Soon, Cars in Denmark Will Only Be Taxed at 100% (2017)

They're not excessive - they're more in line with true cost of car dependent society. In the US we shower subsidies on car owners. Some examples: using general fund money to build highways, charging low gas taxes that don't cover cost of maintenance of roads, providing free/underpriced parking in every downtown in the US, undercharging for pollution and other negative externalities of driving, requiring minimum amounts of parking in new developments (instead of capping parking quantity or letting developer choose how much to provide), qualifying infrastructure using car centric metrics like Level-of-Service, federal gov't providing automatic 10-to-1 match for highway projects but 1-to-1 (in good cases) for transit projects to name a few

Aside from the question of fairness, it has driven Copenhagen to have more bicycles than cars on the streets, and massive improvements to bicycle-friendliness of streets to accommodate this. It's surely an improvement from a congestion, pollution and population health/fitness standpoint.

Source: https://www.theguardian.com/cities/2016/nov/30/cycling-revol...

>I'm assuming most normal people are unable to afford a car then

They can actually. A new "normal" car would probably range between 60,000-150,000 DKK ($9,600-$24,000), but you could easily get an old used car for around 13,000-20,000 DKK ($2,000-$3,200).

Now don't get me wrong, I certainly am not happy with the fact that we have to pay that much extra, but it is not a problem unless you want a really fancy car. For what it is worth, Danish salaries are quite competitive for normally low paying jobs. Take for example flipping burgers at McDonald's full time, would be around $19/hour, around $2,700/month (before tax[0]). Or when I was younger I worked at a gas station night shift for around $3,500/month.

>The same applies to alcohol etc. Let people be free to decide and do what they want to do.

Heh, funny you should bring that one up—Denmark is waaaay more lax with alcohol than the US, and even its neighbour countries, Norway and Sweden.

[0] Tax calculation would go roughly (all in DKK):

- 17,000 (salary) - 5,400 (tax-free) = 11,600 (taxable)

- 11,600 - (11,600 * 0.38 (normal tax)) = 7,192 (after normal tax)

- 7,192 - (7,192 * 0.08 ("work" tax)) = 6,616 (after ~all taxes)

- 6,616 + 5,400 (the tax free) = 12,016 (final payed out salary)

EDIT: As an addendum I should probably add that the public transportation system works really well in Denmark, and if you live in the city, you don't need a car, you'd either go by train/metro/bus or bike.

If 180% is excessive, then Singapore begs to disagree: https://www.youtube.com/watch?v=Ki51vh6ihJs

Anyway, I don't think it's a ban. There are literally cars in Singapore :) If you think a regular sedan is worth >$100k (it's normal in Singapore), you can buy it. But make sure you pay for the externalities (traffic, pollution, parking, road-building, ...) that is caused by your choice.

Dane here. Most people can adford a car if they want one. Normalt you get a loan and pay a monthly rate over the lifetime of the car. Most people who don’t need a car however would rather save the money and use public transport or bike around. I bought a car at the inflated prices, an I wouldn’t want them lowered. I do however feel that the lower fees for electric vehicles was a good thing.

Personally I'm sad to see this lowered as I think it set up good incentives.

High taxation in general, plus high car taxation, means that taxes will be allocated towards alternative transportation options. In Denmark this has meant bicycle infrastructure and culture which has been shown to make humans both happier and healthier. Not to mention that older cars means a lighter touch on the earth (heavy metals, fuel, etc).

Taxation is a good way to apply pressure, and I think we often overlook the power that high taxation has for good policy. Instead we get lower taxation and 'let the market decide' which often results in a more wealth inequality and worse pollution among other things.

I am a car nut, and I'm happy to live in the US where I can afford fun cars that I would not be able to afford in other places.

However, I also see quite a bit of logic in this. It increases not just the COST of a car, but the value as well. Now your car doesn't depreciate as fast, which makes repairs seem more reasonable. The resale value is higher. People buy more used cars, repair them, and keep them on the road. In the end, the "cost" of just throwing a car on the scrap heap (okay, dismantling and scavanging for parts/melting down metal, etc) is much higher.

There are really some great consequences to this.

It's not really a ban, although it does price out some from the market. Practically anyone who has a steady job could still afford a car (edit: even a new one I mean), although many choose not to, because it's not worth it for them.

Those who buy cars essentially buy cheaper cars for the same prices compared to the neighbouring countries with similar income levels.

Yes, I wouldn't one a tax policy like that, either. Where I live, we still have a car excise tax, although somewhat more reasonable, and I oppose to that too: taxing safety features for instance makes people buy less safe cars on average. In any case, road users pay their fair share in fuel taxes (which are high practically everywhere in Europe), not to mention the recurring car owner's tax. (Some car-opposing people from the U.S. tend not to understand how much taxes car owners pay in Europe, but it really covers all the externalities of providing service for cars, and then some; it's a cash cow for the tax man. Of course, you need to collect taxes somewhere...)

I obviously don't know where you live, but it sounds crazy to people in the US because in most of the US public transportation an bicycle infrastructure is not where it needs to be to make them viable for daily life. In places where public transportation is better (like say NYC), car ownership is the exception rather than the rule.

The reality is cars have a massive public cost that we all subsidize via various taxes and paying higher prices for goods already. Keeping up roads, traffic signals, parking structures, etc. is very expensive. Higher taxes on vehicles (and/or gas) helps put the cost directly where it belongs.

Obviously instantly going to 100% tax on vehicles in most of the US would be a complete disaster right now because of the above lack of public transportation, etc. but it's not a crazy idea if you give people alternate means to get around and structure your cities so that 1 hour (or longer) commutes via car are not the norm.

You aren't considering the context, such as infrastructure costs, environmental costs, etc.

See Chesterton's fence: https://en.wikipedia.org/wiki/G._K._Chesterton#Chesterton's_...

Normal people are definitely able to afford a car. Maybe not a car as nice as if they lived elsewhere, though.

The number of cars per capita may be the lowest in Western Europe but it is not so far from the UK figures, for example: http://ec.europa.eu/eurostat/statistics-explained/index.php/...

I don't really see a problem with using taxation as a mechanism to encourage behavior while still allowing a market for it. Alcohol has a lot of negative impacts for society, so making it a luxury is probably a net good. I think the arguments around cars are a little more nuanced, but if a country decides it wants to encourage public transit & walkability, that seems like a fine goal.

Many countries are similarly bad, yet still have cars; Singapore and Hong Kong for example, which are otherwise libertarian paradises. They tend to have excellent public transportation, however.

There are also still cars in Denmark (no problem seeing them when I visited Aarhus), just not as many as in the states.

People drive. A lot. It’s just widely accepted that this is what a car costs.

The main problem I see with a high tax is that people might circumvent it (illegal imports etc).

An interesting effect of these high taxes is that you can very “cheaply” subsidize EVs now. It’s lost revenue so it’s still a cost - but it’s easier to swallow and administer.

Just tax them at 10% instead of 100% and a Tesla Model S is immediately competitive with all the boring ICE vehicles. Look at how Tesla is the most sold car in Norway.

People can still drive, though. Are you against taxes in general?

People tend to buy cars with loans or with monthly payments

I used to live in Northern Denmark and I have experienced their healthcare first hand and witnessed social welfare which helped my friends and colleagues. And I still do think this is excessive tax not well justified for the following reasons:

1. I would expect a state of the art public transport in the whole country. The rail system connecting different cities in Denmark is pretty dated and slow. Even using diesel engines in some parts. Now I would expect some part of that 180% tax to be invested here. But the fact is people are often forced to drive with car due to poor public transport connectivity in many places.

2. Even electric cars are not exempt from these high taxes anymore. This eliminates the benefit of the doubt that this was for the good of the environment.

3. The high tax for cars has historical roots. Many in Denmark believe it is no longer necessary today to fund the welfare state. https://www.thelocal.dk/20151120/whats-the-deal-with-denmark...

4. These high taxes are also defeating the purpose of keeping the environment clean by creating a huge market for used really old cars which are often the worst polluters. https://mereconomics.com/2016/02/09/on-the-efficiency-of-dan...

5. Opinion: It all boils down to having free health care, free education, really good welfare system and not being able to afford a car. Other European countries like Germany seem to have worked out a model which can make all of them affordable to most people.

I can go on but got bored.

Once you pay that tax at purchase, is there also annual registration fees?

A few of the American states I've lived in have charged annual taxes based on a car's worth (decreasing over time). I hope you don't get nailed every year!

> you pay flat €50k in taxes if your car costs more than €50k.

That would be the same as capping income tax: you pay a 20% rate up to $100k of taxes, after that, no incremental taxes.

It's the opposite of progressive, actually taxing rich people less than poor people.

I'd even go and propose that cars over €50k should be taxed at a higher marginal tax rate than lower-priced cars.

> more expensive cars have more advenced automation and safety features, so their use should be encouraged

That would indeed be the long term play, but as most democratically elected governments, they have a 4 year window in which they don't want to be known as "The guys that cut away a ton of welfare, so people could get cheaper cars", since the immediate effect would be a loss of money. Unless of course, people started buying more new cars, but that is speculative, and a gamble that not many of the bigger parties seem willing to make :(

Well, compare to the UK. Here we have low taxes on cars and are often incentivised to purchase new ones. This supports car manufacturing, which is a very significant industry for the UK, employing more than 800,000 people. New cars (dieselgate aside) are generally better for the environment too.

But aside from occasional temporary scrapage schemes, there isn't really much incentive to get rid of old ones. This not only results in congested roads but also towns and city streets that are cluttered with parked and often rarely-used vehicles occupying every available space and greatly reducing the "public realm" that could be used for other, healthier and more productive purposes.

So while Denmark's high taxes on new vehicles may not produce the best outcomes for the quality of the vehicle fleet, it does seem to have been effective at reducing the total number of vehicles.

Perhaps, like in Japan, annual registration fees/taxes should start increasing after the vehicle is a certain number of years old, making it expensive to retain ownership of old vehicles.

The tax rate of cars in China is similar, and it results in fewer cars, and more people taking public transit. Note: this is also because there is very advanced public transit that can handle high throughput, and only the super-wealthy buy cars, in part to show off.

I like cars and make quite a decent salary, and I still drive a 17 year old Peugeot with 330k miles simply because I am not willing to pay the tax on the kind of car I actually want.

Had to check up on Wikipedia. It was set to 180% in 1977, with no real reason. I'm pretty sure it was meant as temporary.

But yeah the fact that we have no real lobby apart from dealers and the car owners association. That and the fact that quite a lot of people hate cars. Being from the rural parts of Denmark where cars are a nessesity and moving to the second biggest city in the contry was quite a shock to me.

The 180% tax is not that big a mystery to me any more. I don't talk taxes with many of my old dorm friends as they simply can't see the need to lower it. But that is easy to say when they live within biking distance of everything they need.

I still see them. At least when they need a car for moving.

The fact that Denmark does not have a car industry has played an important role.

As someone from a neighboring country to Denmark, this to me is a sign that their system is working.

If you are using a car once a month, shouldn't it be far cheaper, even without taxes, to just rent one?

This is the other way around, they are lowering the tax from 180% to 100%.

So I'm sure if there is an automakers lobby, they approve of this.

psst, the tax is being lowered from 180% to 100%

I think you have this backwards. They are lowering the tax from 180% to 100%.

The article is about lowering the tax not raising it...

It might not have an insane backlash once public transit is a viable option in more than 5% of the US. Not going to happen any time soon by the looks of it, though.

This assumption shows how insane the taxes are

make cars cheaper without any good reason? after all they are decreasing the taxes

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