Last Friday, a new law went into effect that seeks to close a loophole that drivers of electric vehicles have been enjoying: their freedom from per-gallon road taxes in Texas. As of Sept. 1, new electric-vehicle (EV) owners will have to pay a $400 first-time registration fee, and $200 annually to renew their registration. Up to now, EV owners have escaped the twenty-cents-per-gallon state road tax that internal-combustion (IC) vehicle owners pay. But as Teslas, Chevy Volts, and other less popular EVs show up in increasing numbers, the concern was that these drivers were essentially freeloading on the taxes paid by their fellow drivers who were paying for gas. Texas now joins 32 other states which have enacted some form of compensatory tax on EVs.
It's interesting that if you do the math, you can figure out what kind of gas-guzzling car you'd have to be driving in order for the EV tax to be equivalent to what you would actually pay in state gasoline taxes for your old-fashioned IC car. Ignoring for a moment the first-time fee, the Texas gasoline tax rate is 0.20 per gallon. How many gallons do you have to buy per year to pay $200 in state gas taxes? That's easy—1000 gallons. Assuming you drive the fairly typical 12,000 miles a year, that means to pay as much tax as an EV owner does, your vehicle gas mileage would need to be only 12 miles per gallon. That's in the range of gas mileage of one of the most popular vehicles in Texas: the Ford F-150. So while Tesla owners may not appreciate the implied comparison, they'll be paying at least as much road tax as your typical pickup driver does, if not more.
Fairness is always a question when the subject of taxes come up, and depending on your political leanings, what is fair in taxation can look very different to different people. Libertarians, for example, would turn all roads (at least major roads like highways) into turnpikes and make users pay for them per use. This idea used to be on the impractical pie-in-the-sky shelf, but with RFID systems, computerized license-plate cameras, and allied technologies, there is no longer a major technical barrier to widespread implementation of this notion.
The problem with it is that it would be highly unpopular, as well as unprecedented. The first scream we'd hear would be from the trucking companies, whose vehicles bang up the roads a lot more than passenger cars do. Of course, they are already paying a lot more in taxes than ordinary cars do. A 2015 article said that even back then, the trucking industry in the U. S. paid $21.6 billion in state highway use taxes, and almost as much in federal highway taxes. And there's a 12% federal excise tax on new trucks, which can add up to $30,000 to the price. So they are not getting a free ride by any means.
Unmentioned so far in this hypothetical libertarian ideal of paying road taxes per mile is the cost of administrating such a tax. It costs something to gather the data needed: those camera and flash bridges over tollroads, or even more intrusive technology such as checking into a car's computer via the Internet to find where and how far it's driven. We quickly get into privacy concerns there, so perhaps it's just as well that the Texas legislature decided to pass a flat $200 registration fee rather than getting fancy and libertarian about it.
We are so used to large-scale infrastructure systems like the interstate highways being paid for by a combination of federal and state taxes, that we don't stop to consider alternatives that modern technical means could allow us to do. The rather obscure economic and political system called distributism favors smallness over bigness and local control over centralized control. Economist John C. Médaille points out that the current funding system for highways is a subsidy for suburbs and for industries that depend on long-distance trucking (think Walmart and groceries shipped across the country). What should we do instead? Says Médaille, "The freeways should be replaced by toll roads, roads capable of collecting their building, maintenance, operational, and replacement costs." He estimates we could reduce the current national budget for transportation by at least half in this way.
Of course, such a move probably won't happen in isolation, for all the reasons I gave above. It would have to be part of a larger trend toward the de-centralization of society as a whole.
In places such as China, and increasingly in the U. S. as well, technology is being used to extract information and money from large numbers of people and concentrate it in the hands of a few, whether those few are government leaders or business owners and operators.
But as we have seen during the COVID epidemic, technology can also be used to return work to home, to enable small local businesses to establish international markets, and to connect people in the same geographic area together in ways that used to work only when people physically met as they walked to the town grocery store or post office. I will not go so far as to say technology is neutral—it never is, completely—but just because powerful interests are using it for increasing centralization doesn't mean it always has to be that way.
In passing the annual $200 registration fee, Texas sought to redress an imbalance that new technology has caused. As we've seen, the legislation has done a reasonably good job of that. But the larger question of whether power and money, in the form of taxes, should be concentrated or decentralized has been left untouched by this move. It will take something bigger than the popularity of Teslas to start a larger conversation about the role of technology in the centralization of power, and whether we want to sit back and let it continue, or to try reversing it.
Sources: The article "Texas EV Owners Hit With New $200 Registration Fee" appeared on the Forbes website at https://www.forbes.com/wheels/news/ev-registration-fees-texas/. I also consulted articles at https://www.reference.com/world-view/gas-mileage-ford-f-150
and https://www.ccjdigital.com/business/article/14933601/heres-how-much-trucking-paid-in-highway-user-taxes-in-2015. John C. Médaille's Toward a Truly Free Market, from which the above quotation was taken, was published in 2010 by ISI Press.
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