According to the Seattle P-I, Washington State legislators have introduced a bill that would raise taxes on vehicles to help pay for streets and highways.
Now, part of me likes this idea. As it currently stands, cars and trucks don’t pay their own way. The state gas tax doesn’t even cover the cost of building, maintaining, and operating the state’s road network. To break even, the state department of transportation consistently relies on general tax revenues to supplement gas tax receipts. Finding new ways to make drivers pay for the true cost of driving should make the system fairer, and ensure that people who don’t drive much aren’t forced to subsidize those who do.
So in theory, I should like the general idea of raising taxes on vehicles. But the problem is that, in this case, I find the specifics a bit disheartening.
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First off, the bill would create a flat annual "vehicle fee"–essentially a tax for owning a car or truck—of $20. Most of the public costs of vehicles, however, come from driving them, not owning them. Under this scheme people who rarely drive would pay the same rate as people who drive a lot—meaning, essentially, that the more you drive, the more other people subsidize your driving.
Plus, a flat tax of this sort winds up being regressive: it’s irrelevant to the well-off, but an extra burden to the poor. Washington already has one of the nation’s most regressive tax systems, and a flat tax on vehicles just makes matters worse.
Second, the bill proposes a vehicle weight tax—essentially charging more for vehicles that weigh more. The rationale for this is fairly clear: heavier vehicles create more wear and tear on the roads, increasing road maintenance costs. But here, too, what matters is not just how heavy a car is, but also how much it’s driven. If two vehicles weigh the same amount, but one is driven 3 times as much as the other, then the one that’s driven more creates 3 times the damage—but under the bill’s scheme, they’d both pay the same amount of road maintenance tax. Again, people who drive less wind up subsidizing those who drive more.
And there’s yet another problem with the way the bill structures the vehicle-weight tax. Heavy vehicles cause much, much, much more damage than do light vehicles. In fact, [beware: math ahead] a good rule of thumb is that road damage is proportional to the vehicle’s weight per axle, raised to the fourth power. That means that a vehicle that supports two tons per axle creates sixteen times as much damage as one that carries one ton per axle. (Note: the actual damage can vary from the cube of axle weight for the sturdiest highways, to the fifth power of axle weight for poorly constructed roads.) In practice, this means that virtually all of the wear and tear on most roads can be attributed to very large vehicles.
But the tax, as proposed, would charge a flat rate of 1.5 cents per pound. So given two vehicles, with one twice as heavy as the other, the heavier one pays twice the tax—but creates 16 times as much road wear. The overall effect, again, would be unfair: people who own light vehicles, and drive them short distances, would pay a disproportionately large share of the tax relative to their contribution to highway wear and tear.
(There are two other parts of the tax proposal: an increase in the gas tax—which I think is a good idea—and a "street-utility service district" which I would have to think about some more.)
In an ideal world, it seems to me, vehicle taxes would be based on some combination of fuel consumption, miles driven, axle weight, emissions, noise, safety, and congestion considerations. That would do the best job of internalizing the true costs of driving. Taxing vehicle miles—which isn’t even on the table, apparently—is a key to creating a fair tax (as Alan argues here), since to a large extent the impacts of driving accrue on a per-mile basis.
In theory, the vehicle weight tax could be seen as a step in the right direction, since it creates a disincentive—clearly, not enough, but perhaps better than nothing—against heavier vehicles.
The problem, though, is this: once these sorts of things get enshrined in law, they’re very hard to change. It could be decades or longer before you get a chance to revise them. Which means that in this case—as in so many others—we owe it to ourselves to get it right the first time.