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If 'Electric Cars' are the future....Where is the government going to re-coup the vast sums earned in tax from Petrol & Diesel vehicles ?

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  • 4 years ago
    Favorite Answer

    Electric cars don't yet have significant market penetration to pose any threat to government revenue gained through taxing transportation fuel, but this hasn't prevented the subject from being brought up for many years in part as a "reason" not to encourage EV growth. And so this question is often used in a "pro oil" position.

    Sometimes the question is directed at wondering how to pay for roads. Fuel tax was originally marked as a method to "pay for roads." Later it was used as an excuse to "pay for road maintenance." But the reality is that in almost every case the tax is now put in a general fund that also could be used to fund some political pork barrel "bridge to nowhere." So you have sort of asked the right question.

    Commercial and personal vehicles also pay some "taxes" associated with their registrations and these can be expected to continue regardless of the fuel for the vehicle.

    But just as we presently tax fuel used for transportation and virtually the same fuel used for heating is not taxed we would likely want to separate electricity used for transportation and that used for domestic uses. This would be relatively easy at public charging stations. A separate meter could also be required for home charging stations. But we dye fuel that is not taxed as one way to identify cheaters. It is harder to mark electrons so alternative forms of taxing have been suggested.

    One method is to follow the odometer readings of vehicles and tax according to the road usage. While this could be done at the time of registration or inspection of the vehicle, attempting to collect a large tax at once makes it more apparent and is not so politically expedient. Schemes have been proposed to separately track vehicle usage through GPS. Opponents have denounced this as an invasion of privacy as there is no guarantee that the information would only be used for taxes. Many vehicles, like all of our cell phones, already come with a built in GPS so the problem here is again mostly politically admitting that the information is already being collected.

    It would also be possible to put a separate meter in all vehicles, like a taxi meter, that would have to be paid for the vehicle to work. Unlike taxing fuel this also makes the taxing rather obvious. Perhaps the best political solution would be to simply drop the fuel tax and the pretense that it is going directly to making or repairing roads. We would continue to fund repairs from the general revenue while making up the revenue in any other creative way, like perhaps taxing the air we breath or maybe a real tax on being born or dying? Or perhaps, if we somehow can pass something less regressive, a real tax on revenue or capital.

    In the final analysis it comes down to the fact that nobody likes to pay taxes but the wealthy have more power to manipulate government to achieve a lighter burden and shift the load to the masses.

  • Anonymous
    4 years ago

    Tax the electricity supply

  • 4 years ago

    The is one of the big issues that is going around the Department of Transportation. All the ways they can think of violate people`s constitutional rights to privacy.

  • ?
    Lv 7
    4 years ago

    Probably by increasing oil costs. Our present electrical-grid won't support mass-recharging of electric vehicles. Steam-power cars are more efficient.

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  • Anonymous
    4 years ago

    Either through tolls or taxing electricity.

  • yes

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