Electric Vehicle Owners Pay Tax in Texas

 

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.

What Really Happened With Internet Privacy?

Anyone paying attention to U. S. headlines recently heard something about internet privacy.  But what you heard probably depends on where you heard it.  President Trump signed a bill on Monday, Apr. 3 that used a thing called the Congressional Review Act to reverse a pending FCC rule.  So whatever it was, the rule that was revoked hadn't even gone into effect yet.

If it hadn't been shot down, the FCC's proposed rule would have required internet service providers (ISPs) such as AT&T to request permission from their customers to use certain data about what the customers do online.  Right now, ISPs don't have to ask, but depending on the ISP, they may not be doing much with that data anyway.  The big users of customer-generated data are social-media outlets such as Facebook, Internet companies such as Google, and advertisers who pay these outfits to place targeted ads using harvested customer data.  I'm sure the ISPs would like to get into that business eventually, but the FCC rule would have blocked them.  President Trump and the Republican-dominated Congress simply removed that stumbling block.

So for one thing, nobody lost any internet privacy they previously had.  As to the hypothetical future, it's anybody's guess what the FCC rule might have done, but clearly the ISPs were not happy about it, which was how the rule got quashed by a corporate-friendly Congress and President.

How you feel about this may depend on what you think about internet privacy and corporate freedom.  At this point in history, the phrase "Internet privacy" is about as meaningful as "Trump modesty."  Both are in short supply.  Most people who spend any time at all on the web have turned from looking for electric toothbrushes online, say, to researching the versions of ancient Mayan calendars, only to have an ad for toothbrushes pop up in the middle of the British Museum's webpage.  Obviously, a combination of "cookies" (little browser things that tell servers where your web browser has been) and clever marketing schemes has engineered that outcome.  All the FCC rule might have done would have been to stop ISPs such as AT&T and Verizon from doing similar things, at least without asking first.   And the asking could have been buried in one of those novel-length terms-and-conditions documents that everybody must either lie about reading before signing onto a new service, or actually read (and I don't know anybody who reads them).  The only reason that the FCC could have passed the rule in the first place lies in the historical carve-outs of which Federal agency gets to regulate what electronic communications means.  A similar historical fluke explains why on-the-air TV shows are not quite as raunchy as cable shows:  the FCC gets to regulate on-air stuff, but not cable-only stuff.

So what has been portrayed in some circles as an epic loss of consumer protection turns out to be more of a turf battle among giant powerful Federal agencies and giant corporations, and the consumer just gets to watch the results from the sidelines. 

Even though the actual effect of either the FCC ruling or its revocation by Congress and the President might have been minimal, it's worth asking a broader question about how consumers—or citizens, to use a more general term—are faring with respect to the centers of power in the U. S.  I recently ran across a blog by a man who, back in May of 2016 before the party conventions had selected either Presidential candidate, predicted that Trump would not only be the Republican nominee, but that he'd win too.  Anybody can make a lucky guess, but this gentleman, a writer by the name of John C. Médaille, based his prediction on the fact that ordinary Americans were enraged that their interests have been ignored in favor of the interests of "the Rich, the powerful, the banker, the foreigner."  Of course, our current President belongs to at least two of those categories himself, and Médaille was far from pleased that Trump was probably going to win.  But he was right.

Powerful corporations such as Google and Facebook are able to offer "free" services that compel users to generate content that profits the companies.  Médaille, who believes in an obscure and mostly forgotten system of economics called distributism, sees this sort of thing as an injustice, which brings the matter into the scope of engineering ethics.  Because engineering, broadly speaking, makes everything on the Internet possible, engineers who work for such companies shouldn't simply turn a blind eye to the applications of their code, saying, "All they pay me to do is code.  What they do with the code isn't my business."  Google's code of conduct, summed up in the phrase "Don't be evil," is a masterful exercise in question-begging, namely because at least to my knowledge, it doesn't include a definition of "evil." 

And by the nature of human relations, we can never set out a precisely-written code of conduct that a robot could follow flawlessly, because we're not robots.  We're human beings, each of us a mystical world unto ourselves, and relations among such beings cannot be reduced to mathematical formulas. 

The kerfuffle about the proposed FCC ruling shows that, although our current President ran as the vindicator of the common man and woman, reality may be setting in rather faster than anyone expected—reality being the continuation of a long-term trend of concentration of both economic and political power in the hands of an oligarchic few.  By the nature of modern engineering, most engineers will end up working for medium-size to large corporations, and therefore have a perhaps unconscious bias in favor of policies and actions that favor such corporations. 

However, there are reasons that millions of people in the U. S. have experienced stagnating wages, worsening work conditions, and a lack of genuine opportunities to be a free contributor to the common wealth.  Instead, unless you have reached a certain educational level, your options are nearly all of the "heads we win, tails you lose" variety, and many men in particular have taken the easy way out of simply giving up on work and living off the meager surpluses of welfare and compliant relatives and girlfriends that are available. 

To reverse such trends will take more than an internecine government flap.  It will take first, awareness of the depth and scope of the problem, and second, a willingness to overlook differences and artificial divisions set up by those hoping to keep the masses tranquil, and to do something in a united way that will bring about meaningful change.  But that is a topic for another time.

Sources:  I used material from The Hill's website posted on Apr. 3, 2017 at http://thehill.com/homenews/administration/327107-trump-signs-internet-privacy-repeal., entitled "Trump signs Internet privacy repeal."  That article referred to a blog by a person described as "AT&T's top lobbyist" Bob Quinn at https://www.attpublicpolicy.com/privacy/reversing-obamas-fcc-regulations-a-path-to-consumer-friendly-privacy-protections/, which I also referred to.  John C. Médaille's prediction of Trump's triumph and his mixed feelings about it can be read at http://distributistreview.com/cassandra-calls-election/.  Another blog of mine on distributism can be found at http://engineeringethicsblog.blogspot.com/2008/09/what-is-distributism-and-why-should.html.