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East Coast states want to tax drivers’ travel, not their gas

Started by cpzilliacus, June 25, 2016, 10:24:06 PM

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jeffandnicole

Quote from: froggie on June 27, 2016, 10:51:10 PM
Quote from: US 41The gas tax works great

If it really worked great, we wouldn't be having this thread/discussion/argument.  And "a few cents" doesn't even come close to meeting the need/demand.  If this nation really wanted to get transportation funding back on its feet via the gas tax, an increase in the order of 20-30 cents/gallon would be necessary.  Yes...that's how bad things have gotten.


But the result of the discussion is there's no easy alternative. Many possibilities involve tracking people where they go which is never popular or self reporting their mileage which isn't going to easily or accurately happen.  People wanting to change the gas tax seems to be the result of people trying to find a solution to a problem where one doesn't exist.  It's the amount of money getting to the states to fix their roads is the problem...not how were collecting the tax.


mariethefoxy

Why not figure out a way to tax electric vehicles in a way thats similar to the current fuel tax if they are worried about declining revenues from people buying less fuel?

Brandon

Quote from: mariethefoxy on June 28, 2016, 12:26:57 AM
Why not figure out a way to tax electric vehicles in a way thats similar to the current fuel tax if they are worried about declining revenues from people buying less fuel?

Well, we could have people pay for it when they use a Tesla supercharger.  Swipe/chip to activate and pay the equivalent fuel tax right then and there.
"If you think this has a happy ending, you haven't been paying attention." - Ramsay Bolton

"Symbolic of his struggle against reality." - Reg

slorydn1

Just a little comparison between gas tax and mileage based tax that I put together on a spreadsheet after a similar discussion last year.

NC's fuel tax is 37.5 cents a gallon, and I did not factor in the federal tax (the discussion we were having was about states implementing the tax). And although I did purchase a small quantity of fuel in VA, WV, KY, SC, and TN I just went with NC's tax as its the highest rate, and it simplified my formulas. For the mileage tax I assumed 2 cents a mile.

My wife and I combined for 28,631 miles driven in 2015 (11,911 in my wife's car, 16,720 in mine) and we purchased 1381.41 gallons of 93 octane fuel for our 2 Mustangs (the cars eat better than we do, lol).

We paid $518.03 in taxes at the pump ($229.29 for the wife's car, $288.74 for mine). Using the mileage based formula it would have been $572.62 total ($238.22 for hers, $334.40 for mine), which is a combined $54.59 increase.


The beauty of the mileage system is that it would be the same for the guy with the plug-mobile of your choice, and for the lady with the hybrid as it is for me. I don't know about y'all, but I'm getting a little tired of taxation for behavior modification. Just because my cars averaged a combined 20.73 real world, all condition mpg in 2015 doesn't mean that that they did any more damage to the roadways than someone getting infinity MPG because they plug into an electrical outlet.


The drawbacks of a mileage system are those stated by many before me: sticker shock, big brother tracking our every move, and apportionment.


I guess we could fix two of those issues by having all the money go to the state that the vehicle is registered in. We wouldn't need GPS tracking then. Maybe the several states could get into a revenue sharing agreement similar to what some professional sports leagues do for their smaller market teams, in order to help the states like Delaware that wouldn't have the vehicle registration base of a Pennsylvania or New Jersey.  Or maybe (and I can hear the gasps now) all the money should go to the feds for disbursement to the states (pretty sure that I don't like this idea either, just throwing it out there).


Or we could just stick with what we have and raise the taxes at the pump.



Please Note: All posts represent my personal opinions and do not represent those of any governmental agency, non-governmental agency, quasi-governmental agency or wanna be governmental agency

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mvak36

Quote from: Brandon on June 28, 2016, 05:54:42 AM
Quote from: mariethefoxy on June 28, 2016, 12:26:57 AM
Why not figure out a way to tax electric vehicles in a way thats similar to the current fuel tax if they are worried about declining revenues from people buying less fuel?

Well, we could have people pay for it when they use a Tesla supercharger.  Swipe/chip to activate and pay the equivalent fuel tax right then and there.

I agree with you. Either that or make them pay a certain fee every year when they register their cars.
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hotdogPi

What about taxing trucks only, at 10¢ per mile for 18-wheelers and 5¢ per mile for other trucks?
Clinched, minus I-93 (I'm missing a few miles and my file is incorrect)

Traveled, plus US 13, 44, and 50, and several state routes

I will be in Burlington VT for the eclipse.

jeffandnicole

Quote from: 1 on June 28, 2016, 09:33:57 AM
What about taxing trucks only, at 10¢ per mile for 18-wheelers and 5¢ per mile for other trucks?

It's a cost that'll simply be passed on to a consumer anyway.

Also, how do you know when a trucker is an 18 wheeler vs. cab only?

MisterSG1

Quote from: froggie on June 27, 2016, 10:51:10 PM
Quote from: US 41The gas tax works great

If it really worked great, we wouldn't be having this thread/discussion/argument.  And "a few cents" doesn't even come close to meeting the need/demand.  If this nation really wanted to get transportation funding back on its feet via the gas tax, an increase in the order of 20-30 cents/gallon would be necessary.  Yes...that's how bad things have gotten.

No, sir, no! Before I get into this topic, I know what I'm going to say is going to strike a nerve with a lot of posters on this site but it needs to be said.

The reason why we are having this discussion is because salaries in the public sector have become over bloated. Think about it, the richest state in the US currently is Maryland, and well it's not exactly hard to see why that is the case.

US41, you seem to be aware of how the system works, at least you seem to be one of the most rational and skeptical people on the forums on these such issues, if you actually think that an increase of the fuel tax will actually solely be used for the maintenance of the roads, oh boy you have a lot to learn.

I may live in Canada but please listen to what I have to say. In my province of Ontario, they have a public sector salary disclosure of ALL provincial and city level public sector workers in Ontario who make over $100,000 a year. In the media, this list is reported as the "sunshine list", and you can see this disgusting list for yourself right here:

https://www.ontario.ca/page/public-sector-salary-disclosure-2015-all-sectors-and-seconded-employees

Remember that government payroll comes from the money earned in the private sector. If you look at the ones involving GO Transit, there are some people on this list who are simply bus drivers making that insane amount.

Now let's do some simple math, this year 115,431 public sector workers at the city or provincial level made over 100,000 a year. Obviously, the mean salary on the sunshine list is higher, but let's just assume in our case that everyone makes 100,000 who is on this list.

This comes out to a whopping 11 billion dollars per year on salaries alone who make 100,000 a year. Consider that the median income in Ontario for one person is 46,000, even if we took 10,000 from every sunshine list earner, they'd still be in great shape.  A figure of 10,000 on 115,000 employees comes out to be 1.1 billion in revenue per year. God knows what you could do with that much per year.

Governments never shrink, they always grow larger, and what has this lead to, more big corporations jumping ship from Ontario as taxes have gotten higher to feed the public sector salaries, obviously I don't see this ending positively. There's gonna come a point where this system can't go on anymore.

froggie

QuoteThe reason why we are having this discussion is because salaries in the public sector have become over bloated.

Not really related to transportation projects, unless you're one of those who think that transportation should be funded from a state/province/nation's general fund.

And one could make an argument that the big public sector salaries you are railing against are a response to the HUGE increase in private-sector executive salaries, which make public sector pay pale in comparison.

Quoteif you actually think that an increase of the fuel tax will actually solely be used for the maintenance of the roads, oh boy you have a lot to learn.

Depends on the jurisdiction.  Some entities have a lockbox on such revenues.  Of course, going with a literal translation of your statement, there are plenty of jurisdictions that spend increased revenue on new highway projects instead of road maintenance.

vdeane

Yeah, the highly paid public workers are MANAGEMENT, and private sector management makes EVEN MORE.  The majority of rank and file state workers don't make even close to that.  I think an amount that the majority of NYSDOT employees can expect to make at the END of their careers is about $60k (those people being maintenance workers who do things like bridge inspections, materials testing, etc.).  Office workers can expect to TOP OUT at $90-100k (if they even pass $80k - hiring considerations get political very fast after someone has been promoted into a supervisory role, even when the titles are still officially civil service, and it's gotten worse since even I started - way back when, only upper management was political (SG 29 and higher); it then trickled down to SG 27 and now it's even down to SG 23).  The higher amounts are appointed titles that are politically connected.  In fact, the size of the public workforce in NY has decreased a LOT over the past couple decades (a hiring freeze was instituted after 9/11, and there have only been a few very brief thaws since), and many people today do the work of 5-6 people just 10 years ago, resulting in lower quality work for the taxpayers.

I don't know how Canada has been about keeping up with costs, but in the US, there hasn't been an increase in the federal gas tax in 20-25 years, so it's lost 1/3 of it's purchasing power to inflation.  People may not be noticing inflation because wages are stagnant, but that doesn't mean it isn't there.
Please note: All comments here represent my own personal opinion and do not reflect the official position of NYSDOT or its affiliates.

US 41

Quote from: MisterSG1 on June 28, 2016, 09:38:39 AM
US41, you seem to be aware of how the system works, at least you seem to be one of the most rational and skeptical people on the forums on these such issues, if you actually think that an increase of the fuel tax will actually solely be used for the maintenance of the roads, oh boy you have a lot to learn.

This is why I have opposed a raise in the gas tax over and over again. But I'd much rather see a raise in the gas tax by a few cents than a mileage tax. (BTW thanks for the compliment.)

A mileage tax is just too complex to work and even worse it's a way for the government to directly track you. The gas tax is not perfect, but no system is ever going to be 100% perfect. IMHO the gas tax is still the best option. The problem with a mileage tax is that you cannot just get rid of the gas tax. It wouldn't be fair for people in Indiana to pay a mileage tax and not a state gas tax, because people from everywhere else across the country would get to drive in Indiana basically tax free. Even if all 50 states adopted a mileage tax and dropped the gas tax it still wouldn't work, because people from Canada and Mexico would get to drive tax free in the US. It also wouldn't be fair to me if I was driving in a foreign country and I was still having to pay a mileage tax for those foreign miles. I would also be paying a gas tax on top of that in Canada / Mexico. The best way to collect taxes for the roads is to collect the money where the gas is purchased. Anything other than a gas tax gets way too complex to actually work fairly.
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Sykotyk

The thing with the gas tax is it's very difficult for the average person to circumvent. It's also very little 'bookwork' that needs to be done. Each state handles a few thousand fueling stations submitting paperwork and tax money to them.

If you want Ohio to switch over to several million 'accounts', one each for each registered vehicle, that requires every person to either be tracked or honestly admit which states they drive in, without much in the way of being able to prove or disprove their 'statements'.

The gas tax is an easy way for the state to gather the tax revenue. It's not perfect. Someone driving from Ohio to PA may gas up in Ohio and PA gets nothing. But, it can also work the other way. Even with states with huge imbalances in price/tax, there's this interesting factor of supply/demand affecting pump price, rather than 'cost plus tax'. Which is why one state may have a gas tax 20 cents higher than their neighbor, but each state has the same, or almost exactly the same, pump price. Because the cheaper state just pays more.

In Ohio, Hubbard (last exit on I-80) has almost identical prices to Sharon/Hermitage, just north of I-80 in PA. Yet, PA's gas tax is a lot more. Move a little further from the border, and the PA tax more accurately reflects the cost difference. But, either PA is getting a 'price discount' or Ohio is getting a 'because people will pay more just across the border' increase.

But in the end, with 11 million people, the loss of the cross-border drivers and through traffic that might have filled up in another state, etc, average out. You're not going to see all 11 million crossing the state line every time they want to fill up, nor are you. And even then, you factor that into your tax per gallon price.

The problem with the "raising the gas tax is untenable' yet they're insistent on trying out the mileage tax, is that they're hoping the general public don't realize they're about to be charged a lot more before it's too late to go back.

Why would they be switching? Because they're going to get the same revenue with a lot more overhead (billing, collections, enforcement, reimbursements for out-of-state purchases, etc)? No. Because they're going to set the tax to get the amount needed for the funding they require for the roads. The same amount they could get if they just raised the gas tax. Don't be fooled, they will be collecting more, and it's not just going to be on the backs of the 'electric car owners'.

It's decades of increasing fuel mileage, inflation, and increasing cost of road construction (design standards, quality of construction, longevity of what's built, re-construction being more than new construction from the 50s) have left the current prices below the amount needed.

A long time ago, narrow shoulders on bridges, one-time use bridges that had to be entirely reconstructed, the cost of rebuilding a road while handling heavy traffic on that route takes more time (see why Knoxville just closed the road for a few years instead of years upon years of moving lanes, handling keeping lanes and exits open, etc). It costs more.

You  can also complain about how expensive 'construction workers' are today, but would you do it for crap pay? East coast, risk of death from idiot drivers on cell phones and texting, a lot of overnight work, etc, etc, or get an office job making similar wages, in air conditioning, with the greatest risk of life and limb might be a bizarre run-in with the copier that garners you on the Darwin Awards list.

kalvado

Quote from: Sykotyk on June 28, 2016, 10:15:40 PM
You  can also complain about how expensive 'construction workers' are today, but would you do it for crap pay? East coast, risk of death from idiot drivers on cell phones and texting, a lot of overnight work, etc, etc, or get an office job making similar wages, in air conditioning, with the greatest risk of life and limb might be a bizarre run-in with the copier that garners you on the Darwin Awards list.

Maybe not exactly relevant.. Tapan Zee bridge in NY is currently being rebuilt. Project cost is $3.9B. Original bridge was built in 1950s for $81M, or $800M in today prices.
Something costs a lot more than 50 years ago - and I doubt that wages  for welders and riggers went up that much...

vdeane

Given that the original Tappan Zee was built during a steel shortage and had to cut a lot of corners just to get built at all, it strikes me as an apples to oranges comparison.  Plus the new bridge is significantly larger than the old one.  I think it also got built before Governor Rockefeller increased the pay scales to improve the quality of the state workforce.  Back in the 50s, state jobs paid so little that one needed a second job just to pay the bills.  Rockefeller changed that because he didn't want to have to rely on contractors - he wanted the best of the best working for the state, doing everything in house (sadly, the state has been moving away from that mindset; there's a lot less flexibility with contractors - for example, if we need a traffic count done immediately, we can't do it; there's a month (minimum) lag to schedule when the contractor will go out, get the count, and then process it, and our interests have to compete with the other Regions and Main Office).

The descriptions of potential mileage tax implementations in this thread seem to be as complex as the income tax.  I don't want to have to do a ton of paperwork for something that is now automatically paid when I fill up my gas tank, and I don't want to have to be in the business of guessing/tracking mileage; I will be very, very happy to get out of that business when I buy out my car lease, in fact!
Please note: All comments here represent my own personal opinion and do not reflect the official position of NYSDOT or its affiliates.

kalvado

Quote from: vdeane on June 29, 2016, 01:32:42 PM
Given that the original Tappan Zee was built during a steel shortage and had to cut a lot of corners just to get built at all, it strikes me as an apples to oranges comparison.  Plus the new bridge is significantly larger than the old one.  I think it also got built before Governor Rockefeller increased the pay scales to improve the quality of the state workforce.  Back in the 50s, state jobs paid so little that one needed a second job just to pay the bills.  Rockefeller changed that because he didn't want to have to rely on contractors - he wanted the best of the best working for the state, doing everything in house (sadly, the state has been moving away from that mindset; there's a lot less flexibility with contractors - for example, if we need a traffic count done immediately, we can't do it; there's a month (minimum) lag to schedule when the contractor will go out, get the count, and then process it, and our interests have to compete with the other Regions and Main Office).
Well, looks about right  - $70 and $92  /hour (including benefits) rates probably reflect on costs...

exit322

Quote from: 1995hoo on June 27, 2016, 05:11:23 PM
Quote from: Sam on June 27, 2016, 02:50:42 PM
Quote from: kalvado on June 27, 2016, 01:56:28 PM

How do you enforce out-of-state tolls? For example, I have a friend who was on assignment in NYS while maintaining Oregon legal residence. For 3 or 4 years, don't remember for sure.
What I can see is a mileage tax with credit for taxes on in-state gas purchases. Driving out of state - other state still gets the gas tax. THere will be some double-dipping for longer haul, and that is not good.
But how to implement that... I am not sure there is a simple way.

New York State already requires residents to pay New York sales tax on items purchased and taxed in another state, so it's probably only a matter of time before NY will require us to pay NY fuel tax on gas bought in another state.

So-called "use taxes" are pretty common, though usually they purport to require you to pay tax on (1) an item you bought out-of-state without paying sales tax or (2) an item you ordered and on which you weren't charged sales tax. As has been noted, very few people pay these. I've often wondered about the constitutionality of category (1) because it seems to me that if, say, you go to Delaware to buy clothes because they have no sales tax, that is a matter between you and Delaware and your home state has no say in the matter–if they try to tax you, isn't that tantamount to an import duty on something bought in another state?

Regarding the final point "US 41" makes, it's important to recognize the problems the gas tax creates with alternative-fuel vehicles like Teslas. Those vehicles' owners should certainly pay some sort of road maintenance tax.
The legality issue is likely gotten around by the verbiage.  It's not an import tax, it's a tax on the privilege of using a taxable item in your resident state.  There would be no tax on anything you used in Delaware, just on the items you buy or use in your resident state.

As a practical matter, in a decade of public accounting and working on individual returns, I have seen precisely 2 clients report Ohio Use Tax on our IT-1040.

XT1585


exit322

Quote from: vdeane on June 27, 2016, 06:30:53 PM
I'm not sure how either category is legal.  If I live in NY but buy something from a website based in PA, I fail to see how it is any different than if I drove to PA to buy the product.
Many sales and use taxes are "destination" based, such that the purchase is taxed based on the tax rates of where the transfer of taxable property took place.

XT1585


J N Winkler

Quote from: exit322 on July 03, 2016, 12:14:32 AMAs a practical matter, in a decade of public accounting and working on individual returns, I have seen precisely 2 clients report Ohio Use Tax on our IT-1040.

The Kansas Department of Revenue claims (without citing any figures) that Kansas taxpayers are very honest about declaring untaxed out-of-state purchases and paying Kansas use tax (which is the same as sales tax) on them.

My last out-of-state purchase of something expensive that did not otherwise require registration (like a car) was a laptop through Amazon.  I had the option of buying through Amazon itself, which would have meant paying sales tax since Amazon has logistics centers in Kansas, or from one of several Amazon sellers based out of state.  I went for the latter, accepting a longer lead time on delivery, because the Kansas legislature had just passed a couple of TRAP bills I violently disagreed with and which were later found to be unconstitutional.  I refused to give the state the sales or use tax revenue (amounting to about $100 under rates then in effect) to waste on defending laws I believed should not have been passed in the first place.
"It is necessary to spend a hundred lire now to save a thousand lire later."--Piero Puricelli, explaining the need for a first-class road system to Benito Mussolini

cpzilliacus

The biggest problem with MBUF (mileage-based user fee) is one that most here can relate to - it is very expensive to implement, and the cost of collecting revenue is significantly higher than motor fuel taxes or electronic toll collection (I am deliberately not including cash toll collection, which is eventually going to go away).

Fuel taxes and electronic toll collection are easy and simple to collect.
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