This was always on the cards, the only surprise to me is that someone has moved on it so fast.
The major problem facing governments over growth of electric cars is loss in tax revenue currently enjoyed from fuel taxes. In most places the amount of fuel tax collected far exceeds that which is spent on road infrastructure. Governments simply take activities with inelastic demand as the best place for collecting revenue. Because fuel was primarily used for transportation, which has a very inelastic curve, it always has been heavily taxed. Same goes for airline travel and smoking. Flying and tobacco taxes all normally bring in far more revenue than they cost the government - because taxes are levied on a basis of extract sufficient feathers from the goose with a minimum of hissing.
The problem with electric cars (as far as revenue collection goes) is that you can plug them in anywhere. But putting extra broad-based taxes on electricity consumption is electoral poison. So how to tax vehicle-destined electricity? If electric cars start to supplant liquid fuels in large numbers, governments are looking at a major revenue source drying up.
Adding a fixed charge seems like a simple but problem-ridden way of solving it, but makes more sense than trying to do things like have specially-taxed outlets for electric cars.
Personally I think a per-mile charge based on vehicle size is the correct way to go (regardless of fuel type or vehicle class). Drive less, pay less. Drive smaller vehicles, pay less. But doing so naturally attracts the ire of those with a problem being tracked. And so on we go. Taxation is imperfect.
My guess is that they are doing this before electric-car ownership becomes a big group. That way a smaller charge can be introduced and normalised before the group gets too large. It's always easier to incrementally creep up a tax rather than introduce a new one.
"In most places the amount of fuel tax collected far exceeds that which is spent on road infrastructure. "
Lol wut no. Were you talking about places other than USA? Because here in the USA, billions of dollars are transferred every year from general funds into the highway administration because the fuel tax is not even close to sufficient for maintenance of highways. This is also true at the state level, but to a much higher ratio.
“Nationwide in 2010, state and local governments raised $37 billion in motor fuel taxes and $12 billion in tolls and non-fuel taxes, but spent $155 billion on highways,” writes the Tax Foundation’s Joseph Henchman. Another $28 billion of that $155 billion comes from revenue from the federal gas tax.
The major problem facing governments over growth of electric cars is loss in tax revenue currently enjoyed from fuel taxes. In most places the amount of fuel tax collected far exceeds that which is spent on road infrastructure. Governments simply take activities with inelastic demand as the best place for collecting revenue. Because fuel was primarily used for transportation, which has a very inelastic curve, it always has been heavily taxed. Same goes for airline travel and smoking. Flying and tobacco taxes all normally bring in far more revenue than they cost the government - because taxes are levied on a basis of extract sufficient feathers from the goose with a minimum of hissing.
The problem with electric cars (as far as revenue collection goes) is that you can plug them in anywhere. But putting extra broad-based taxes on electricity consumption is electoral poison. So how to tax vehicle-destined electricity? If electric cars start to supplant liquid fuels in large numbers, governments are looking at a major revenue source drying up.
Adding a fixed charge seems like a simple but problem-ridden way of solving it, but makes more sense than trying to do things like have specially-taxed outlets for electric cars.
Personally I think a per-mile charge based on vehicle size is the correct way to go (regardless of fuel type or vehicle class). Drive less, pay less. Drive smaller vehicles, pay less. But doing so naturally attracts the ire of those with a problem being tracked. And so on we go. Taxation is imperfect.
My guess is that they are doing this before electric-car ownership becomes a big group. That way a smaller charge can be introduced and normalised before the group gets too large. It's always easier to incrementally creep up a tax rather than introduce a new one.
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