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Author Topic: CA EV gas tax proposals  (Read 1086 times)

bluefoxicy

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Re: CA EV gas tax proposals
« Reply #15 on: February 23, 2017, 07:29:25 AM »

Amen. Again, it's not a perfect system, but one way or another we have to pay to maintain the roads, and this seems a lot more equitable to me than doing it out of the general tax fund.

It's easy to get people to go along with something unfair if you can convince them it's fair.

Through several mechanisms, usage taxes push the cost onto the poorest and relieve the richest.  The people who receive the least wealth for their time are made to pay the most.  That's a disproportionate exchange of labor for use.

Let's say you make $27/hr (United States median household income).  You drive 12,000 miles per year at 30mpg and you pay 25 cents per gallon of gas tax.  That's $100/year, 3.7 hours of labor.

If you make $8.25/hr (minimum wage) and drive 12,000 miles at 30mpg, that's 12.1 hours of labor.  That is to say:  for the same driving, you pay 3.4 times as much in terms of working labor cost.

If you're a commercial freight driver, it doesn't actually matter what the gas tax costs; that's an expense, you roll it into your fees, and that moves down into the cost and the eventual price of the product.  Freight costs averaged $1.91 in 2016, with a $0.17 cent per mile fuel cost, and account for roughly 50% of the retail cost of many goods (such as food and clothing).  That means the cost is 8.9% of the freight cost; a 25 cent per gallon fuel tax comes to 0.49%.  The $27/hr guy and the $8.25/hr guy both pay this pretty directly--about 9.1 hours of labor for either.  Compounding effects aren't explored here.

When you get up to people making $100/hr, things change.

The $100/hr guy only drives 20,000 miles, including a fancy sports car that gets 18mpg.  That's $277 or 2.77 hours.  He also invests about 9% of his gross income into his 401(k)--roughly $13,500 post-tax, $18k pre-tax--plus expends a large amount of income on his house and intangible goods like insurances.  Call it 30% in total and he only pays 0.343% of that additional fuel tax on purchased goods and services, 6.86 hours.

So a guy making $27/hr and driving 12,000 miles pays 12.5h for roads; a guy making $8.25/hr and driving 12,000 miles pays 21.2h for roads; and a guy making $100/hr and driving 20,000 miles at 18mpg might pay 9.63h for roads (or as high as 11.9h).

If you can avoid getting super-liberal about it and trying to eat the rich for being rich, you can also point out that richer people are also generally benefiting from income made by shipping those goods out to consumers--those consumers pay that fuel tax involved in the shipping of goods to them, and the revenues generated by the sale of those goods provide the source of income to pay paychecks of engineers, managers, and executives.

Calling this "equitable" is myopic.  It's saying, "Well, you touch it, and we charge you more pennies the longer you touch it."  Turns out you can play with it longer and harder and spend less time under the whip for the privilege than the next guy.

It's also hilariously bad logistics.  The infrastructure costs are going to be largely based on economic activity; a general fund funded by an income tax is going to directly take part of that, and automatically adjusts for it.  Because of the haphazard unevenness of a fuel tax or mileage tax, you'll need to keep adjusting that tax--notably, every bit of economic progress (technical growth) that doesn't make roads easier to build will require raising that tax.  It's going to have to increase faster than inflation.

"Not a perfect system"?  It's one of the worst systems ever designed.  (Sales tax is the worst; a flat-tax general fund would be worse only because of its extreme scope, and it wouldn't be worse than a sales-tax-driven general fund--which would totally destroy the economy in a month.)  Use taxes only make sense when the government is providing a commodity (because then you're buying goods), like water; and even then, minimum usage rates make the most sense in most such systems.

Inequitable, inefficient, and unstable.
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Richard230

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Re: CA EV gas tax proposals
« Reply #16 on: March 31, 2017, 04:24:01 AM »

The road maintenance tax proposal (SB1) has finally surfaced big time with the Governor holding a news conference yesterday to push his tax increase plan to repair roads, bridges and public transportation systems (that should have been properly maintained all along, in my opinion).  Here are the proposed tax increases according to an article in my newspaper today:

$24.4 billion would be raised by increasing gas tax by 12 cents a gallon. (I believe that would increase it to a total of 50 cents a gallon.)

$200 million from an annual $100 "zero emission vehicle fee", beginning in 2020 (?).

$7.3 billion raised by increasing diesel excise tax by 20 cents a gallon.

$3.5 billion by increasing diesel sales tax to 5.75%

$16.3 billion from an annual "transportation improvement fee", based upon the vehicle's value.  This would increase the current registration fee from between $28 to $165, depending upon the value.

$706 million in general fund loan repayments.  (?)
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Richard's motorcycle collection:  2018 16.6 kWh Zero S, 2009 BMW F650GS, 2020 KTM 390 Duke, 2002 Yamaha FZ1 (FZS1000N) and a 1978 Honda Kick 'N Go Senior.

Killroy

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Re: CA EV gas tax proposals
« Reply #17 on: March 31, 2017, 12:03:58 PM »

Amen. Again, it's not a perfect system, but one way or another we have to pay to maintain the roads, and this seems a lot more equitable to me than doing it out of the general tax fund.

It's easy to get people to go along with something unfair if you can convince them it's fair.

Through several mechanisms, usage taxes push the cost onto the poorest and relieve the richest.  The people who receive the least wealth for their time are made to pay the most.  That's a disproportionate exchange of labor for use.

Let's say you make $27/hr (United States median household income).  You drive 12,000 miles per year at 30mpg and you pay 25 cents per gallon of gas tax.  That's $100/year, 3.7 hours of labor.

If you make $8.25/hr (minimum wage) and drive 12,000 miles at 30mpg, that's 12.1 hours of labor.  That is to say:  for the same driving, you pay 3.4 times as much in terms of working labor cost.

If you're a commercial freight driver, it doesn't actually matter what the gas tax costs; that's an expense, you roll it into your fees, and that moves down into the cost and the eventual price of the product.  Freight costs averaged $1.91 in 2016, with a $0.17 cent per mile fuel cost, and account for roughly 50% of the retail cost of many goods (such as food and clothing).  That means the cost is 8.9% of the freight cost; a 25 cent per gallon fuel tax comes to 0.49%.  The $27/hr guy and the $8.25/hr guy both pay this pretty directly--about 9.1 hours of labor for either.  Compounding effects aren't explored here.

When you get up to people making $100/hr, things change.

The $100/hr guy only drives 20,000 miles, including a fancy sports car that gets 18mpg.  That's $277 or 2.77 hours.  He also invests about 9% of his gross income into his 401(k)--roughly $13,500 post-tax, $18k pre-tax--plus expends a large amount of income on his house and intangible goods like insurances.  Call it 30% in total and he only pays 0.343% of that additional fuel tax on purchased goods and services, 6.86 hours.

So a guy making $27/hr and driving 12,000 miles pays 12.5h for roads; a guy making $8.25/hr and driving 12,000 miles pays 21.2h for roads; and a guy making $100/hr and driving 20,000 miles at 18mpg might pay 9.63h for roads (or as high as 11.9h).

If you can avoid getting super-liberal about it and trying to eat the rich for being rich, you can also point out that richer people are also generally benefiting from income made by shipping those goods out to consumers--those consumers pay that fuel tax involved in the shipping of goods to them, and the revenues generated by the sale of those goods provide the source of income to pay paychecks of engineers, managers, and executives.

Calling this "equitable" is myopic.  It's saying, "Well, you touch it, and we charge you more pennies the longer you touch it."  Turns out you can play with it longer and harder and spend less time under the whip for the privilege than the next guy.

It's also hilariously bad logistics.  The infrastructure costs are going to be largely based on economic activity; a general fund funded by an income tax is going to directly take part of that, and automatically adjusts for it.  Because of the haphazard unevenness of a fuel tax or mileage tax, you'll need to keep adjusting that tax--notably, every bit of economic progress (technical growth) that doesn't make roads easier to build will require raising that tax.  It's going to have to increase faster than inflation.

"Not a perfect system"?  It's one of the worst systems ever designed.  (Sales tax is the worst; a flat-tax general fund would be worse only because of its extreme scope, and it wouldn't be worse than a sales-tax-driven general fund--which would totally destroy the economy in a month.)  Use taxes only make sense when the government is providing a commodity (because then you're buying goods), like water; and even then, minimum usage rates make the most sense in most such systems.

Inequitable, inefficient, and unstable.

I'm in favor of the gas tax acting like a user fee.  If the roads are free, then they are bound to be overused (tragedy of commons).

The numbers you run point out how low gas tax is.  Compare that to a normal bills like cell phone bills.

Yet, gas tax only covers 41% of state and local road spending according to the Tax Foundation, so sales, income and property taxes are paying for the majority of the roads.  That means the the white collar worker that rides his bicycle to work could be paying more of the roads than the 100 mile a day super commuter with a lower job. 



https://taxfoundation.org/state-gasoline-tax-rates-2016/
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Doug S

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Re: CA EV gas tax proposals
« Reply #18 on: March 31, 2017, 08:31:36 PM »

If you can avoid getting super-liberal about it and trying to eat the rich for being rich...

I'm really getting tired of everything in this country these days being all about someone's political orientation. We need to stop doing that, and stop doing it now. Everybody needs to get out of whatever echo chamber they're living in and look at things honestly and without injecting politics into every single thing.

Quote
I'm in favor of the gas tax acting like a user fee.

Great, let's do it! Let's set up toll booths on every road, highways and surface streets alike, and have sliding rates depending on number of axles as well as axle loads (since the amount of wear and tear on the road surfaces is almost exclusively determined by axle loading), and everybody can stop every few miles and pay what they owe. Except that would require bazillions of toll booths, hordes of people to man them (or massive expenses on automation), and be a complete and royal pain in the ass. EVERYBODY hates toll booths, with good reason.

So let's not do manual toll collection. Here in San Diego, we have the "EZ Pass" system set up to use the toll lanes on some of the freeways, which is theoretically pretty painless, you just mount your pass in the windshield and it's scanned as you pass under the sensors. It's still a major pain. The scanner fails to register the pass and someone gets fined who shouldn't be, or someone in the next lane over gets scanned when he's not using the toll lane, the scanners don't work right in the rain....it's a fustercluck, but at least it's only for a few miles on a few freeways. Imagine those things set up everywhere you go. Also imagine the expense. It would be years or decades before we'd paid for all the scanners, and by that time the "fuel tax" problem will be completely obsolete.

Fuel taxes seemed like a pretty good solution for a pretty long time. The more you use the roads, the more you pay. Larger vehicles use more fuel as well, so there's at least some increased fee collection for vehicles with higher axle loads. It's also very easy to implement and collect, and hard to dodge. But then someone (okay, I'm going to get a lick in and say it probably WASN'T a liberal) observed that EVs don't pay fuel tax (never mind that we DO pay taxes on our electricity), and therefore "aren't paying their fair share". So how do we correct that? I know, let's give EV owners REDUCED electrical rates with one hand, to reward them for their forward thinking and for pushing ahead a desirable technology, and with the other hand, make them pay an extra charge when they register their vehicle, so they're "paying their fair share". Only a politician (whatever their ideology) could think that makes sense.

You can punch holes in any realistic system that can actually be implemented. Somebody pays too much, somebody pays too little. Short of the bazillion toll booth with sliding fees approach, I don't see a way to make it completely equitable. To MY way of thinking, it's as much about perceptions as it is about paying to maintain the roads. People get angry about rich people driving their Teslas and paying no taxes, and though I don't look at it that way, I understand their anger. Nobody's giving them a tax break for driving their old Ford F150, which is all they can afford to do. I can see the need for a small fee for EV owners to make it at least LOOK like we're not playing favorites. I also believe $100 is too high in the literal sense of making up for the fuel taxes we'd otherwise pay, but if the fee was realistically small, it would be laughed off...a $12 annual fee isn't going to change anybody's perceptions.
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Richard230

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Re: CA EV gas tax proposals
« Reply #19 on: March 31, 2017, 08:33:24 PM »

While I have no objection to paying for road maintenance, however I have at least two complaints about this tax increase proposal. The first is that why should the fee be placed on each vehicle that you own, even if they are not traveling much on public road? I have a friend that collects old motorcycles and currently owns 22 bikes. He would get hit pretty hard paying an additional $100 or so each year just so he can ride them a few miles a month to keep them in running condition. That doesn't seem equitable. Just raising the gas tax higher so that you pay in relation to the number of miles traveled on the roadway seems more fair to me. Plus, the proposal to have a sliding scale so that the more your vehicle costs the more gas tax you pay also doesn't seem quite right. What does the cost of the vehicle have to do with maintaining the roads. (Tesla owners are really going to get hosed under this proposal.) Charging by the weight of the vehicle would seem more logical and that would even take into account "zero emission" vehicles not paying "gas" taxes.

Secondly, California has a reputation and a history of using a large proportion of road maintenance taxes for everything but road maintenance. Much of it tends to get dumped into the general fund to pay for social programs that are dear to the hearts of our legislators. The only time the state thinks about road maintenance is when they are thinking of a new way to raise taxes that the voters will support. Once they get their hands on the money it seems to vaporize somehow. And I am not alone. There is already push-back regarding this proposal from the public (at least the ones that own vehicles) who believes that our government should become more efficient and spend the money that they already collect more wisely.
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ctrlburn

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Re: CA EV gas tax proposals
« Reply #20 on: April 01, 2017, 07:40:59 PM »

I have a friend that collects old motorcycles and currently owns 22 bikes. He would get hit pretty hard paying an additional $100 or so each year just so he can ride them a few miles a month to keep them in running condition.

Wisconsin has a non-expiring "Collector Plate"  All motor vehicles 20 years or older that the body has not been altered from the original. Costs 2x an annual but never expires. You must have a second fully licensed vehicle, and they are not valid in January. So in Wisconsin 1st Motorcycle collector plate is $123 and second and subsequent is $23.  Your friends fleet of 21 would be $583 and never renew.  Antiques (pre-1945) are only $5.

Don't be frightened but 20 years ago is only 1997.  (I was wierded out just least year when I found my '79 Harley qualified)

It may be a while before Zeros earn "Collector" status... Lectra is a lock already.

===========================================================

Wisconsin the first 1,000 gallons of BioDiesel self produced for self use is road tax exempt. (provided none is sold)

Through 2016 there was a $1.00/gallon biodiesel tax credit for the person SELLING the fuel, which by memory math is $0.30 free and clear.

===========================================================

It was not legislatively uncomfortable at account for Collectors not driving more than one at a time, or for people producing their own fuel.

The dozens of other fuel tax and road tax exemptions that have been palatable and on the books for ages merit reconsideration before ZERO EMISSIONS is burdened.

=====================================================

Norway has highest EV ownship.
https://en.wikipedia.org/wiki/Plug-in_electric_vehicles_in_Norway
Among the existing government incentives, all-electric cars and vans are exempt in Norway from all non-recurring vehicle fees, including purchase taxes, and 25% VAT on purchase

Yes there is some pushback and ongoing reconsideration, but let Norway stand as a benchmark for reversing incentives... once the US is the leader in EV ownership then reconsider aggressive incentives... and not before.
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M@2015DS

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Re: CA EV gas tax proposals
« Reply #21 on: April 07, 2017, 10:21:23 AM »

I only have 3 words to sum up this bs from Brown and the legislature in Sacramento.

Bullet Train Debacle.
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Richard230

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Re: CA EV gas tax proposals
« Reply #22 on: April 07, 2017, 08:11:45 PM »

The bill was approved last night by the state legislature and will be signed into law by the Governor today. This includes the $100 yearly increase in EV licensing fees. The fee increases are permanent and will be adjusted for inflation in the future.

However, in order to get the tax approved in the senate, one republican legislator from the central valley was promised that $500,000,000 from the gas tax money will be spent in his legislative district.  It was also mentioned that a San Francisco Senator managed to get the Bay Area public transit portion of the funds tripled over what had originally been proposed. Also, the trucking industry was "paid off" with a provision that would delay the implementation of truck smog controls for many years into the future.

I am concerned about how much of this tax increase will actually end up fixing our roads, as a lot of "pork" seemed to be stuffed into the package in order to get it passed. No word if the Governor's favorite High Speed Rail (to nowhere) project is going to be able to tap into this money, but I wouldn't be surprised if that was the case.

Any restriction on spending the tax increase only on roads and other projects mentioned in the law would depend upon a state constitutional amendment, which would have to be approved be the voters and that wouldn't occur before 2018.  Plus the state legislators wrote the proposed constitutional amendment language and who knows what that says? Apparently there were a lot of people, including the press, that didn't really know what was in the law, other than what the Governor's press releases said.
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Richard's motorcycle collection:  2018 16.6 kWh Zero S, 2009 BMW F650GS, 2020 KTM 390 Duke, 2002 Yamaha FZ1 (FZS1000N) and a 1978 Honda Kick 'N Go Senior.

Richard230

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Re: CA EV gas tax proposals
« Reply #23 on: April 08, 2017, 04:09:05 AM »

My newspaper today had an article that provided more details regarding the tax increase law and how it managed to get passed. The Republican Senator that swung the deal was Anthony Cannella, of Ceres in the Central Valley. He received a half-billion dollars in SB132. It will be going toward the extension of the Altamont Corridor Express train, which will connect to his town of Ceres and the city of Merced to San Jose. He is also getting a new parkway project between the UC Merced campus and Highway 99.

The legislators also amended a budget trailer bill to give $427 million in transpiration funding to Riverside County, home of two other swing voters: Senator Richard Roth and Assembly-woman Sabrina Cervantes, both Democrats representing Riverside to help secure their votes. More money that will not be going to repair our highways.

The article said that 3/4 of people surveyed by a recent UC Berkeley poll said that they were opposed to higher vehicle license fees, while 63% opposed a gas tax hike. Apparently, our state government representatives could care less what the public wants - as long as they get money to spend on their favorite projects and can have a plaque that will memorialize their names as the "sponsor" of the boondoggle.

I am struck by the concept that almost a billion dollars of our tax dollars is going to buy the votes of three of our legislators so that they can raise our taxes that will then go toward paying for their bribes. There is something wrong about this system.  >:(
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Richard's motorcycle collection:  2018 16.6 kWh Zero S, 2009 BMW F650GS, 2020 KTM 390 Duke, 2002 Yamaha FZ1 (FZS1000N) and a 1978 Honda Kick 'N Go Senior.

clay.leihy

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Re: CA EV gas tax proposals
« Reply #24 on: April 08, 2017, 07:33:33 AM »

I only have 3 words to sum up this bs from Brown and the legislature in Sacramento.

Bullet Train Debacle.
California took the deal after Florida wisely backed out: https://en.m.wikipedia.org/wiki/Florida_High_Speed_Corridor


Sent from my Z981 using Tapatalk

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bikerscooby

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Re: CA EV gas tax proposals
« Reply #25 on: April 22, 2017, 05:08:48 AM »

From the CA SB1 bill text, it looks like ALL vehicles will get hit with a new $25 - $175 additional registration fee called the "Transportation Improvement Fee" starting 1/1/2018, but the EV $100 fee only applies to model year 2020 or later vehicles:
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The bill would provide for the deposit of various funds for the program in the Road Maintenance and Rehabilitation Account, which the bill would create in the State Transportation Fund, including revenues attributable to a $0.12 per gallon increase in the motor vehicle fuel (gasoline) tax imposed by the bill with an inflation adjustment, as provided, 50% of a $0.20 per gallon increase in the diesel excise tax, with an inflation adjustment, as provided, a portion of a new transportation improvement fee imposed under the Vehicle License Fee Law with a varying fee between $25 and $175 based on vehicle value and with an inflation adjustment, as provided, and a new $100 annual vehicle registration fee applicable only to zero-emission vehicles model year 2020 and later, with an inflation adjustment, as provided. The bill would provide that the fuel excise tax increases take effect on November 1, 2017, the transportation improvement fee takes effect on January 1, 2018, and the zero-emission vehicle registration fee takes effect on July 1, 2020.
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Richard230

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Re: CA EV gas tax proposals
« Reply #26 on: April 22, 2017, 06:39:38 AM »

From the CA SB1 bill text, it looks like ALL vehicles will get hit with a new $25 - $175 additional registration fee called the "Transportation Improvement Fee" starting 1/1/2018, but the EV $100 fee only applies to model year 2020 or later vehicles:
--------
The bill would provide for the deposit of various funds for the program in the Road Maintenance and Rehabilitation Account, which the bill would create in the State Transportation Fund, including revenues attributable to a $0.12 per gallon increase in the motor vehicle fuel (gasoline) tax imposed by the bill with an inflation adjustment, as provided, 50% of a $0.20 per gallon increase in the diesel excise tax, with an inflation adjustment, as provided, a portion of a new transportation improvement fee imposed under the Vehicle License Fee Law with a varying fee between $25 and $175 based on vehicle value and with an inflation adjustment, as provided, and a new $100 annual vehicle registration fee applicable only to zero-emission vehicles model year 2020 and later, with an inflation adjustment, as provided. The bill would provide that the fuel excise tax increases take effect on November 1, 2017, the transportation improvement fee takes effect on January 1, 2018, and the zero-emission vehicle registration fee takes effect on July 1, 2020.

That certainly wasn't made clear in the newspaper articles that I have read.  Even today, a short article mentioned that the EV fee would take effect in 2020.  But not one time has there been any mention that it applies to electric vehicles purchased on July 1, 2020.  However that sounds like good news to me, assuming that the powers-that-be actually read that section of the law.   ::)  I still plan to purchase a 2018 Zero next year and if the EV fee will not take effect for vehicles sold prior to 2020 then that will save me some nice coin each year - although I will still get stung by the general increase in vehicle license fees.   :(

Thanks bikerscooby for the information and clarification.  I am feeling better already.  :)
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Richard's motorcycle collection:  2018 16.6 kWh Zero S, 2009 BMW F650GS, 2020 KTM 390 Duke, 2002 Yamaha FZ1 (FZS1000N) and a 1978 Honda Kick 'N Go Senior.
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