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Electric Cars – fuel duty and road tax: how to replace £35B annual revenue

carwow.co.uk

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Re: Electric Cars – fuel duty and road tax: how to replace £35B annual revenue

#81

Post by lol768 »

belorn wrote: post #21
matsemann wrote: post #2

There is no "road tax" in the UK, is it? It's a fee for polluting, not using the road. I hate that it's being used as an argument against cyclists: "get off the road, you don't pay road tax". This of course also ignores that most adult cyclists also own a car.. Norway have the same issues now. Almost all new cars are electric. You don't pay purchase tax / vat when buying it. Pay less on toll roads. Cheaper to use. Et…

bicycle and pedestrians could be exempted from a road tax based on fairly simple assumption: the wear and tear is minimal compared to a car. It wouldn't even surprise me if the wear and tear is so small that it can't even be measured. But I could be wrong. It would be interesting to hear if heavy bike/pedestrian roads have higher road maintenance than those that are used lightly. My guess would be that the major wear…

> bicycle and pedestrians could be exempted from a road tax based on fairly simple assumption: the wear and tear is minimal compared to a car. It wouldn't even surprise me if the wear and tear is so small that it can't even be measured.

Isn't car wear and tear minimal to HGV wear and tear?

Re: Electric Cars – fuel duty and road tax: how to replace £35B annual revenue

#82

Post by unglaublich »

tigerlily wrote: post #15
causi wrote: post #5

Tax vehicles based on actual wear to the road surface and add it to the annual tag renewal. Of course, that would stop us from conveniently ignoring the fact that the vast majority of road wear comes from semi-trucks and other heavy vehicles.

I hear road wear scales with the fourth power of vehicle mass.

That's why a bike lane, being a fraction of a highway's thickness, doesn't need maintenance for decades.

Re: Electric Cars – fuel duty and road tax: how to replace £35B annual revenue

#83

Post by leoedin »

bhawks wrote: post #77
leoedin wrote: post #46

The "per unit of energy" pricing of liquid fuels is quite appealing as it encourages efficiency. Even when people are using electric cars, efficiency is beneficial. I wonder if some sort of banded electricity pricing would work - you can consume x kWh at a lower price, and then a surplus tax applies. It's fairly easy to tax public charging. That would still encourage people to seek efficient EVs.

You could achieve basically the same result by reading the odometer and giving discounts or premiums based on the make/model of the car. No need to measure/tier electricity usage.

That doesn't reward economical driving though. EVs have a very low efficiency penalty for high performance - an EV can be both highly efficient at 55mph and have 400 HP and 3s 0-60 times.

Re: Electric Cars – fuel duty and road tax: how to replace £35B annual revenue

#84

Post by unglaublich »

mab122 wrote: post #48

Why not just tax the tires? Seems like they are good indicator on how much you are using roads and how many miles you drove etc. (Safety maybe an argument. Don't do it so people don't drive on shitty old ones)

Nice idea. Add a wear indicator and some DRM to it, and a modern service-based industry is born.

Re: Electric Cars – fuel duty and road tax: how to replace £35B annual revenue

#85

Post by cogman10 »

lol768 wrote: post #81
belorn wrote: post #21

Earlier quoted context omitted.

bicycle and pedestrians could be exempted from a road tax based on fairly simple assumption: the wear and tear is minimal compared to a car. It wouldn't even surprise me if the wear and tear is so small that it can't even be measured. But I could be wrong. It would be interesting to hear if heavy bike/pedestrian roads have higher road maintenance than those that are used lightly. My guess would be that the major wear…

> bicycle and pedestrians could be exempted from a road tax based on fairly simple assumption: the wear and tear is minimal compared to a car. It wouldn't even surprise me if the wear and tear is so small that it can't even be measured. Isn't car wear and tear minimal to HGV wear and tear?

Yup.

Though cars still put out a fair bit more pollution from tire wear than bicycles do.

Re: Electric Cars – fuel duty and road tax: how to replace £35B annual revenue

#86

Post by semanticist »

gpmcadam wrote: post #6
matsemann wrote: post #2

There is no "road tax" in the UK, is it? It's a fee for polluting, not using the road. I hate that it's being used as an argument against cyclists: "get off the road, you don't pay road tax". This of course also ignores that most adult cyclists also own a car.. Norway have the same issues now. Almost all new cars are electric. You don't pay purchase tax / vat when buying it. Pay less on toll roads. Cheaper to use. Et…

It's a combination. Revenues gathered via road tax have a provision for older/more polluting cars so you pay less the newer your vehicle, essentially. Some of the money is used to fund the maintenance of highways, though. Local roads are funded by council tax, so this probably dispells the anti-cycling argument because presumably the cyclists do pay council tax (unless they're on motorways which is another issue.)

> Some of the money is used to fund the maintenance of highways, though.

Only in the sense that some of all tax money is used in that way - VED just gets pooled with all tax income, none of it is 'ring fenced' for any specific purpose. That's why the idea of 'road tax' is so annoying, since it implies it's to be used for a specific purpose.

Re: Electric Cars – fuel duty and road tax: how to replace £35B annual revenue

#87

Post by neilwilson »

Oh dear. Somebody didn't pass the geometric sequence question on their GSCE maths paper.

The £35B revenue replaces itself, because money doesn't stop at its first use.

What you don't spend on fuel duty, you spend on something else, which is subject to VAT, causes wages to be paid subject to PAYE, and profits to be earned subject to corporation tax. They then spend their increased income cause more tax to be raised and so on.

In other words the taxation just moves elsewhere in the spending/income chain. And that's because total tax take is a function of government spending and the desire of the non government sector to save or spend. The more the non-government saves the lower the tax take is as a percentage of government spending - pretty much regardless of tax rates.

Tax rates really just alter the distribution, and not so much the total.

The purpose of sin taxes is to discourage people from doing one thing and start doing another. There is no 'revenue', firstly because you can't rely on it and secondly because a sovereign government has no need of revenue in the first place. That's not the purpose of taxes!

Ideally sin taxes should be matched with virtue subsidies, so that people who are hard of accounting can see what is happening. For example a fuel duty should be hypothecated to an electric car subsidy and they then wane in lockstep with each other as the behaviour changes.

Re: Electric Cars – fuel duty and road tax: how to replace £35B annual revenue

#88

Post by gorgoiler »

53p (+20% VAT) per litre for a car that uses 7.5 litres per 100km is about £48/1000km.

The average UK mileage has dropped a lot over the years and is now just below 7000 miles a year. An odometer duty for that would be about £200, or £17 a month.

If HMRC bring in £35bn a year in fuel duty a year for 45m drivers (the number of people with active driving licenses) that’s more like £700 a head. Why the threefold difference?

Re: Electric Cars – fuel duty and road tax: how to replace £35B annual revenue

#89

Post by matsemann »

redeeman wrote: post #71
matsemann wrote: post #2

There is no "road tax" in the UK, is it? It's a fee for polluting, not using the road. I hate that it's being used as an argument against cyclists: "get off the road, you don't pay road tax". This of course also ignores that most adult cyclists also own a car.. Norway have the same issues now. Almost all new cars are electric. You don't pay purchase tax / vat when buying it. Pay less on toll roads. Cheaper to use. Et…

so perhaps its also time for the government to admit that the prior taxes didnt have ANYTHING to do with environment, but just a way to justify money grabbing to spend on their own worthy causes?

No, it's the opposite. You don't want people to drive because of the environment, health, noise, road "accidents" killing people, how it destroys cities etc. So the taxes are a direct incentive to find alternative modes of travel.

Re: Electric Cars – fuel duty and road tax: how to replace £35B annual revenue

#90

Post by iso1631 »

IndrekR wrote: post #78

For the road wear — tax the tires proportional to the tire weight. But that most likely would mean few-fold increase in the tire cost and may impair road safety. Easier to add an annual fee proportional to the square of fully loaded vehicle mass. Would be about £1k/yr on average. Less for smaller cars, more for larger ones.

You should make it proportional to the miles driven. Someone who does 1,000 miles a year causes far less wear than someone doing 30,000 miles a year

That's the crazy thing about vehicle excise duty, if you do 1,500 miles a year you might use 300 litres of petrol (about £150 tax), but you could be paying another £160 in VED, making the total tax 20p per mile

Meanwhile someone doing 30,000 miles at the same mpg will be paying about 10p per mile

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