Lawmakers have proposed yet another punitive tax on EVs, attempting to balance road budgets solely on the back of the ~2% of vehicles that are responsible for a vanishingly small percentage of road damage.
Meanwhile, gas taxes haven’t gone up since 1993… and some are trying to eliminate them entirely, during a global fuel shortage that EVs are the solution to.
The US is back with another unfair EV tax proposal, and it’s not any smarter than the rest we’ve seen.
The new Surface Transport Reauthorization Bill was announced yesterday by the Transportation and Infrastructure Committee, with the shorthand name “BUILD America 250.” It’s being called a bipartisan compromise, between Sam Graves (R-MO) and Rick Larsen (D-WA), who introduced it.
It’s an omnibus bill intended to deal with the next five years worth of transportation issues in the US, covering federal highway funding, transportation studies, public transportation, railroads and the like.
But, as we’ve become accustomed to here in the one country that seems dedicated to keeping its residents stuck in a dirty past where they are beholden to the most evil industry the planet has ever seen, it attacks clean transportation options while letting expensive, dirty ones get off without paying their fair share.
What the bill does
The bill includes a provision for an annual tax on electric vehicles, set at $130/year for fully electric vehicles and $35/year for plug-in hybrids. Those taxes also get an automatic annual increase of $5/year (thats 14% for the PHEVs and 4% for the BEVs), up to a cap of $150 and $50 each.
The taxes would be collected by states, and if states refuse to collect the tax, the federal government could punish them by withholding transportation funds. This is in contrast to a previous attempt which would have charged $200/year, but had no collection method attached and was dropped because it would have been too complicated to set up a national registration scheme.
The previous tax was also floated by Graves, who received $163,300 in bribes from the oil & gas industry in just the last campaign cycle. So we’re pretty sure this idea came from him, rather than from the other co-sponsor, Larsen – but the latter still put his name on it. The fossil fuel industry started pushing for unfair EV taxes across the US a decade ago.
In addition, the bill cuts funding for clean transportation in several ways – EV charging, freight electrification and electric buses, and cuts programs for disadvantaged communities. So despite raising taxes on EVs, it also reduces funding for them, ensuring America falls further behind on clean transportation, and harming US industry.
Bill overcharges EVs, letting polluters off scot-free
Similar road taxes are already in place in many states, usually far in excess of the amount that gas vehicles pay. Some states even have EVs pay multiple taxes, for both road use and charging, for example in Kentucky and Iowa.
These have been implemented under the guise of “making EVs pay their fair share” for the road damage they do, even though they are almost always not indexed by any measure of road damage like mileage or vehicle weight. Also, virtually all road damage is done by large trucks anyway (an 80,000lb, 50k mi/yr semi truck does over 500,000x more damage than my 2,800lb, <2k mi/yr EV).
In contrast to the punitive tax the new federal bill lays on EVs, it does not do anything to change the federal gas tax, which sits at just 18.4 cents per gallon. That number is easy to remember, because it hasn’t changed since 1993.
This has led to decades of highway underfunding, meaning that gas tax revenue hasn’t been anywhere near the amount required to pay for roads.
(Rep. Rouzer, on the Transportation committee, even bragged about how long it has been since gas taxes were raised, calling the EV tax “the first new stream of revenue for infrastructure in over three decades.”)
On average, each gas car pays about ~$80/year in federal gas tax, which is about half what the final annual tax for EVs would be.
Meanwhile, the EV tax is set with an automatic annual riser – something that could have been added to the gas tax, but strangely wasn’t. I wonder if those oil bribes had anything to do with that.
In total, the new taxes would raise somewhere on the order of ~$700 million per year from the 5.3 million EVs currently on US roads. US public spending on transportation is somewhere around $400 billion per year, making the money raised by these taxes a drop in the bucket.
Oil caused this problem, EVs have to solve it?
What the tax could do, though, is make EVs less attractive to buyers during a current oil crisis that is driving a lot of interest. With a global fuel shortage due to a war that Graves voted to authorize, countries and citizens around the world have been reminded that electric vehicles are the number one route to energy independence.
Reasonable countries are doing everything they can to get off this horrid resource, far too late, and the US is doubling down on it.
Meanwhile, a separate effort exists in US government to suspend the tiny federal gas tax, being pushed by republicans (though Graves himself is wishy-washy on it). The purpose of the effort would be to decrease the popularity hit that republicans are taking as a result of their war of choice which is raising everyone’s costs.
If that effort were to bear fruit, while punitive taxes were added to EVs, then all of a sudden EVs would not just be paying more than their share for highway funding, but be responsible for the entirety of the vehicle-based portion of that revenue.
It already has borne fruit in some states, which have suspended gas taxes right now, with no mention of suspending EV taxes. Other states are in the process of trying to suspend gas taxes, or have proposals in front of them to do so.
But this wouldn’t be the only free ride that gas vehicles get. Gas vehicles already have been given a free ride, for over a century, on your lungs. Because gas vehicles produce an enormous amount of pollution, and that pollution costs you money.
The total subsidy, for all fossil fuels, is estimated by the IMF at $760 billion per year in the US alone. Each gallon of gasoline burned costs over $5 in additional health and environmental costs, costs that aren’t being paid by the producer or consumer of that oil, and rather by everyone in the form of hospital bills, wildfires, hurricane damage and so on (note: hurricane damage from storms made stronger due to climate change ruins roads, another way gas vehicles cause road damage).
So, to recap:
- The plan charges EVs about double what the average gas car pays.
- It happens on top of state EV taxes, which already usually charge EVs more than gas cars pay.
- The EV tax is set to rise annually, when the gas tax hasn’t risen since 1993.
- It would do almost nothing to fix a shortfall in road budgets.
- The tax is not set by mileage or weight, meaning more efficient or lesser-used vehicles are punished even more harshly.
- Large trucks do thousands of times more road damage than EVs.
- Some in Congress want to eliminate gas taxes altogether, and some states already have.
- Polluting vehicles have had a “free ride” on your lungs forever, paying nothing to make up for that damage – which EVs don’t do.
- It also reduces EV funding, making America fall further behind while China surges forward.
- The main advocate of this tax has been given hundreds of thousands of dollars in bribes by the Oil & Gas industry, if you were wondering where these ideas came from.
And yet, you’ll see coverage of this law suggesting that this is an attempt to get EVs to “pay their fair share.” There is, objectively, no fairness here.
This is simply an attempt to avoid charging the group responsible for the vast majority of the damage and to balance an unbalanceable budget by overcharging a tiny minority, because it’s politically expedient to target smaller groups rather than the one responsible for the problem… which also happens to have deep pockets to bribe representatives from.
An actual fair way of taking account for road damage would be to tax vehicles based on mileage and weight, with the smallest and least-driven vehicles getting taxed the least, and the largest and most-driven being taxed the most; and in addition a method to put a price on the ignored pollution costs produced by every vehicle (and yes, EVs should pay that too – they’d just pay much less, because they’re cleaner). Until then, the phrase “fair share” shouldn’t touch the mouths of anyone advocating for this utterly idiotic tax.
If you have any thoughts on this issue, you can contact your congressperson. Especially if they’re on the transportation committee.
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