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.

Not Grading On the Curve: The White House's Infrastructure Report Cards

 

Since at least 1988, the American Society of Civil Engineers (ASCE) has maintained what they call an Infrastructure Report Card that highlights critical shortcomings in the nation's public built environment.  The reasons for this are pretty obvious:  civil engineers and the construction industry in general live on the development and maintenance of infrastructure, and because so much of it is paid for by government funding, which in a democracy is supposedly under the control of the people, you should let the people know what they ought to be spending money on, infrastructure-wise. 

 

The ASCE report-card list found itself blinking in the spotlight of publicity last week when the Biden administration lifted it bodily and made it part of their promotional efforts to pass a multi-trillion-dollar spending package that is focused nominally on infrastructure.  The ASCE's definition of infrastructure and the Biden administration's definition are two different things.  To the best of my knowledge, the ASCE has no public position on the government's funding of child care, for example, but there is money in the spending package for that.  Let's focus on the grades themselves, though, and what role public engineered infrastructure plays in the body politic.

 

As someone who has handed out grades for more than thirty years, I would not be caught dead with a grade roster like the one the ASCE gave out.  The highest grade was C+ and the lowest was D-.  The first problem is that what you might call the dynamic range is very limited.  Whatever criterion was used to obtain the grades was rigged to produce basically the same score with only minor variations from state to state.  It's easy to guess why the ASCE avoided the extremes of the grade scale.  Giving out A's would be the same as saying, "You're fine, no need for any public works projects next year."  And an F would say that a state's infrastructure is a total failure.  I've been in one or two places around the world where something like those conditions prevail, but even Puerto Rico (the lone recipient of a D-) is better than that.

 

But why no B's?  I guess the ASCE wants to create at least some sense of alarm even in the states with the best infrastructure, such as Georgia or Utah.  There's enough variation in the grades to make people want to see how their state did, which is the main purpose of the exercise.  Beyond that, I don't believe there are too many profundities lurking in the various grades for the different states.  And thirteen states didn't even get a grade, either on the ASCE's own ranking or the identical one handed out by the White House. 

 

Looking beyond the short-term publicity aspect of the situation, what is the proper role and scale for public spending on engineered infrastructure?  There are extremes on both ends of the political spectrum.

 

Absolute libertarians would have us live in a totally private world—private companies would build roads and bridges, even municipal infrastructure like water and sewer systems, and the only publicly funded activities would be outward-facing things such as national defense.  I'm not aware of such an extreme being tried on a large scale in recent history anywhere in the world, and anyway, the complications of getting hundreds of bills every month for every little thing you did would be nightmarish from an individual point of view.

 

On the other extreme is socialism, in which everything from infrastructure to retail to manufacturing and services is run by the government.  Unlike extreme libertarian regimes, people have tried strict socialism a number of times, most spectacularly in the old USSR.  That regime gave rise to unprecedented misery and death and collapsed in 1990, which is not a strong recommendation. 

 

Most governments of varying political stripes tend to a mixture of private and public investment, as has been the case in the U. S.  During the 19th century, the main transportation network was built by private railway companies, which were however heavily subsidized by the federal government and eventually regulated by the first quasi-independent executive-branch agency, the Interstate Commerce Commission.  The railways were displaced in the 20th century by roads and eventually the Interstate Highway System, which was a federal-state partnership that most would agree was a success, though it forever changed the face of America.  President Eisenhower, who was one of the Interstate's main proponents, had the good fortune to propose his system at an all-time high of national prosperity, but we don't have that advantage now.

 

Nevertheless, the Biden administration is proposing to pay for the approximately $4 trillion infrastructure bill with higher taxes, mainly on corporations.  Corporations can pay higher taxes only if they charge higher prices, or else go out of business.  Neither eventuality is desirable from the consumer's point of view, but one or another will have to happen, probably some of both.

 

There is one school of thought that says the federal government could pay for true infrastructure improvements by simply printing money (or borrowing it from the Federal Reserve, which in my limited understanding of finance amounts to the same thing).  Distributist John C. Médaille claims that this move would not be as inflationary as it sounds, because the expansion of the economy that results from improved infrastructure would absorb the rise in the money supply.  If twice as much money is injected into an economy which soon produces twice as much value, any inflation will be temporary.

 

Médaille's theory would seem to apply mainly to new infrastructure, not just repairs on the same old infrastructure we've been putting up with all along.  But it's an interesting thought, and would avoid some of the negative consequences that higher corporate taxes will surely have, such as companies fleeing the U. S. altogether.  Another of Médaille's principles is that if you tax something, you're going to get less of it, and I don't think we want fewer and less profitable corporations, but that's what you'll get if you raise their taxes.

 

Other things being equal, fixing America's broken infrastructure is a good thing, but how to pay for it is a problem with no easy solution.

 

Sources:  I referred to a report on U. S. News's website at https://www.usnews.com/news/best-states/articles/2021-04-13/biden-administration-issues-state-infrastructure-report-cards and the ASCE website's report cards on the states at https://infrastructurereportcard.org/.  John C. Médaille's Toward a Truly Free Market is the best current exposition of the economic and social principles of the political philosophy called distributism that I know of.

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.

The Theology of Global Warming

Last Saturday, October 19, was the date of the Second Annual Global Frackdown.  In case you didn't hear, the Global Frackdown is an international day of activism on which people who believe that global warming is an oncoming train that's about to knock us silly, gather in groups and protest the oil industry's practice of fracking.  Fracking is a technology that has produced renewed yields from old oil and gas fields and promises to make the United States largely energy-independent in a few years.  But there is no question that fracking leads to the burning of more fossil fuel than otherwise, which is the reason for the Frackdown.  According to the movement's website, there were Frackdown events scheduled even in Texas, where fracking is a native industry and practiced widely.  Opponents of global warming seem to believe in their cause with an almost religious fervor, and for some it may be exactly that:  a substitute religion, complete with a theology, an ethics, and an eschatology that foretells doom for the planet unless we get with the gospel of global warming.

The Frackdown is sponsored by an outfit called 350.org, whose guiding light is one Bill McKibben, a journalist and author of such books as Fight Global Warming Now, Enough, The End of Nature, and Eaarth.  The last title requires a little explanation.  McKibben's basic theme throughout is that humanity has transformed the globe into an artifact (thus The End of Nature).  The rather unfortunate neologism "Eaarth" is McKibben's term for Earth.2, the new thing that isn't really a natural environment anymore, but isn't completely under our control either.  Despite the world's new status as a manufactured product, the laws of physics have not been repealed, and McKibben claims there will be absolutely inevitable bad consequences that will follow if we keep acting as though we were just a slight perturbation in the thing we have historically called Nature.  (Picture a 200-pound St. Bernard who still thinks he is a cute little cuddly puppy and tries to sit in your lap.)  Chief among these perturbations is our burning of fossil fuels such as coal, oil, and gas, which began with the Industrial Revolution and continues to be the single most important energy source worldwide.  McKibben appears to believe as earnestly in the pronouncements of the Intergovernmental Panel on Climate Change (IPCC) as he believes in the Bible (he is a practicing Methodist).  The focus of his most recent efforts has been to sponsor grass-roots movements to give the fossil-fuel industry a bad reputation by means of divestiture movements, Global Frackdowns, and other activist measures sponsored through 350.org.  Why 350?  That is the alleged tipping point of parts per million carbon dioxide in the atmosphere, beyond which innumerable disasters loom.  The current number (as of May 2013) is around 400 ppm, by the way.

I picked up McKibben's Eaarth expecting a uniform challenge to my blood pressure, and for the first two chapters I found what I expected:  a laundry list of terrible things that will happen, and are already happening, because of global warming, which is said to be largely if not exclusively due to anthropogenic carbon dioxide in the air.  Storms, droughts, loss of seacoast regions, die-offs of all kinds, you name it.  So far so bad. 

But then I got to Chapter 3, "Backing Off" and I checked the cover to see if the book was really written by only one author.  McKibben turns out to be what I would call a crypto-distributist.  Distributism, as almost nobody knows, was a short-lived political movement popular in England in the 1930s, whose most well-known exponent was the writer G. K. Chesterton.  Its slogan could have been "smaller, more local, more decentralized," and the old principles of distributism are in perfect harmony with McKibben's plans for us to survive the oncoming global-warming disaster.  For example, here's a problem:  climate change may cause entire monocultures of ag-industry genetically modified foods to disappear.  Solution:  have thousands of independent farmers supply hundreds of different varieties to farmers' markets in cities around the globe, and some of them at least will make it.  Problem:  giant fossil-fueled power grids with a few huge plants are wrecking the environment, and giant nuclear plants to replace them would cost too much.  Solution:  spread solar and other renewable energy sources everywhere so that people can be largely energy-independent down to the city block and house level. 

The biggest change McKibben calls for is not technological but cultural.  He thinks we will have to end our love affair with the super-independent lifestyle so encouraged by American culture and commerce, and live more like we used to, in interdependent communities where not only did you know your neighbors, you depended on them for essential things in your life such as services, goods, and jobs.  Only in this way will we survive the bugbear of climate disasters that await us.

Eaarth is really two books: one written by a frenzied climate-change activist, and another written by a pleasant, earnest Methodist Sunday-school teacher who wants us all to get along together and be good little distributists, but without using that word.  I see no indication that McKibben has even heard of distributism, but most of his solutions lie squarely in that tradition.  And to the extent that they do, I by and large agree with them, although my pragmatic side doubts that McKibben and his fellow activists will be able to make much headway against the powerful entrenched political and economic interests who would like things to stay the way they are now.

To the extent that McKibben gets us to have more to do with our neighbors and less to do with huge multinational corporations, I hope he succeeds.  But he seems to have reached the same desirable conclusions as the English distributists through what seems to me to be a long and unnecessary detour through the notion of global warming and its promised doomsdays, which has almost taken the place of a religion for many people.  If you believe that buying an electric car will make environmental Armageddon 0.0001% less likely, then your faith has convenient ways for you to take actions that are unquestionably righteous, and to condemn those bad actors such as fossil-fuel companies that are unquestionably evil.  But life is seldom that simple, and I hope McKibben writes another book that sets forth more substantial and eternal reasons for people to be more neighborly—and leaves out all that stuff about global warming.

Sources:  Bill McKibben's Eaarth was published in 2010 by Henry Holt & Co.  The website 350.org has links about the Global Frackdown and many other related activities.  For more information on Distributism, see my blog of Sept. 22, 2008, "What Is Distributism, and Why Should Engineers Care?"