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Yes Virginia, There is NO Free Lunch

June 5, 2011 by · 2 Comments 

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Electric cars have arrived, and they’ve brought with them a social dilemma. American roads are maintained largely—and quite poorly—through the gas tax, a user fee that owners of electric vehicles (EVs)—with no need to stop at the pump—will avoid.

Juicing up the EV! (Photo credit: inhabitat.com)

If you don’t buy gas, you don’t have to pay the gas tax, right? That’s a big extra bonus for owners of EVs. Unfortunately, they’re also checking out of improving the very highways that they’ll be driving in their rides of the future.

Infrastructurist Eric Jaffe summarizes the issue. The idea has been floated that EV owners should pay a nominal fee—but, not a tax, mind you—to maintain the nation’s battered asphalt. But he goes on to argue that the real problem isn’t with EV owners checking out of their civic duty, but rather with the gas tax itself.

He reminds us that the gas tax has been 18.4 cents per gallon since 1993.

Individual states can add to this figure but the tax’s general failure to keep up with the cost of road maintenance creates situations like the one in Washington, whose drivers pay one of the highest combined (state-federal) gas tax rates in the country, at nearly 56 cents a gallon.

Currently the White House is toying with the idea of a pay-per-mile system, which wouldn’t be as hard to implement as it may sound.

How would the government know how far you drove?

The Congressional Budget Office says that electronic equipment, possibly GPS-based but not necessarily, would record the number of miles you drove, then add up a bill that you’d pay, perhaps at your electric vehicle charging station.

This is NOT going to be popular with EV drivers. Since electric cars are expensive, buying one requires that you make a leap of faith. People worry about battery life, range, charger availability, and a number of other intangibles. It’s delicate right now, and throwing in a previously unknown tax could upset the balance.

Photo credit: watthead.org

Another way of looking at it: After the government gives me a tax break to buy the EV, they tax me for driving it?

The auto companies don’t like the idea of EV taxes either and make the case in a similar way.

Shad Balch of General Motors (which makes the Chevrolet Volt) recently stated: “There will be a time and place when electric vehicles should pay their fair share for road maintenance and those associated costs. But we’re not there yet. Right now, we need to create a market that incentivizes people to buy these cars.”

Paul Scott, vice president of Plug In America (and a Nissan Leaf salesman) says, “We at Plug In America think it’s inappropriate to tax EVs at this early stage of development.”

Scott did add that he favors some kind of “weight/mile” tax down the road, after electric vehicles proliferate.

And people who worry about the long arm of Big Brother won’t be happy, either. As Mark G., a poster on The Car Connection, put it, “Besides the possible privacy issues, it would require an entirely new infrastructure and cost a fortune to put in place. It would end up being technology based, which means that is will be easy to manipulate or cheat. Plus, it will no doubt open up plenty of loopholes to avoid being taxed. I can only guess that they will use this as a scary alternative to justify raising the gas taxes.”

In the end, EV drivers will pay some kind of tax, and they’ll continue to get tax breaks, too.

Photo credit: allwelike.com

Writing at CBS’ BNET, Matt DeBord muses that most EV buyers could easily pay Washington state’s $100 fee, or other such levies applied as part of taking delivery of the car.

“The cost could be rolled into a car’s purchase price, and it would become basically invisible,” he said.

That’s true, but a one-time fee is one thing and an ongoing pay-as-you-drive tax is something else again. With that, you’re going to get a big argument—nearly as big a one as you’d get if you proposed raising the 18.4 cents a gallon road tax.

If you haven’t heard, new taxes are off the American agenda.

Worth Pondering…
Thinking is one thing no one has ever been able to tax.

—Charles Kettering

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Comments

2 Responses to “Yes Virginia, There is NO Free Lunch”
  1. Stephen Liss says:

    Too bad for EV users. You use, you pay. I hate tolling everyone equally less than I hate subsidizing your ride.

  2. Tent Reviews says:

    I hate taxes but the roads need to be maintained and ev owners use the same roads. Its only fair that they help maintain the roads that they use.

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