$1000 to register an electric vehicle ???
 

Just read this in the paper and thought I'd post a link to the article. I hope this doesn't happen.

https://www.chicagotribune.com/busin...509-story.html

Seems a little steep, but probably not if you do the math and figure how much you're currently paying in gas taxes a year
They still have to maintain the roadways, so they will always find a way to get you to chip in. Nobody rides for free (unless you have a PHEV like me)

Crossposted from here:

https://ecomodder.com/forum/showthre...ion-37494.html

So the state gave them $4000 up front and they complain they might have to pay it back over a 4 year period. That's longer than the average owner keeps a car and these cars aren't being bought by the poor. But I suppose a 3 ton car that can do 0-60 in under 4 seconds isn't doing any damage to the roads.

$1000 per year is the equivalent of using 1936 gallons of fuel in a regular car. (1000 EV reg - $149 gas reg) / $0.44 per gallon

Driving 15,000 miles a year you would have to average 7.75 mpg to spend that much in the gas taxes.

So yes, it is WAY out of wack.

Actually a 3 ton car does very little damage to the roads. The vast majority of damage is done by commercial vehicles weighing tens of thousands of pounds. However everyone should pay because everyone takes up space on the roads. EVs should get a free ride.

Oregon and bunch of other states are trialing a fee per mile program. You pay $0.017 per mile. I've been part of the trial for 2 years and it works well.

It's not $1000 more to register an EV, it's $1000 although I do think the regular cars are only $150. And there is also a 6.25% sales tax on gasoline there so at $3/gallon it's another .18. Still it makes the EV about $550/year higher than the average car but they also give you $4000 when you buy it in the first place. So you get 8 years no extra cost and then $550 more per year after.

Electricity tax is not used for road infrastructure, so it should be ignored.

2. they have a 6.25% sales tax AND a straight number gas tax they are proposing to be $.44/gal with this new law.

3. From the article, "For Skarlatos, a self-employed software developer who bought her Tesla using $7,500 in federal incentives and $4,000 in state incentives, the idea of suddenly having to pay a $1,000 registration fee to own an electric vehicle in Illinois is “unfair,” and would have dissuaded her from an environmentally motivated purchase. The $11,500 in incentives, she said, persuaded her to take the plunge."

The general IL 6.25% sales tax doesn’t go to the road fund either. If we are going to ignore one we should ignore both.

States like to complain about lost road fund revenue from electric cars but they also ignore the extra gas taxes they collect for off-road use. All those lawn mowers, generators, pressure washers, boats etc.

Also if States are going to go after EVs then they might as well go after other alternative fuels too. I would bet there are more natural gas and propane powered vehicles on the road today than EVs and they are mostly heavy duty trucks that do the bulk of the road damage. Are we going to surcharge them as well?

Or just maybe we should stop trying to raise taxes indirectly and just tax people directly for using the roads.


Registration fees should cover the cost of processing the registration paperwork- that’s it. If lawmakers want more money they should just be direct about it and raise income or sales taxes instead of nickel and dimeing use with fees unrelated to what the money will be used for.

I used the proposed $0.44 gas tax in my calculation. The 6.25% sales tax goes to the general fund not the road fund.

That was the IL Alternative fuel vehicle and alternative fuel rebate. It was not just limited to EVs; E85, biodiesel, hydrogen, propane, and Natural gas vehicles were also eligible. It was up to $4000 and was suspended indefinitely back in 2016.

It's funny the roads which provide far more benefit to the country at large then any other government funded idea, should be thought to needed to be paid for by the users. The roads are like the military, they benefit everyone almost equally. Even if you didn't have a car, or ride a bus, or even walk on a sidewalk, you still benefit from the roads. It is how almost everything moves. Besides that, the fact we have such a free and open road system open to all has done more for individual freedom in this country than all the wars and military ever even thought of doing. You may not have or need a car now, but that inexpensive system in place means at any point you can buy/rent/borrow transportation and change your location at any point, any day, any hour, to where you want to be. Nobody else needs to be involved. It's the classic american story, a vast country filled with so much diversity. If roads need to pay for themselves, then I say the same goes for education, Nasa, FEMA, EPA, USDA, Medicare, science, housing, etc. should all have to be self funding. I actually work for the one government service that is and almost always has been self funded. Not to mention was the early driving force behind the government funding and betterment of the roads in the first place. Good old US Postal Service. Laugh if you want but at least we are actually in the Constitution as an official role of the federal government, and one that has tied the union of states together for over 200 years. https://theweek.com/articles/787585/...postal-service

It's only $114/year here with vanity plates.

***

Electricity tax is used for road maintenance in IL, given that most of the funding for local and state projects (~85%) comes from the general fund. (I looked that up after some moron accused me of not paying taxes for the roads while riding my bike one day).

I can't remember the site where I read about this first, but my comment there was at about 44 cents per gallon, I'm contributing about $196 per year. And I know I drive considerably more miles than the average American, so even though I get better fuel economy than the average American I'm probably paying about the same in road use taxes vis-a-vis fuel tax.

Hammering EV users with $800 more on top of that is punitive, and I can't even determine what tge heck the bill's author is punishing! He's a Democrat, aren't Dems supposed to be in favor of EVs? Actually, thinking about it there are aspects of EVs that are especially attractive to each political party.

Another commenter on that site had what felt like the obvious answer: certify your odo every year and be taxed solely on the nunber of miles you drive. That's the fairest answer I can think of.

@JSH......I had heard they were trying it in Oregon. I posted some questions in the other section but I'll ask them again here. Not to argue but I am very curious.

How do they collect from out of state folks who drive "for free"

Do companies (UPS, Greyhound, OTR trucking, etc) get charged a different rate than private citizens? I'm pretty sure they do more damage.

And for JSH and elhigh.....how do you track how many miles were driven in state? Certifying an odometer doesn't account for miles driven out of state. Like my parents that go to Tuscon every year for 4 months. They drive down and back. Should they be taxed by Illinois for those miles?

Like I said in the other thread. Too many questions and no real answers. Nothing more than a knee-jerk reaction by politicians.

Fwiw: they don't charge out of state. Large transport companies are usually registered in whatever the home state is. Federal law requires state access on federal funded roads.
Local transport gets to pay. In Nv, they counted all the miles driven, part of the reason it was defeated.

The article says they want to increase car rates as well by $50. $50 x 4.5 million registered cars in IL, $225,000,000 more state income.

You made a very good point here. You missed the part about how if you buy anything from anywhere there's a 99% chance the item got there on a truck traveling interstate, and the 1% are dependent on components that travel by trucks on interstate, and on and on.

Simply put: if you don't live in a secluded cabin in the woods, and grow food from your own harvest heirloom seeds, and eating squirrels: you depend on truck traffic.

And if you do those things, you'll probably get Randy Weavered.

This is how the system works.

There are 3 private companies that collect the data (all currently do truck data analytics) All of them measure fuel consumption and miles driven based on OBDII data. They credit back the fuel tax paid at the pump and then debit per mile driven. This gets settled up every month.

Option 1: You plug a dongle into your OBDII port. It only records fuel used and miles driven. You are charged for every mile driven regardless of where

Option 2: You plug a dongle into your OBDII port. It records fuel used, miles driven, and location. You are only billed for miles driven in participation states on public roads. You are not charged for miles driven off road or in other states. The added information is also sold as an added feature as it is basically some of the same functions as On-Star and other similar services. You can see the vehicle location and put user limits for teenagers where you get reports on their driving.

Option 3: Only works on cars with Verizon's version of OnStar. Does the same thing as option 2 but without a dongle needed.


So how do they collect from out-of-state drivers?
They still pay fuel taxes at the pump. The same question case can be made for the current system. I can drive across a state today, use their roads, but never pay for them because I filled up out-of-state.

What about trucks?
Currently this system is only for private vehicles. However it would be even easier to do with trucks as all of them are required to have electronic logs books today that collect all the same information.

What about miles driven out-of-state?
If you use option 2 or 3 you are not billed for miles out of state. Right now California, Oregon, and Washington have fee-per-mile trials. Washington and Oregon are linked so when I cross state lines the rate per mile changes and the money goes the the respective state. California is not integrated yet but will be at a later date. This is a 14 state projected called RUC West.

Oregon is the farthest along.

California, Colorado, Hawaii, Washington, and Utah are doing trials

Arizona, Idaho, Montana, Nevada, New Mexico, North Dakota, Oklahoma and Texas are researching the idea.

I fully expect California, Oregon, and Washington to roll out an integrated system. I expect it will expand to others.

I think we need to charge a fee on all vehicles, that is based on vehicle weight x miles driven.

We subsidize gasoline / diesel at a much higher rate than we do electric cars. If we didn't need to protect sources of oil, we would be able to cut military spending to a small fraction of what we are paying now. And the savings could be used to build roads and bridges, and many other important infrastructure systems.

I think North Dakota's died in legislature, and since session is over now it won't be looked at again until January of 2021 at the soonest. It's not a big issue up here, somehow despite one of the harshest climates in the US, and a lot of pass-through truck traffic in ratio to local traffic that pay taxes to keep up the roads, we consistently are ranked as having some of the best roads in the union. This is largely because the taxes that are supposed to maintain our roads actually do, without getting pulled for other pet projects.

We also have some of the lowest gas tax and registration costs, and I seriously doubt anywhere else has cheaper tickets for moving violations.

Just tax everything once, when you spend money regardless of what it's for. Electricity, gasoline, diesel, or car. All other taxes go away.

One state sales tax and one federal sales tax. Fair Tax

https://fairtax.org/about/how-fairta...SAAEgLuefD_BwE

Which is why funding infrastructure with the general fund is equitable; the guy living in the woods alone still gets to dodge income and sales tax if they're truly off-grid and self-sustaining.

That's not a true statement. The EV subsidy rate is much greater than gasoline.

Fossil fuels may receive more overall subsidy, but that's because it represents 98% of transportation energy.

As I've said, subsidy is usually the wrong way to influence a market. The proper way is to set specific measurable goals on the bad thing you're trying to limit, and then tax that thing until that goal is achieved. Everything else is corrupt politics.

Especially if you're technically adept enough to disconnect whatever it is that monitors the mileage you've driven :-)

That is a recipe for a very regressive tax plan where the poor pay a much larger percentage of their income in taxes. The more money a household makes the lower the percentage of income that is spent on typical consumer goods that are subject to sales tax.

That is unless you are going to tax EVERY good and service including stocks, bonds, houses, credit default swaps, etc.

It is also a recipe for large swings in tax revenue because consumer spending drops like a rock during recessions - just when you want the government to ramp up spending.

Read my description of how it works. Unplugging the OBDII dongle just means you would default back to the fuel tax collected at the pump.

Of course that would also defeat the purpose of taking part in the trial. I'm actually paying tiny bit more for the two vehicles enrolled in the program. For April the mileage fee came to $1.99 more than what was collected in gasoline taxes.

I'm aware of it, thought it sounded like a good idea, bought the book and then realized the math doesn't work. It is a national sales tax combined with a universal basic income.

The biggest slight of hand is saying the sales tax would be 23%. That is the tax-inclusive rate which is not how sales tax is done in the USA. We collect sales tax using tax-exclusive prices (Cost of item + X% tax) The tax-exclusive rate in the FairTax is 30%. That sounds a lot worse and kills any chance of it passing. It is purposefully misleading.

Fairtax then use a lot of suspect math to say 30% is enough to raise the same amount as all the other Federal taxes today. Other people fact checking it put the rate at up to 39% assuming no tax evasion and up to 50% with it.

It is also deeply regressive. The "prebate", which is the supporters name for a universal yearly income of $2707 per adult and $957 per child is meant to make it sound less regressive. It doesn't because that money is given to everyone regardless of income. Of course the big kicker is that the things that low income people spend most of their money on like food, healthcare, rent and transportation are all taxed while things that the wealthy spend their money on like stocks, bonds and real estate are not taxed.

Calculations vary a bit but the basic result is that under the FairTax people that make less than $25K a year come out the same, people that make $25K to $200K a year pay more in taxes, and people over $200K pay less than what they do today. Of course that is the intent of the proposal.

My solution to make the tax progressive is to not tax staple food items (prepared pizza excluded), the first $700/mo in rent/mortgage, the first $400/mo in health insurance, etc.

The wealthy would end up paying more since there would be no tax deductions.

The poor would pay nearly nothing unless they are idiots that eat at fast food, buy booze and cigarettes, or think they have a right to live in Manhattan.

EIC type distributions can still be made for certain cases; disability, etc. This is a function of local government though, not federal government. The feds responsibility is to make sure other countries aren't invading us, set certain environmental standards, and make sure there aren't any slave-owning states, and that's about it.

We've allowed the federal government way too much power and we're paying for it in lost liberty and lost money.

A federal sales tax could easily fund everything that should fall under federal responsibility. Local government is responsible for the rest, because those problems are local.

No, they won’t. Not unless you apply a sales tax to investments. The wealthy don’t spend their whole income like lower income people. They invest much of it. They also spend a lot more of their money outside of the USA.

Last year my wife and I paid 22% in total taxes, invested 51%, and lived on 27%. We are comfortable within the top 10% of households but nowhere near the top 1%.

If the wealthy are investing, then it benefits everyone because investments are what build everything. When they finally do spend the money they've invested, it will be taxed. Most wealth doesn't survive more than 1 generation of descendants; evidence that it gets spent.

The sales tax would need to apply to all sales including foreign transactions. I don't know how to accomplish this, but I'm sure there's ways.

Probably the government should develop an official (traceable) distributed ledger currency that all transactions must be made in. People could still trade in gold and other valuable goods, but it at least makes laundering money more difficult.

This assumes the money is invested in the USA and spent in the USA. 80% of the global economy is outside of the USA.

There is no way that you can collect US sales tax on money that I'm spending in another country. The US just gave up trying to collect income taxes earned abroad and that is way easier than trying to collect sales tax.

The FairTax is a pipedream. Even the supporters basically admit that as they say it would require the repeal of the 16th Amendment.

I'm not familiar with FairTax, only my own thoughts on the matter.

Perhaps income tax will always be the better solution, but it at least needs to drop the thousands of special interest exemptions. A deduction for missing an eyeball? :rolleyes:

The only reason I suggest a federal sales tax is that it seems to be successful at the state level, considering most have it. If only 5 states favor an income tax over a sales tax, why would sales tax be preferred given the disadvantages you mention?

On the Federal level I think we should:

1. Eliminate Income tax deductions, rebates, and credits. All of them
2. Tax all income the same.
3. Drop corporate income taxes because in the end the customer pays them. Corporate earnings should be taxed when it is distributed to investors or if companies try to take the money outside of the USA.
4. Add a Federal sales tax.

The vast majority of states have a combination of sales, property and income tax. Only 5 states do not have a general sales tax and only 7 do not have an income tax. That is pretty balanced.

That all sounds pretty good to me.

Because it sounds fair while still being regressive. Murricans eat that up.

I don't really see a connection between progressive and "fair".

If anything "fair" would fall between the continuum of progressive and regressive. At the extremes, a progressive plan would have the wealthiest paying all taxes, with the poorest paying nothing, or even getting money back. Regressive would be opposite, with the poorest paying all the taxes, and the wealthiest paying nothing.

Somewhere between those extremes "fair" would be found.

Progressive = the more you make the greater the percentage of your income you pay in taxes.
Regressive = the more you make the lower the percentage of your income you pay in taxes.

The USA we tend to have more of a bell curve. It starts off with negative tax rates, steadily increases, and then tax rates start tapering off. That is how we end up with Warren Buffett paying a 17% tax rate while his staff pays 36%

The taper isn't automatic, but a function of the corrupt tax laws. A person must carefully invest to avoid the taxes. Our tax rates as listed are progressive throughout the rate structure. It's only things like $7,500 tax credits to buy a new car that end up making things regressive.

1. Change the law so that the IRS can release its own tax software. If it is not as good as TurboTax and H&R Block it won't be a threat.
2. Have the IRS send out yearly statements saying how much taxpayers owe or are owed and people are free to use TurboTax, H&R Block, Arthur Everest, or Crazy Uncle Larry to audit the IRS.
3. Keep track of how much tax specific tax codes are used each year. This particular code applied to exactly zero people in 2020? Make it easy to get rid of them.
4. ????
5. Profit? :)

Oh yeah:
6. Mandate that all transactions be rounded to the nearest nickel.