Tuesday, November 17, 2009

Holland first city with distance tax

The Dutch lead the way in transportation once again. They look to be the first country in the world to move from a fuel tax to a distance tax, with the cabinet presenting a plan to be voted on.

According to the DutchNews.nl story, the highpoints are "If the legislation is passed by parliament, motorists will start paying tax on every kilometer they drive" and that the "tax will be higher during the rush hour and for more polluting vehicles." Exactly right and as it should be, payment based on distance, emissions, and time of day. I've been saying for a while that movement from a gas tax to a distance tax is inevitable, and here is the start.

What interested me comes from the comment section. Unhappy people worry that it is regressive, represents double and increased taxation, is the end to their privacy, and is another step in the big brother government. These are all common concerns. A careful government presentation of the effort would dispel some of the false assumptions, and dealing head on with the privacy continues to be imperative.

I don't know whether the switch will mean higher road taxes. In the US, it should mean that. Today our transportation infrastructure is financed through gas taxes, and these haven't kept up with inflation. In fact, they remain unchanged at a national level for the last 18 years. That doesn't work! Our infrastructure is literally falling down.

The stimulus money, if well spent, would help a small amount. As a measure of the backlog of projects, we can look at the submissions for $1.5 billion in discretionary transportation projects that was in the ARRA (stimulus). The submissions from states were due September 15. The result: 1,381 applications seeking a stunning total of $56.9 billion -- 38 times the money available! It should be pretty clear that states are desperate for more money for transportation investment.

On the issue of privacy, I've blogged about how to address it many times.


vhamer said...

The per-mile tax is a pretty interesting idea. At the same time, The Netherlands already taxes car owners on the weight of their car (my father's old car cost him ~$1500/yr), and they have one of the highest gas taxes in the world. Parking is not cheap or particularly available, and speeding is curtailed by ubiquitous speed cameras. It seems to me that raising/tweaking the existing taxes would serve much the same purpose (and in much the same structure) as a new, expensive-to-implement/maintain per-mile tax.

Robin Chase said...

Your comments are valid, but here is another way to look at. Let's separate out owning (and storing) a car, which has arguably minimal negative externalities, from actual driving, which is usually more problematic. These are separate issues, so there is an argument for separating them.

Also, it is always better to turn fixed and sunk costs into overt and variable ones. See my blog on this topic here:http://networkmusings.blogspot.com/2008/10/all-you-can-eat-vs-pay-as-you-consume.html

Variable and overt costs really change behavior, even once you own the car.