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Highway funding ideas include taxes on hybrids

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Comments

  • falcononefalconone Posts: 1,726
    About 35 or so posts back I created a monster. I completely took a fictional SMALL number out of the air to emphasize my point about how SMALL the hybrid market is.

    After reading about all the high mileage cars with gas and diesel engines that MAY be coming to our shores I just got really excited. I want that BMW that gets 50MPG!!!

    To all you hybrid owners: Don't worry... you will NEVER, EVER have to pay extra for the privilege of using the roads of the US. Ain't gonna happen.

    To everyone else: Let's clean house (senate/congress) and get some people that know how to run a country. As for me, I don't mind paying an extra $500-$1000 a year for better roads. Heck...it may get some people off the roads which will be a GOOD thing.
  • stevedebistevedebi LAPosts: 4,098
    "Actually aren't Hummers subject to the gas guzzler tax?"

    I believe they are considered trucks over 6000 lbs. They are not subject to CAFE and I don't think they incur a gas guzzler tax.
  • rorrrorr Posts: 3,630
    A completely fictional number to prove a point? Don't you know that some of us in here like nothing better than to pounce all over numbers like that? :blush:

    NO soup for you!

    I think most of us are aware that there ain't a snowball's chance that hybrids would get singled out for an additional gas tax. That doesn't mean it can't be discussed.

    Re: cleaning house in the congress - I have two words for you: TERM LIMITS!
  • snakeweaselsnakeweasel a Certified Edmunds Poster.Posts: 13,458
    If you read what I said the total effect, since there are supposively 250,000 hybrids the total effect of each hybrid driving one mile is 250,000 miles. Since 250,000 hybrids each driving 1 mile will, on average, use about 3,700 gallons less fuel than 250,000 non-hybrid alternatives the effect of all those hybrids driving 1 mile is a loss of $680.80 (3,700 times 18.4 cents) in taxes.

    2008 Sebring Ragtop, 2011 Hyundai Sonata.

  • stevedebistevedebi LAPosts: 4,098
    "To all you hybrid owners: Don't worry... you will NEVER, EVER have to pay extra for the privilege of using the roads of the US. Ain't gonna happen."

    I happen to disagree. The roads have to be maintained, and the money will have to come from somewhere. As others have pointed out, as high MPG cars (of whatever type) become more prevalent, the problem will come to the fore.

    Various possibilities:

    1. Tax higher mpg vehicles separately. (The subject of this Forum)

    2. Implement a mileage driven / vehicle weight based tax.

    3. Engine size tax (similar to Europe), gathered at vehicle registration annually. This rewards smaller, more fuel efficient engines as well.

    4. {Enter your ideas here}
  • rorrrorr Posts: 3,630
    "4. {Enter your ideas here}"

    Simple bump to the current gas tax. Or converting it from a set cents/gallon to a %/gallon (sales tax).
  • snakeweaselsnakeweasel a Certified Edmunds Poster.Posts: 13,458
    A few flaws in that. First is that you cannot use the 18.4 cents a gallon since 2.86 cents per gallon goes into a mass transit fund and .1 cent a gallon goes into "other funds". That takes your 650% increase to 550%. Secondly that 4 cents a gallon was from 1959 so if that fuel consumption increase is from 1983 then you have to use 9 cents a gallon (the tax in 1983) now your increase is 240%. Add to that more miles driven, more roads to maintain and inflation and you have yourself a major short fall.

    2008 Sebring Ragtop, 2011 Hyundai Sonata.

  • snakeweaselsnakeweasel a Certified Edmunds Poster.Posts: 13,458
    I will second rorr on in just adjusting the current tax plan. But I will add adding a major road use tax on hay (Amish use the roads too you know). ;)

    2008 Sebring Ragtop, 2011 Hyundai Sonata.

  • larsblarsb Posts: 8,204
    That's a nicely thought out equation, but not reality.

    Reality is this:

    a 50 mpg vehicle pays $90 PER YEAR in gas tax for 500 gallons

    a 25 mpg vehicle pays $180 PER YEAR in gas tax for 1000 gallons to drive the same distance

    That's only $90 per year per hybrid of "lost" revenue, which in total is $22.5 million per year for the entire USA.

    If your $680 per mile figures are used, that would be two and a half TRILLION dollars in lost revenue per year !!! (ROFLMTO) :shades:
  • newt5newt5 Posts: 15
    > 3. Engine size tax (similar to Europe), gathered at vehicle
    > registration annually. This rewards smaller, more fuel
    > efficient engines as well.

    Having lived in Ireland, I can tell you the result of this. They calculate the tax based on # of liters. This results in 1.98 liter engines (to stay below 2.0) with turbos. This kind of defeats the purpose since you could crank up your turbo and get a really fast poor gas mileage car. Moreover, this doesn't take into account vehicle weight. I suppose you could base it on HP/vehicle weight ratio, but I'm sure car manufacturers would find some way around this to minimize the tax a person would pay without.

    As much as we all hate them, toll roads work and you can easily charge for greater usage based on # of axles.

    I know, I only pose problems, not solutions.

    Newt
  • snakeweaselsnakeweasel a Certified Edmunds Poster.Posts: 13,458
    OK your figures are a little off as it presumes 25,000 miles a year which is much higher than normal. But lets look at that with your figures. A loss of 22.5 million divided by the 25k miles you say the average driver drives is $900 per average mile.

    Proof

    $900 X 25,000 (average amount driven) = 22.5 million.

    Gee your figures agree with mine (adjusted for minor differences in MPG).

    Thank you for proving my point.

    So I stand by my statement that every average mile driven by hybrids as a whole cost almost $700 in taxes.

    2008 Sebring Ragtop, 2011 Hyundai Sonata.

  • tpetpe Posts: 2,342
    The 4 cents per gallon may have originated in 1959 but that was also when the plan to build the interstate system originated, right? That was major new construction, which as another poster pointed out is more expensive than maintenance.

    There is nothing unfair about the current system because the buyer of a low mpg vehicle knows prior to purchase what he is getting into. If he doesn't like it then he has the option that everyone else has to purchase a more efficient vehicle. If all drivers did this would that reduce revenue? Absolutely, and we'd have to raise the fuel tax to account for this. The government would have its funding with less gas being burned meaning less CO2. Isn't that the goal? You posted earlier that miles driven is inelastic to price. I disagree but let's say you're right. Then the only way to burn less gas is to drive more efficient vehicles.

    I personally don't like the idea of using a percentage of the gas price due to the fact that gas prices have become far too volatile. It would be just too difficult to accurately project revenue. I think we just have to bump up the 18.4 cents a gallon and not be afraid to do so whenever needed.

    I think this whole debate could go away if we changed the public mindset that this revenue's sole purpose is road construction/maintenance. Other countries just call it a Carbon tax. It certainly isn't unprecedented for the government to use the tax code or fines to discourage behavior that is considered detrimental to our society. Our officials publicly state that reducing fuel consumption is in the country's best interest. That being the case fuel taxes in their present form are not inconsistent.
  • larsblarsb Posts: 8,204
    quote-"So I stand by my statement that every average mile driven by hybrids as a whole cost almost $700 in taxes."-end quote.

    Your math is wrong - no way it's $700 a mile !!

    Let's say 15,000 miles per year, per hybrid.

    15,000 miles at 50 miles per gallon means 300 gallons.

    300 gallons times 18.4 cents per gallon is $55.20 paid in gas taxes per year.

    Any quibbles to this point? Is that math wrong?

    OK, so lets go to a 25 MPG vehicle.

    15,000 miles per year at 25 mpg means 600 gallons.

    600 gallons times 18.4 cents per gallon is $110.40 paid in gas taxes per year by the 25 mpg car.

    That's a loss of $55.20 PER HYBRID for 15,000 miles driven, which averages to 0.00368 cents per mile !!!!!

    $55.20 times 250,000 hybrids is $13,800,000 lost for the WHOLE HYBRID POPULATION for the WHOLE YEAR for the WHOLE USA !!!

    $700 per mile driven would be

    700 times 15,000 miles per car per year THEN THAT times 250,000 hybrids, which would be 2.625 TRILLION dollars a year !!!

    Good Gosh man come to your senses !!! :mad:

    PS
    Someone else please chime in and tell the forum that my math is correct !!!
  • tpetpe Posts: 2,342
    Toll roads. How about this. Eliminate gas taxes completely and make every stretch of road a toll road. Compute the toll for each stretch of road by dividing the amortized cost of construction and maintenance for that stretch of road divided by the number of cars that travel it. I think that people would be surprised by what the resulting tolls would be. I suspect that a lot of our roads that currently have tolls on them would actually be some of the cheapest to drive. And the most expensive tolls would be on the roads located in the suburbs or rural areas.
  • larsblarsb Posts: 8,204
    Aren't toll roads fairly costly to install and maintain?

    And what about people who have commutes like me, who rarely leave City streets?
  • snakeweaselsnakeweasel a Certified Edmunds Poster.Posts: 13,458
    Maybe you should come to your senses.

    I will type this slowly so you can follow along.

    For every mile the average hybrid drives close to $700 will be lost in tax revenue. Since there are 250,000 hybrids out there that means for every mile the average hybrid drives means that 250,000 actual miles are driven (do you understand that?). In that 250,000 miles hybrids will use 3700 gallons less and the tax rate is .184 per gallon that results to just under $700.

    700 times 15,000 miles per car per year THEN THAT times 250,000 hybrids, which would be 2.625 TRILLION dollars a year !!!

    We are not talking $700 per mile per vehicle, if you would actually read my post you would know that. We are talking about the accumulated effect so it would be:

    $700 times 15,000 (the average miles driven) = 10,500,000.

    FORGET ABOUT THE 250,000 since it is already figured in the $700.

    Again I stand by my statement, the accumulated effect of hybrids driving one mile is a tax loss of just under $700.

    2008 Sebring Ragtop, 2011 Hyundai Sonata.

  • gagricegagrice San DiegoPosts: 31,134
    Someone else please chime in and tell the forum that my math is correct !!!

    I am following your math. The $700 mile lost me also. I might add the road tax in CA is about 50 cents a gallon. So you can see it can become a large loss of revenue in the future.
  • gagricegagrice San DiegoPosts: 31,134
    FORGET ABOUT THE 250,000 since it is already figured in the $700.

    Now I follow your line of thinking. You have to be an HP calculator person.
  • tpetpe Posts: 2,342
    I imagine some toll roads are much more expensive to build and maintain, especially when bridges or tunnels are involved. But I've driven on many toll roads that seem no different than the non-toll road that I just got off and they have the same level of traffic if not more. Therefore they must be generating as much gas tax revenue as the non-toll road and I find myself wondering how it was decided that this stretch of road requires an additional charge. If a toll must be imposed I think you must first take into consideration how much is already being paid by the drivers on that road. For instance if the road is 21 miles long then the average car burns a gallon of gas on that road meaning he has paid 18.4 cents in federal taxes and probably another 24 cents in state and local taxes. When determining the toll this 42 cents needs to be subtracted and once the cost of construction has been completely amortized then the toll should just reflect the cost of maintenance. I seriously doubt it works this way and people that drive on toll roads are subsidizing the other roads and kicking in to the general fund.
  • tpetpe Posts: 2,342
    California's gas taxes are among the 10 highest in the country and they don't go entirely to road maintenance and construction. California is a state that really sees it as a Carbon tax and my understanding is they have no intention of adopting a fee based on miles driven. Good for them.
  • falcononefalconone Posts: 1,726
    Why can't we all agree that everyone who uses the roads pay EQUAL amounts for the privilege. That seems to be the fairest solution. Something easier to implement would be a $0.20 (arbitrary amount) tax per gallon to cover the shortfall they anticipate. High mileage cars should NOT be penalized simply because they consume less. It makes NO sense at all and it will NEVER, EVER happen. As BUSH Sr once said... READ MY LIPS..NO NEW TAXES FOR HIGH MILEAGE VEHICLES.
  • gagricegagrice San DiegoPosts: 31,134
    Officials in car-clogged California are so worried they may be considering a replacement for the gas tax altogether, replacing it with something called "tax by the mile."

    They have been looking at it for a while. If the Oregon project looks like a money maker. CA and many other states will jump on the bandwagon.

    http://www.cbsnews.com/stories/2005/02/14/eveningnews/main674120.shtml
  • snakeweaselsnakeweasel a Certified Edmunds Poster.Posts: 13,458
    Therefore they must be generating as much gas tax revenue as the non-toll road and I find myself wondering how it was decided that this stretch of road requires an additional charge.

    It is my understanding that tollways are self supporting, no tax money is supposed to go to them and the funds are only supposed to stay on the tollway (or in politicians pockets).

    2008 Sebring Ragtop, 2011 Hyundai Sonata.

  • jhinscjhinsc Posts: 399
    Snakeweasal, to be fair, some of your posts were confusing in the wording. I had to re-read one several times to make sure what you were stating was true. What would have been clearer is to state that with 250,000 hybrids costing $700 the US/State treasury dept's for each they drive, the average impact of each hybrid for each mile they drive is really .0028 cents.
  • tpetpe Posts: 2,342
    I was basing my statement on this excerpt from the SF Chronicle.

    "In California, Gov. Arnold Schwarzenegger's administration says the idea of a gas-tax change isn't on his agenda.

    "The bottom line is this is something that's not on the front burner or back burner,'' said H.D. Palmer, state Department of Finance spokesman. California has studied the idea in the past, and the Legislature would have to approve any change to the current system."

    It surprises me that Oregon is seriously considering this approach. I had always considered the entire West Coast to be more environmentally friendly in their thinking. I can pretty much guarantee that most drivers of hybrids or high mpg vehicles are not opposed to paying more in fuel taxes. What they are opposed to is paying more so that the driver of a Hummer can pay less. If the people in low mpg vehicles feel like they are getting screwed then the solution for them seems pretty obvious. It's like the guy whose banging his head against a wall and complaining that it hurts. If the perceived unfairness of the current system results in more people choosing "greener" vehicles, guess what? That does not represent a flaw.
  • larsblarsb Posts: 8,204
    http://toledoblade.com/apps/pbcs.dll/article?AID=/20051202/OPINION02/512020310/-1/OPINION

    "It's a ridiculous notion, not just because of its underlying logic that cars with better gas mileage pay less in gas tax, and therefore should be taxed in some other fashion, but because it would penalize Americans who make an environmentally prudent purchase."
  • tpetpe Posts: 2,342
    I read that article and agree with its message. It said that the Bush administration shot down a 4-5 cent increase in the gas tax. I'm speculating here but I suspect that there was concern about being accused of raising taxes and that would be correct. But if a fee per use system resulted in generating more revenue why wouldn't that also represent an increase in taxes?

    I haven't read all the posts but has anyone provided numbers about what this would cost the driver of a 50 mpg vehicle over what it costs now. Here is my estimate. The average passenger vehicle on the road travels just over 22 miles for every gallon of gas burned. Therefore the government collects, 18.4 cents for every 22 miles driven. Right now a Prius owner is paying 18.4 cents for every 50 miles driven but some people believe that the Prius driver should pay the same as everyone else for highway funding. This would result in a 23 cent per gallon surcharge being applied at the pump. And that is only to maintain the same revenue level that we have today, which apparently isn't enough. BTW, these numbers don't factor in for SUVs and light trucks, which I assume would be taxed differently.

    http://www.bts.gov/publications/national_transportation_statistics/2005/html/table_04_11.h- - - tml
  • rorrrorr Posts: 3,630
    "Why can't we all agree that everyone who uses the roads pay EQUAL amounts for the privilege."

    Well I'm certainly in favor of this....

    "High mileage cars should NOT be penalized simply because they consume less."

    ...but apparently you aren't.

    tpe just posted a nice succinct little analysis:

    The average vehicle mileage is 22 mpg. The Federal gas tax rate is 18.4 cents/gallon. Therefore, the average owner pays 18.4 cents in Federal taxes to drive 22 miles (a road use tax of about 0.84 cents/mile).

    A high mileage car may get 50 mpg. That driver also pays 18.4 cents/gallon in federal taxes (I assume this qualifies as 'equal' to you). But he pays only 18.4 cents to drive 50 miles (a road use tax of about 0.37 cents/mile).

    Though he is paying an 'equal' GAS tax, he is paying LESS THAN HALF the road-use tax of the average owner.

    So, which is it? We should all pay EQUAL amounts for the privilege (everyone who uses the road) OR we should NOT penalize high mileage cars simply because they consume less?

    You can't argue for both.

    I'm going to take a wild guess and assume you still want everyone to pay the exact same gas tax. If that is the case, please stop arguing that we should all pay equal amounts for the privilege of using the roads. Just admit that it is okay for high mileage cars to get a break because their owners are more socially responsible and the gas tax is a good way to punish owners of vehicles with poor economy.
  • gagricegagrice San DiegoPosts: 31,134
    BTW, these numbers don't factor in for SUVs and light trucks, which I assume would be taxed differently.

    I am not sure that has been addressed. I did not see anything in the Oregon pilot project that differentiated between all the light vehicles. After further research I believe the Oregon system is only addressing State mileage tax. I think you would still have to pay the 18.4 cents per gallon. That would be in addition to the 1.25 cents per mile. So a Prius that gets 50 MPG you would be taxed at the pump for 80.9 cents for 50 miles driven. A Camry getting 25 MPG would pay 99.3 cents for 50 miles. A 12.5 MPG Tundra would pay $1.36 for 50 miles driven All three have about the same impact on the highway. Yet the Hybrid would get the best rate. If the Feds decide to get into the mileage tax game it would skew those figures more toward even across the board.
  • rorrrorr Posts: 3,630
    "So a Prius that gets 50 MPG you would be taxed at the pump for 80.9 cents for 50 miles driven. A Camry getting 25 MPG would pay 99.3 cents for 50 miles. A 12.5 MPG Tundra would pay $1.36 for 50 miles driven"

    I like it; sounds good to me.

    I also like the following quote from the college student in the CBSNews piece (who commutes about 2k miles a month and traded in his Beemer for a Prius):

    "It's not fair for people like me who have to commute, and we don't have any choice but take the freeways," says Just. "We shouldn't have to be taxed."

    Translation: I can't help it, somebody else needs to pay for this road I use a lot.
This discussion has been closed.