Friday, November 25

Someone wants to tax hybrids, because...

From the Associated Press, regarding proposals to make up for funding deficits in the highway bill:
Proposals for the longer term could be more controversial. One is that owners of hybrids and other alternative fuel vehicles pay a vehicle fee, the argument being that drivers should bear their fair share to fill the potholes and fix the bridges, regardless of how much or what kind of fuel they use.

Good plan. Let's discourage the sort of vehicles which don't rely as heavily on the oil companies and their record profits as the other vehicles.


Opinionated Chick said...

I sort of understand the logic because state governments get money for road repair from a tax on gasoline and if fewer people are buying gasoline, that's less money for roads. But, instead of discouraging people from buying hybrids by taxing them, government should explore other funding sources for road repairs. I don't have any particular solutions to offer this morning, but it does seem counterproductive to more far-reaching goals to create a disincentive for purchasing hybrids and alternative fuel vehicles.

Peter Schledorn said...

Well, it would be a lot better simply to increase the gas tax--that would increase the incentive to use a high-mileage hybrid (or any other high-mileage car) with no additional bureaucracy needed. Of course, a simple tax increase in this day is a hard sell, no matter how much fiscal sense it makes.

In any event, a tax on hybrids will be counterproductive because before too long every car manufactured will have at least some hybrid features, such as idle stop and a more powerful electrical system. And since not all hybrids are high-mileage cars any more, sad to say, the whole justification falls down.

Opinionated Chick said...

Simply increasing the gas tax is an imperfect solution. I supported an increase in my state because it was necessary, but it isn't a viable long-term solution.

Eventually, an increasing gas tax coupled with a rising base price for gasoline may force some people to convert from low gas mileage vehicles, such as SUVs, to hybrids, especially as more models become available on the market, but what about the people who can't afford a new car? I work a rewarding job that I mostly love and that lets me do some good in the world, but it will probably never pay me enough to afford both a payment on a new car and my student loan payments. Should I be penalized for choosing not to become a corporate lawyer (which I also could have done)? What about people who never had that choice, who will always work minimum wage jobs and can barely afford a car at all?

I agree we need incentives for people to purchase hybrids, but those incentives could come in another form, such as allowing owners of hybrids to deduct the interest on their car loans on their income tax returns.

The gas tax also is an imperfect long-term solution to pay for road repairs for two reasons. First, revenue will diminish over time as the people who can afford it switch to hybrid vehicles. Second, it puts an inequitable burden on those who cannot afford to either buy a hybrid or give up their gasoline-powered vehicles to pay for road repairs. Yes, we must reduce our dependence on oil, but I believe economic justice has to be a factor in the equation.