Monday, January 4, 2010

Mileage Tax?

So how do you feel about the idea of a Mileage Tax instead of a Gas Tax?

I saw a quick blurb about it on HLN (CNN sister channel) this morning, saying that Texas is investigating the pros and cons of a mileage tax. Here is a story link discussing the reasons (ie: the transportation sector funds will be depleted by 2012). I saw that other states have already had pilot projects and Oregon was specifically mentioned as having a successful trial.

So here is a link to a positive opinion on Oregon's mileage tax trials. Just for comparison sake. Notice the author hopes that gas stations will not exist eventually.

How do you feel about it? I see that over the years, cars are becoming more fuel efficient and of course people are also guilted into buying a fuel-efficient vehicle in order to save the environment, right? We all get told that --- so then what? Your prize is to pay tax on your mileage instead? It's never ending!!

Is this an example of how the system is becoming so bogged down in tax-reliant programs, we are forced to pay out of every orifice and will continue to do so no matter how much we try to be more efficient? In my view, taxes are spread so thinly between the multitudes of socialized/universal programs, it leaves the original reasons for having taxes drowning in debt.

I see property taxes exploding in my area, yet schools getting even less funding dollars every year. I see fuel and now possibly mileage taxes added or increasing at the same time as people are trying to be Good Planetary Citizens and purchasing more fuel-efficient vehicles.

We bought a more fuel efficient car in October. Previously, my partner was driving a 1994 Yukon to and from his workplace that about 15 mins outside our city. We had to gas that beast once a week even though taking good care of it meant it was using less fuel than many similar vehicles. But the car - woot! It's been refreshing to fill it only once every 3 weeks! Here we are doing our part for the environment (supposedly), saving money in fuel costs --- only to find out that maybe one day our region will decide to put in a mileage tax as well. What happens to all of the tax dollars we already pay? Not just through gas but cigarettes, alcohol, income, GST, property, and so on? It's the same in the US but with state tax instead of GST - where does all their money go? Why isn't there enough left for one of the original excuses to take taxes in the first place - road upkeep?

How many more places are going to be adding taxes as we go along? How much money are you going to have left, and how much do you think is a good amount to sacrifice for the Common Good?

In my region, a lot of people have to drive a fair distance to work... it's not exactly a populated area and towns are hours apart instead of minutes like more metropolitan areas, and a lot of employers are 'out of town' such as the soldiers who drive 35 mins to work every morning at the base. It's also freaking cold for 5-6 months of the year and the prospect of walking to the corner store in -30C isn't very appealing, so you jump in your fuel-efficient vehicle (Ha! yeah right - you get in the ones that can actually DRIVE in this mess which means diesel and gas fueled trucks and SUVs). Anyway, is it fair for rural people to be charged a mileage fee when they don't have much choice but to drive longer distances than city-dwellers? Hmmm could this be part of the conspiracy theory I hear from time to time that is trying to drive people into cities instead of small towns?
-------------------------------
eta (since I had to leave to take my daughter to school and couldn't finish this):

How about North America starting a Road Tax system like the UK? Gee that would be fun! I used to live there and found it odd that they had such a high tax on petrol but also had to pay Road Tax every year, after completing an MOT service check. Owning a car there was very pricey! You had to have your tax disc displayed on the windscreen (windshield) and would face fines and big trouble for not doing it. Okay so I looked up the current costs for Road Tax discs and it's even more confusing than it was in the 90s! It's done via engine size for vehicles registered prior to 2001, and via CO2 emissions post March 2001. But looking at the charts, I see that the yearly cost is anywhere from 35 GBP to 405 GBP depending on the vehicle ($56US to $653US according to current xe.com currency conversion).

Then I looked up current petrol tax levels in the UK and found that it was 56.19 pence per litre for regular road fuels as of Sept 1 2009. I looked up the price of petrol in my old town and saw that it's lowest listing is 92.9 pence per litre. So approximately 60% of fuel cost in my old town today is tax.

According to a few online sources, avg Gas Tax in Canada is about 35% of the total cost per litre, and in comparison it's about 20% in the US but that amount can vary and change, and that is based on 2008 info that I found.

So - why is the UK's so much higher, in addition to road tax payable yearly? No wonder so many people I met and worked with over there don't bother to drive. I have several friends there that did not even get their driving license, plus many that did but do not own a car. I used to joke with them that in Alberta we could drive a car until it's muffler fell off in the middle of the road, and maybe the door too - but there they have yearly Road Worthy inspections and you cannot get your new tax disc without providing proof that you had the MOT tests done. Which by the way is an additional 30 to 123 GBP each year, depending on vehicle type ($48US to $198US). Add that to your yearly insurance costs plus car payments - and holy doodle!

And oh my I just found the section for changes taking place in April 2010 to Road Tax which ups the First Year registrations to up to 940 GBP ($1512US). Wow. Speechless.

Is that where we are heading? The more we buy fuel efficient vehicles and the more we cut down our driving to avoid any future mileage taxation - where are they going to get the money for road upkeep? Prediction - the next piggy bank we will be paying into will be a road tax requirement similar to the UK.

4 comments:

  1. This is the catch 22 in all this reduce, reuse, recycle movement. While the idea has great merit, the one entity that does not adhere to this philosophy is government. As a prime example: at one time cigarette taxes were low and since many people smoked the government could count on a certain amount of income. Then the number of people smoking dropped quite dramatically and the government revenues along with it. The government's answer was to raise the tax on the remaining smokers while defending the action by the false claim that this was aimed at further reducing the number of smokers and to discourage young people from acquiring the habit. Horse-hockey! The idea was to maintain the flow of revenue to the government coffers. What this has accomplished is to increase the level of illegal activity in the tobacco market and increase the number of teen smokers. When taxes become onerous people will find a way of avoiding them. I, for one, take advantage of any cheap contraband cigarettes I can get my hands on, and will continue to do so. I've been smoking for 55 years and no social-engineering bureaucrat is going to stop me.

    P.S. I do not recommend the practice to anyone. Smoking is a hazard to most people's health. (I've just been lucky, so far.)It is a costly, smelly, and disgusting habit...and that's its good points.

    ReplyDelete
  2. I mileage tax is great if you're an urbanite who lives in the city. It's not so great if you live in the country though. I suspect this tax is more ideologically than practically driven.

    ReplyDelete
  3. Powell - believe me, I have used the ciggy tax analogy a lot but most people I encounter close their ears to it and say it's okay cos 'smoking is bad for you, and so is second-hand smoke'.

    Why yes it is. But GUESS WHAT?

    So is gasoline, according to many. And if you believe the whole AGW theory, like so many of those who guffaw at my ciggy tax talk do, then you'd know it's actually WORSE than second hand smoke because it's not just people in your near vicinity who are affected - it's every living thing on Planet Earth.

    So, pushing aside the cigarette tax comparisons because 'it's bad for you', doesn't fly anymore does it? Gasoline ain't that great either apparently.

    Next up - higher taxation on various forms of energy like natural gas and coal? Oh wait, that's already in the works with Cap and Trade type plans, what was I thinking? Silly moi!

    Anyway the number of programs we use tax dollars to fund is so high, we cannot keep up. And the 'better' we live our lives (stop smoking, use less fuel, etc) the less taxes will be taken in and those HAVE to be replaced if the programs are all supposed to continue running. How do they propose to do that?

    Why of course, increasing taxes or creating entirely new tax schemes after 'pilot projects' show their successes. Well the UK has been one big long pilot project. Surely because of their 'success' in funding their road projects via gas tax, tax discs and MOT fees, we should just follow suit quickly and efficiently.

    The time WILL come. But I wonder how many people will complain and act surprised, even after supporting AGW etc etc for years on end?

    ReplyDelete
  4. rendensign - yes I talked about how I live in a more rural region where many people have to drive a fair distance to get to work. That's just the way things are around here. We bought a fuel efficient car a few months ago to help ease the $$ burden from our SUV in nicer weather - but if we got hit with a mileage tax instead, it would kind of kick us in the butt for trying to be more Green. (actually we were trying to be LESS green - ie MONEY lol).

    ReplyDelete

*Disclaimer

These are my views and opinions. If you don't agree or think I am sadly misguided, that is your view. Feel free to share your thoughts but I also reserve my right to moderate content (IE foul language, excessive flaming, etc).

Financial Center Live Stock Ticker