the business plan.
It was assumed that the process would be subsidized as other energy/oil production was.
It was also assumed the major feedstock of "Turkey Offal" would be "Free" since pending legislation would have made it illegal to feed "Animal remains" to other animals such as cattle.
Neither of those happened.
Turkey offal has other markets so Tyson wanted to be paid for it.
"Big Oil" was not interested in competition and has plenty of lobbyist.
To put this into context the time frame was pre-Fracking, and the "Mad Cow" scare was in full swing.
Now here is where I begin to risk offense to the overly sensitive. I am not a PC supplicant, you might have already guessed that. ;)
If the Greenies/Eco-Nuts REALLY want to "Save the earth" as they so stridently claim, they would be demanding TD plants near every moderate or large sized city.
Old tires, trashed computers, plastics, animal offal, and even the mountains of currently useless oil production residue (Cannot bring the name to mind at the moment, sorry.) plus thousand more items could all be recycled using TD.
But the Greenies are abhorrent of the mere thought, as OMG, some amount of Oil would be produced!
So here we have a proven technology that produces sulphur-free oil that is almost ready to pump into a diesel engine as it comes out of the pipe.
It takes a lot of Waste to produce each gallon of Oil so is really more of a clean-up process than oil production facility under current economics.
We subsidize all sorts of industries with less clear dividends. Municipalities spend millions to dispose of waste with no return expected.
With TD they might at least fuel some of their vehicle fleet.
For the record, I have no stocks or other financial interest in TD and have written this from memory.
This is not a definitive treatise on the subject so please do your own research if I have piqued your interest.
*Of course keeping waste out of land-fills would annoy the land-fill operators.