Sin taxes are suffering from a shortage of sinners
economist.com
economist.com
It's not right for my vices to pay for your infrastructure. Tax tobacco to fund cancer research. Tax alcohol to advance treatment of liver disease. Tax porn to fund, I dunno, therapy for people who can't view it in moderation.
On a similar note, I do NOT have a problem with paying for schools even though I don't have kids. It raises property values and that's a benefit to me and everyone in the district. Plus, educating young people benefits society as a whole. I'm not some "don't tax me" guy because taxes are good. They just should be limited and targeted and not levied unfairly against those with bad habits for the benefit / relief of all.
That said, I apologize for quitting drinking. Research into treating cirrhosis of the liver will have to take a moderate hit and that's my fault. /s but only sorta
The general fund money can then be spent on whatever again, say the mayor's sin habit ;)
Yeah it only takes a cliche called: an act of congress
If you've never read the federal budget, it's a great exercise in knowing how the govt operates. I encourage it.
If they say spend $100 on toilet paper. It's assumed it comes from the general fund. If they later decide taxing toilet sales for that $100 is a great idea. Awesome. What happens to that $100 budgeted out of the general fund? Sometimes it gets re-allocated, but sometimes not. It almost never means they are suddenly going to start spending $200 on toilet paper though. To do that, they have to specifically write that into the budget.
Hence, just because you taxed toilets $100 doesn't mean $100 MORE dollars will get applied to toilet paper.
Obviously $100 on TP for the federal government is absurdly low, but that's not the point and I'm too lazy to go figure out the actual costs on toilet paper. I'm sure it's a lot though.
Unfortunately there's a looming issue there: "Hydrocarbons used" stops being a valid proxy for "how much you use the road" as more cars are hybrids or all-electric.
That said, those taxes did have a nice property of being imprecise enough that individual privacy was protected. I often point out to certain folks--the ones who complain that "big gubmint makes me pay for stuff I don't use"--that getting their wish means giving that same government constant and intimate knowledge of their movements and habits.
Somewhere in the middle might be a tax based on periodic odometer readings.
I'd suggest curbside parking should be charged everywhere. Free omnipresent parking is what has hollowed out American cities. Car storage is an awful use of public space.
Here in Texas, I would ordinarily pay about $30/year in road taxes on gasoline driving a 30mpg vehicle 12,000/mi anually.
But I have an EV instead so instead I pay:
$500 in surcharge for the first year of registration and $200 surcharge for every year thereafter.
Oh whoops I misspoke; I actually have 3 EVs so despite being one person, I pay approximately 25x more road tax than the average driver here.
I'm not necessarily complaining about the /amount/ of tax but the simple fact that it is both disproportionately applied and far too low overall. The state should charge based on actual mileage, but since they just eliminated state inspections, good luck with that. Second best alternative is to make it a flat surcharge for all.
But you're not, it's to make up for the revenue TX would get from you via the gas tax. Also EVs are heavier on average therefore do more damage to the road so paying for that too.
The revenue to the state is $0.15/gal towards the highway fund and $0.05/gal towards education. Since the EV surcharge does not fund education, I don't feel it is appropriate to include this portion in the comparison.
So with my actual driving data in mind, here's what I would have paid if my 3 vehicles were 30mpg ICE cars: 70,442 mi / 7 years / 30mpg = 335 gal * $0.15 = $50/year to the Texas highway fund.
Vs my actual paid: $200 (2023) * 3 cars + $200 (2024) * 3 cars = $1200
I therefore concede that my initial estimate was a bit high. I paid 24x more tax than I would have if I didn't own EV's, but this was only 20x more than the average driver due to my driving habits.
Had I not purchased and registered my vehicles before the surcharge took effect, I would have been worse off due to the $500 surcharge on initial registration:
$500 (first year registration) * 3 + $200 * 3 = $2100
Texas looks to have a state tax of 20 cents a gallon, plus a federal tax of 18 cents a gallon. 12000 miles at 30 mpg is 400 gallons. The state portion is thus $80/year, and the combined is $152. Which leaves your argument mostly intact, but off by ~2.5x or ~5x depending on how you count. Or did I mess up the math myself?
Also, it appears the average driven per vehicle per year in Texas is more like 16000 miles (https://www.trustedchoice.com/insurance-articles/wheels-wing...). This would make the $200/year surcharge close to equivalent for the total missing gas taxes (state and federal) for a vehicle that is likely heavier than average.
But if we are going to take it into this territory, we do need to break down those taxes a little bit to make a proper comparison. On the state tax side, 75% of the fee goes to the highway fund, so @400gal the actual road tax portion is $60. The remainder goes to education per the Texas constitution, but the EV surcharge does not fund education, so I do not feel it is fair to include this portion in the comparison.
The federal fuel tax applies to fuel used for electricity generation as well, and is passed to the consumer as a surcharge. I'd argue that EVs are already paying the same federal fuel tax when they are getting their electricity from taxable fuel sources. Even so, it's not the state's job to collect it, and Texas also doesn't pay any of the EV surcharges to the federal government. Because of this, I'd argue that the federal fuel tax is completely out of scope. If the federal government decides this is unbalanced and needs to be corrected, they can change their own tax code.
Finally, don't forget that the first year surcharge is $500. I amortized the total registration fees over 5 years as 500+200x4 = $260/yr.
So at 16k miles @30mpg = 400gal * 0.15/gal = $60 in state road taxes for an ICE car vs $260 for an EV, or stated another way the EV pays the equivalent road tax of driving an ICE car 56,000 miles per year.
The only part of the problem broken is that EV owners are no longer subsidizing the damage done by walmart to a road.
Raising fuel taxes is a win-win for everyone. It makes EVs more attractive and shipping garbage more expensive. It's an effective way to directly impact CO2 emissions.
How does EV trucking solve weight?
It doesn’t, batteries are heavy.
Edit: are batteries not heavy?
I think the theme is people are tired of spending an exorbitant amount of money of transportation fuel.
Another truth is that shipping and transportation are two major CO2 emitters. Climate change is real, and CO2 emissions are the primary driver of it.
So, with that in mind, we have an already existing carbon tax both federally and in most states which directly correlates to CO2 emissions. And, conveniently, it is also directly linked to common needed infrastructure damaged the most by vehicles that use the most fuel. It's the fuel tax.
Now, we could talk policy to handle people tired of spending money on transportation fuel. Perhaps we have a fuel tax break for people earning less than 100k. Perhaps we subsize the purchase of more fuel-efficient vehicles. Perhaps we incentivize the production of small trucks, and we outlaw oversized pickup trucks and SUVs for personal use. All solvable problems that could be tackled with separate policy.
I wish it wasn’t so.
Raising the fuel tax also disincentives personal vehicle ownership.
I feel like the same could be applied to EV registration taxes attempting to make up for gas taxes: I think they should be charged on a scale by per-axle vehicle weight. It might help incentivize smaller cars again.
Use-taxes are just to push from the collective to the average person. Instead of having companies like Amazon fit the bill for all the road damage they produce, from their delivers to their supply chains, they push it others. Rather have those companies pay their fare share and reduce the cost of fuel for the average person.
Politics play a big role in alternative transportation set backs. I would travel more if there were bullet trains between large cities. Don't like driving nor flying nor bus. There is push against alternative transportation by both the car industry and oil industry. Political donations by these help remove the chance of high-speed rail. Even though it would improve national security and service economy.
Fuel taxes all funnel on to the poor the most and the middle-income as well. Who benefits from such infrastructure taxes? The rich. They still have to pay something, but far less than their share of wealth as generated by society as a whole.
https://99percentinvisible.org/club/
Roads definitely have a wide impact on communities, and who pays for them is usually critical.
How does that logic not apply to upkeep of roads and highways? (And I say this as someone who doesn't own a car and is pretty anti-car generally).
Tax bad things (but fairly and proportionately) and spend the money on good things (and again, try to spread the benefits fairly). Money is fungible, earmarks are a pointless waste of time.
The tax on cigarettes is not pegged to the expenditures on COPD and other diseases and etc.
Afaik, all sin taxes go into the general coffers so they can't really be based on externalities. Plus the fuel tax doesn't even pay enough for road repair never mind any externalities (especially considering there's often no sales tax on fuel).
Taxes are just a wealth transfer item that can be used as bartering chip in the collective negotiations we call politics.
One group wants something (doesn't matter what it is) but let's say cannabis legalization. Another group might have no reason to care about that, but since the status quo is illegal, might as well extract some value from the first group. Never give up something for nothing. As such, cannabis taxes are included in all of the legalization bills.
This is the important part: the reasoning comes afterwards. Cannabis will make people unproductive, it will increase car accidents, the whole place will smell like pot, etc. Those are all reasons. There's data in some form to support all of them, but none of them are the real reason, which is that it's just good business to ask for something in return, and take as much as you can get away with.
sadly it looks like most of the current data went behind a pay wall
I know it's a bit of an unfair complaint, but these are the things I start wondering about when we can't even keep our schools open. Where is the money going?
Your local municipality probably has some kind of budget transparency thing that you can look at and by comparing YoY expenditures you should be able to sus out where the money is going and where its coming from. Would be cool to have some kind of queryable dataset for this process tho
There might be lots of weed stores for the same reason antique stores and cigarette shops proliferate - they're cheap to set up.
There is no mechanism, as there is in food, to support farmers or to control consumer prices. There is also no government funded free marijuana program. It seems like it would have analogs, but marijuana is truly a unique market.
It's a big enough new industry that the revenues are non-trivial, but there's a lot of industry and lot of tax revenue out there already. It's not like a bunch of stoners are going to be able to provide the budget for a university system or rail network from a modest tax on their hobby.
I think I'm OK with that? If people were consuming enough cannabis to make a really sizable impact on the budget, the bulk of the effect would probably be not so much a result of increased excise taxes so much as because of plummeting income tax revenues from everyone being too stoned to hold down a job anymore.
In short, hoping for a really noticeable budgetary impact from recreational cannabis legalization is probably a "be careful what you wish for" situation.
Alrighty then. Wow.
With the choice quote:
There are just over four million people in Oregon, and so far this year, farmers have grown 8.8 million pounds of weed. Which means there's nearly a pound of dried, smokable weed for every single person in the state of Oregon. As a result, the sales price for legal marijuana in the last couple of years has plummeted.In Australia a packet of cigarettes now costs $AUD 40.
The Australian government is also banning vapes with tobacco.
There is now a substantial industry of illegal tobacco that has recently appeared.
If you want an example from Australia, try gambling. Moderate taxes, state sanctioned lottery's and horse racing, rampant advertising resulting some of the highest gambling rates in the world along with it's social problems. That said, running out of sinners doesn't look to be a problem for gambling.
A solution would be fairly straightforward in acknowledging BOTH the desire to affect behavior AND the need to fund infrastructure (education, roads) BUT we all know that can't happen the way the sausage is made currently. For example because the general fund largely does NOT fund infrastructure (but funds bureaucrats, govt retirees, debt, etc) and because it's hard to BOTH, say, incentivize electric vehicles AND recognize that their usage must now be taxed also in order to fund ... wait no, not just fund road maintenance but fund everything in general, just like the tax on gas vehicles did.
Pickle, pickle but well deserved? The sausage recipe has become complicated enough that it's hard to make it palatable to anyone. And yet, as things stand, the whole pot largely does need to be funded. That is, the funding model deserves to be changed, but cannot be changed instantly.
On a different angle, some states with old "cigar cultures" have been bringing back recreational smoking inside designated restaurants/bars/smoking clubs. It's a bit of a licensing situation like liquor licenses where only so many are allowed in a neighborhood and neighbors can veto if they are too close to residences. So smoking can get a bit of a hipster resurgence in such places. Such places are not for me, but I welcome them as a regulated market.
Two bird in one stone, state gets money, society is consume less and so pollute less
pity even more them who really believe the government is funded through taxes, not through credit
I disagree with the conclusions, it's not the sin that goes away it's really the opportunities to sin.