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Soon, Cars in Denmark Will Only Be Taxed at 100% (2017)

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Re: Soon, Cars in Denmark Will Only Be Taxed at 100% (2017)

#41

Post by Tehnix »

charlesdm wrote: post #8

Now, I don't live in Denmark, but am I the only one here who wouldn't like (excessive) tax policies like that? A 180% tax (now to be lowered a bit) on a vehicle seems madly excessive. It's like a ban, without actually having the guts to call it a ban. I'm assuming most normal people are unable to afford a car then. I'm not a car nut (don't even really like cars, though I do own one and don't use it often) but wouldn'…

>I'm assuming most normal people are unable to afford a car then

They can actually. A new "normal" car would probably range between 60,000-150,000 DKK ($9,600-$24,000), but you could easily get an old used car for around 13,000-20,000 DKK ($2,000-$3,200).

Now don't get me wrong, I certainly am not happy with the fact that we have to pay that much extra, but it is not a problem unless you want a really fancy car. For what it is worth, Danish salaries are quite competitive for normally low paying jobs. Take for example flipping burgers at McDonald's full time, would be around $19/hour, around $2,700/month (before tax[0]). Or when I was younger I worked at a gas station night shift for around $3,500/month.

>The same applies to alcohol etc. Let people be free to decide and do what they want to do.

Heh, funny you should bring that one up—Denmark is waaaay more lax with alcohol than the US, and even its neighbour countries, Norway and Sweden.

[0] Tax calculation would go roughly (all in DKK):

- 17,000 (salary) - 5,400 (tax-free) = 11,600 (taxable)

- 11,600 - (11,600 * 0.38 (normal tax)) = 7,192 (after normal tax)

- 7,192 - (7,192 * 0.08 ("work" tax)) = 6,616 (after ~all taxes)

- 6,616 + 5,400 (the tax free) = 12,016 (final payed out salary)

EDIT: As an addendum I should probably add that the public transportation system works really well in Denmark, and if you live in the city, you don't need a car, you'd either go by train/metro/bus or bike.

Re: Soon, Cars in Denmark Will Only Be Taxed at 100% (2017)

#42

Post by deminature »

charlesdm wrote: post #8

Now, I don't live in Denmark, but am I the only one here who wouldn't like (excessive) tax policies like that? A 180% tax (now to be lowered a bit) on a vehicle seems madly excessive. It's like a ban, without actually having the guts to call it a ban. I'm assuming most normal people are unable to afford a car then. I'm not a car nut (don't even really like cars, though I do own one and don't use it often) but wouldn'…

Aside from the question of fairness, it has driven Copenhagen to have more bicycles than cars on the streets, and massive improvements to bicycle-friendliness of streets to accommodate this. It's surely an improvement from a congestion, pollution and population health/fitness standpoint.

Source: https://www.theguardian.com/cities/2016/nov/30/cycling-revol...

Re: Soon, Cars in Denmark Will Only Be Taxed at 100% (2017)

#43

Post by sundvor »

olivermarks wrote: post #28
alkonaut wrote: post #23

Earlier quoted context omitted.

People drive. A lot. It’s just widely accepted that this is what a car costs. The main problem I see with a high tax is that people might circumvent it (illegal imports etc). An interesting effect of these high taxes is that you can very “cheaply” subsidize EVs now. It’s lost revenue so it’s still a cost - but it’s easier to swallow and administer. Just tax them at 10% instead of 100% and a Tesla Model S is immediate…

A side note in the article is the collapse of electric vehicle sales in Norway. '...the current administration had decided to phase out tax breaks on electric cars, citing budget constraints and the desire to level the playing field. That decision was delayed in June amid a dramatic drop in sales of Electrically Chargeable Vehicles (ECVs)'. ECV sales have relied very heavily on subsidy in most of the western world, i…

Collapse of EV sales in Norway? Quick, someone needs to call Tesla about that..

https://electrek.co/2017/12/19/tesla-breaks-new-records-norw...

Re: Soon, Cars in Denmark Will Only Be Taxed at 100% (2017)

#44

Post by ceejayoz »

wycs wrote: post #31
ceejayoz wrote: post #24

Earlier quoted context omitted.

> Singapore and Hong Kong for example, which are otherwise libertarian paradises. Wait, what? https://en.wikipedia.org/wiki/Human_rights_in_Singapore https://www.theguardian.com/world/2016/feb/10/hong-kongs-bus...

Economic freedom is very underrated compared freedom of political expression. There are many ways in which Singaporeans are much more free than we are.

Economic freedom (which I'm presuming means "lower taxes"?) isn't much use to you if you're executed for possessing drugs, or indefinitely detained without charge, need a permit to assemble, can't criticize the government, etc.

Re: Soon, Cars in Denmark Will Only Be Taxed at 100% (2017)

#45

Post by ceejayoz »

akgerber wrote: post #40
ceejayoz wrote: post #24

Earlier quoted context omitted.

> Singapore and Hong Kong for example, which are otherwise libertarian paradises. Wait, what? https://en.wikipedia.org/wiki/Human_rights_in_Singapore https://www.theguardian.com/world/2016/feb/10/hong-kongs-bus...

Half of Hong Kong's population lives in public housing, as does 82% of Singapore's population: https://en.wikipedia.org/wiki/Public_housing_in_Hong_Kong https://en.wikipedia.org/wiki/Public_housing_in_Singapore Which probably reflects that people are more willing to be exposed to market fluctuations when their basic necessities are met by the state.

"Basic necessities are met by the state" and "most people live in public housing" are pretty antithetical to libertarianism, aren't they?

Re: Soon, Cars in Denmark Will Only Be Taxed at 100% (2017)

#46

Post by dragonwriter »

andys627 wrote: post #37
seanmcdirmid wrote: post #19

Earlier quoted context omitted.

Many countries are similarly bad, yet still have cars; Singapore and Hong Kong for example, which are otherwise libertarian paradises. They tend to have excellent public transportation, however. There are also still cars in Denmark (no problem seeing them when I visited Aarhus), just not as many as in the states.

The thing is - 100% tax on cars is libertarian. You charge car owners something closer to the costs they cause to society. Compare that to the USA where we heavily subsidize car ownership.

Government intervening in the market to internalize externalities is not libertarian. At least, not by the definitions used by any self-identified libertarians I've encountered.

The libertarian approach is to privatize recovery of social costs so that instead of government internalizing the aggregated social cost into the transaction, each individual who can demonstrate an unlicensed adverse impact from the transaction has a personal cause of action to recover damages resulting therefrom.

A particularly generous libertarian might recognize a class action as an appropriate mass venue for aggregating such claims.

Re: Soon, Cars in Denmark Will Only Be Taxed at 100% (2017)

#47

Post by andys627 »

alkonaut wrote: post #23
charlesdm wrote: post #8

Now, I don't live in Denmark, but am I the only one here who wouldn't like (excessive) tax policies like that? A 180% tax (now to be lowered a bit) on a vehicle seems madly excessive. It's like a ban, without actually having the guts to call it a ban. I'm assuming most normal people are unable to afford a car then. I'm not a car nut (don't even really like cars, though I do own one and don't use it often) but wouldn'…

People drive. A lot. It’s just widely accepted that this is what a car costs. The main problem I see with a high tax is that people might circumvent it (illegal imports etc). An interesting effect of these high taxes is that you can very “cheaply” subsidize EVs now. It’s lost revenue so it’s still a cost - but it’s easier to swallow and administer. Just tax them at 10% instead of 100% and a Tesla Model S is immediate…

> People drive. A lot. It’s just widely accepted that this is what a car costs.

I think this is a key difference between Denmark and USA. Here in USA drivers don't think they're being subsidized. A common argument against transit is that each ticket is subsidized.

There's a highway that just opened in Virginia where they increase the toll to the point where traffic flows at 45MPH. The highest toll on day 2 was $40(!!). This gives you an idea of the value of what is typically given away for free.

Re: Soon, Cars in Denmark Will Only Be Taxed at 100% (2017)

#48

Post by martin_bech »

This is an article from this summer. The negotiations ended at a tax rate of 85% for cars priced up to 185.000 DKK about 30.000USD. And 150% tax for the rest.

There are som deductions for safety ratings, mileage etc. but these are now the current taxrates for cars. Beware before the car tax, the cars are subject to 25% sales tax. So expensive cars are +25% + 150%. (it used to be even worse)

Re: Soon, Cars in Denmark Will Only Be Taxed at 100% (2017)

#49

Post by martinmunk »

mortenjorck wrote: post #10

I was quite surprised to click through and read that this is a decrease and not an increase in the tax rate on cars. Which makes me wonder: What about the Danish political climate enabled the original 180% rate to make it into law?

Had to check up on Wikipedia. It was set to 180% in 1977, with no real reason. I'm pretty sure it was meant as temporary.

But yeah the fact that we have no real lobby apart from dealers and the car owners association. That and the fact that quite a lot of people hate cars. Being from the rural parts of Denmark where cars are a nessesity and moving to the second biggest city in the contry was quite a shock to me.

The 180% tax is not that big a mystery to me any more. I don't talk taxes with many of my old dorm friends as they simply can't see the need to lower it. But that is easy to say when they live within biking distance of everything they need.

I still see them. At least when they need a car for moving.

Re: Soon, Cars in Denmark Will Only Be Taxed at 100% (2017)

#50

Post by ucaetano »

ansgri wrote: post #39

I understand the viewpoint that less cars = better cities. But worse cars? Because this heavily penalizes buying better cars. I understand the need to segment the tax burden by income level, but it seems reasonable to make the maximum tax level so that, e.g. you pay flat €50k in taxes if your car costs more than €50k. You can play even the safety card here: more expensive cars have more advanced automation and safety…

> you pay flat €50k in taxes if your car costs more than €50k.

That would be the same as capping income tax: you pay a 20% rate up to $100k of taxes, after that, no incremental taxes.

It's the opposite of progressive, actually taxing rich people less than poor people.

I'd even go and propose that cars over €50k should be taxed at a higher marginal tax rate than lower-priced cars.

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