Taxing the purchase of a car seems non-sensical to me. It is not, so much, the ownership that is the problem, but the use of the car that creates congestion and health issues.
Tax fuel and bring in road pricing.
Tax fuel and bring in road pricing.
- Polution created by making a car.
- Cost of parking, especially in cities:
- parking takes up space, making it harder to walk between things
- street parking is untidy / ugly
- street parking obstructs traffic, bike lanes and bus lanes
- the need for large parking lots drives up the cost of building, which is passed on to drivers and non-drivers alike
No different from making any other object - you might as well tax e.g. TVs if that's the rationale.
> - Cost of parking, especially in cities:
Agreed, but better solved by disallowing street parking and taxing land ownership. Again, tax the parts that introduce the negative externalities as directly as possible, otherwise you create perverse incentives.
Danish streets do seem to be much clearer, even in areas that have similar road conditions and population density to UK cities.
I think we need to be more radical and apply zones across the whole of the city and apply restrictions 24/7. Discounts for a zone would apply if resident, no off road parking, and city car (no diesel/small).
Commuters would only be allowed permits if city car. Nottingham also brought in Workplace parking permits.
Cities have the infrastructure in place (good public transport combined with park and ride) to encourage people to leave their cars at the edge of cities. Residents within cities should not be driving to work within the city. Neither should parents be dropping kids off by car.
Naturally there are always people that need cars. Even Copenhagen cannot get below 9% car usage despite 62% of people cycling.
And yet, the tax is not specifically on the pollution. You could argue that this might be difficult to do in practice, but in any case such a pollution tax ought to also apply to other products like computers and TV's, which it doesn't.
The problem with a flat tax, is that it doesn't discourage anything other than buying a nice car. In general, an expensive car is not worse for the environment (including parking etc), than a cheap car. A large, bulky car might be that, but that's not what we're taxing here.
E.g. if the purchase of cars isn't taxed I'll just import €10,000 of audio equipment by buying an old beater, then ripping out and selling the sound system and selling the car for scrap, while making a big profit because I'll be competing with local sellers that have to pay import tax on sound systems.
http://blog.caranddriver.com/feds-watching-fords-run-around-...
However I'd challenge that this is a market failure - this is an example of the failure of a rules-based approach to regulation.
In countries which take a principles-based approach to regulation then the substance of the transation is considered as well as the form.
So this kind of nit-picking to circumnavigate the rules wouldn't have been allowed.
Considering the substance of the transaction isn't a viable strategy, it might be possible at larger scales as in your Ford example, but individuals can and will find clever ways around tariffs that are impossible for the authorities to keep up with.
As an example, I lived in a European country where import tolls on bicycles were much higher than the import fees on spare parts, so if the price of shipping was low enough you could simply ask the seller to send over a bike in multiple packages marked as spare parts to evade the import fees.
How are you going to detect cases like that with perfect accuracy? You'd need some massive tracking system to figure out who bought what, and even then it could be trivially evaded by me and a friend buying 1/2 of two bikes each as spare parts and combining them after they've been imported.
You think nobody tried to undervalue taxed imports yet? Probably a fraud as old as mercantilism.
Nobody's trying to undervalue the car as costing €1,000 with a €10,000 stereo, that would be fraud.
The point is that by introducing differences in what sort of taxes you have to pay for certain products you trivially open yourself up to legal tax evasion in the form of simply bundling higher cost items as part of products in lower tax categories.
Perhaps a better example: Let's say you have a 200% tax on cylindrical metal tubes, but a 10% tax on bicycles. A lot of people would now legally import bicycle frames, cut them apart, and evade the import fees without the authorities being able to do anything about it. There's nothing illegal about buying a bicycle frame, and there's nothing illegal about cutting apart your bicycle and re-using it for parts.
I think OP did not mean "put 0 tax on cars" but rather remove the extra 100% tax on cars, so it's just taxed like any other product - i.e. just the same as tax on audio equipment. Then it would not matter.
1. https://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/...
The justification, on the surface, has changed nowadays. My point was, though, that the relatively wide spread acceptance of this sort of tax is not because everybody is so environmentally conscious; it's because it's a function of the cultural instinct to 'punish' those who flaunt wealth. Or if you don't want to call it 'punishment', at least to make those who want to drive luxury cars pay more on top of the taxes they need to pay that also apply to other goods (i.e., VAT). I mean, if those taxes were to make those driving cars pay for the building of roads and to counter emissions, you'd charge a flat fee, or a per-kilometer fee. You wouldn't tax them proportional to the list price of the car. A 250k Lamborghini doesn't wear out roads more than a Kia, but it costs several times the purchase price of the Kia just in taxes.
So my remark was that, despite today's bend of environmentalism, these taxes need to be seen in the context of the broader societal mores of egalitarianism; or 'suppression of those that show wealth in socially not accepted ways', depending on how you want to spin it.
There are other tolls & fees for owning a car in The Netherlands. I don't own a car, but from what I've read taken as a whole the tax policy here has nothing to do with "luxury", you're free to buy a million Euro gold-plated scooter.
It's meant to discourage excessively heavy vehicles and those who pollute more. Any sort of a flat fee that doesn't take into account the weight / size of the vehicle doesn't account for the disproportional cost to infrastructure incurred by larger & more polluting vehicles.
1. https://nl.wikipedia.org/wiki/Belasting_van_personenauto%27s...
Sure, and if you keep yourself warm at night by burning e50 bills, you won't be taxed extra, either. My point is not (or only partially) about the current tax, or how it's justified. My point is that the societal context in which these taxes were instated are a key point to understanding why things are the way they are. And the pertinent part of that context is Calvinistic austerity, which is ingrained in Dutch collective psyche. I know that there is significant cognitive dissonance among a large part of the Dutch population when someone claims that religion has shaped their world view in some way, especially among those that consider themselves 'atheistic liberals', but it's silly to deny it - there are tomes and tomes written about this in social science literature. I mean fuck - my wife gets almost angry when I claim that her world view is shaped in part by the society she grew up in, and therefore by religion, as much of Dutch society is influenced by Christianity one way or another. But objectively speaking, how can this point be denied?
Anyway, when the BPM was reformed a decade ago, the objective was to keep it 'fiscally neutral', meaning that the amount levied in total needed to stay (roughly) the same as it was before. So current rates are a direct consequence of the way it used to be. In Belgian law (where a similar thing happened in 2012 or 2013 I think) it's even more explicit; there a (what I think is a) regression formula is part of the law that determined the new calculation for the 'road tax' as it is called there. Tweaking the parameters in that formula until projected revenue matched historical revenue was essentially how those rates were determined. In such a case, how can one claim that it's really about environmental concerns? Of course the direction (towards 'polluter pays') is there; but again, my main point (but I'll agree that I'm probably burying it between all the tangents...) is that the real answer to the GP is: to understand the why of these taxes, you have to understand the society it operates in.
It's really interesting to know about the history behind something like an obscure tax, and how something like the EP directive to tax carbon emissions gets implemented as adjusting an existing tax with its own historical baggage at a level where it's exactly matching the revenue, but now ostensibly for a different purpose.
Unless the law changes though the tax will de-facto be phased out in the coming years/decades as zero-carbon vehicles get adopted, I wonder if that's something the people who made the change back in 2007/2010 explicitly had in mind or if it's an unintended emergent phenomena. It'll be interesting to see if the tax is allowed to go away or if there'll be another reform to tax luxury vehicles or something like that.
That accounts for fossil fuel cars but not electric ones.
> bring in road pricing
A fine idea except it's logistically difficult to implement tolls everywhere.
"Danish" is an adjective or a cake.
No idea how to solve that for electric vehicles. Presumably still at the point of charging.
Fuel duty revenue in the UK is £28billion. That's a big hole to fill.
I suspect that eventually you will be able to charge your electric car only from an approved charger that bills you a higher-rate car tariff, just like you can only use fuel sold at a petrol station in your car.
As for the telematics - excuse me saying so, but the UK government can fuck off with suggesting even more surveillance, it's hard to fight off insurers installing telematics boxes as it is already.
But right now as it stands currently, telematics boxes are nothing else but a greedy attempt to get more cash out of drivers - they collect proprietary data, ran through secret algorithms, to secretly decide whether your insurance should go up or not. Try getting a letter from your insurer telling you that your insurance will go up due to your "driving style" and then ask if they can explain what they mean by that. They can't. "the computer said so" is an absolutely fantastic excuse for these companies to make more money and I'm extremely cynical about it, even if we ignore the entire surveillance aspect for a second. The whole idea needs a lot more regulation/openness to be acceptable.
To the wealthy it won't matter much if you tax the purchase of the car or the kilometers driven. Those making below the average salary are normally excluded from living in the center of the cities, and is in some cases even forced outside the bus routes. Also Danish public transit is notoriously bad outside the four largest cities.
So is there a use for car taxes at all? We could always just tax the rich directly, if we don't care about tying the tax amount to road usage.
This has an advantage in enabling provision of a device at country borders etc.
Another option is to develop a cheap Automatic Number Plate Camera and create a network of cameras across our road systems.
Both approaches not only allow road pricing strategies, but also address speeding.
This may be a bit big brother for some but this is pretty much the way I see us heading.
The future is going to be dreadful isn't it.
Except that if you look at it from a little higher vantage point than driver seat, it seems obvious that it's those people who are stupid.
It's literally highway robbery :|
The actual cost like 90% of the price is taxes if I remember correctly.
So taxes for electric cars "Fuel" have already been accounted for.
Edit: grammar is hard
Fresh numbers from todays elpris.dk - øre = Danish cents (yes, they are called ears).
Cost of production: 26,05 øre/kWh Transmission: 35,19 øre/kWh Taxes: 105,40 øre/kWh VAT (25,00 pct.) 41,66 øre/kWh
In total: 208,31 øre/kWh
https://www.euractiv.com/section/road-charging/news/fifteen-...