Taxing vehicle use is a great idea, but vehicle ownership also has negative externalities which means it is appropriate to tax buying or owning a car including:

- Polution created by making a car.

- Cost of parking, especially in cities:

  - parking takes up space, making it harder to walk between things
  - street parking is untidy / ugly
  - street parking obstructs traffic, bike lanes and bus lanes
  - the need for large parking lots drives up the cost of building, which is passed on to drivers and non-drivers alike

Even in suburban areas having the streets full of parked cars has negative effects like reducing the space available for children to play.

This is actually a significant problem in the UK. You could create a much better environment for pedestrians and cyclists if city streets weren't clogged with parked cars all the time.

Danish streets do seem to be much clearer, even in areas that have similar road conditions and population density to UK cities.

I think the UK suffers from lack of 'cost for parking on public roads'. One proposal is to bring in a Location Specific Public Highways Parking Permit with discounts for residents without off-road parking as needed. Commuters could also purchase these permits at inflated prices.

Some cities in the UK already have that with "residents parking" - you prove to the local authority that you live in the area and you get to park in dedicated parking spaces that aren't available to non-residents.

And in Edinburgh when I lived there you had to pay for the permit, IF you could even get one because all the permits were taken up by the people who lived there already. Edinburgh has a lot of tenement housing (long rows of flats built before the car existed as a consumer good) so there isn't 1 space per domicile. It is common to drive around for 10 - 15 mins looking for a space.

Yeah - I was talking about Edinburgh where I lived in the centre for 30+ years. In some areas where there are only buildings on one side of the road the density of residents parking is actually fine - though I appreciate that most areas aren't like this.

They have these in Bath, where I live, but the issue is that they 'zone' an area and then shift the problem out of that zone into neighboring zones. Also residents parking usually only applies a restriction Mon-Sat 8:00-18:00.

I think we need to be more radical and apply zones across the whole of the city and apply restrictions 24/7. Discounts for a zone would apply if resident, no off road parking, and city car (no diesel/small).

Commuters would only be allowed permits if city car. Nottingham also brought in Workplace parking permits.

Cities have the infrastructure in place (good public transport combined with park and ride) to encourage people to leave their cars at the edge of cities. Residents within cities should not be driving to work within the city. Neither should parents be dropping kids off by car.

Naturally there are always people that need cars. Even Copenhagen cannot get below 9% car usage despite 62% of people cycling.

> Pollution created by making a car

And yet, the tax is not specifically on the pollution. You could argue that this might be difficult to do in practice, but in any case such a pollution tax ought to also apply to other products like computers and TV's, which it doesn't.

The problem with a flat tax, is that it doesn't discourage anything other than buying a nice car. In general, an expensive car is not worse for the environment (including parking etc), than a cheap car. A large, bulky car might be that, but that's not what we're taxing here.

> - Polution created by making a car.

No different from making any other object - you might as well tax e.g. TVs if that's the rationale.

> - Cost of parking, especially in cities:

Agreed, but better solved by disallowing street parking and taxing land ownership. Again, tax the parts that introduce the negative externalities as directly as possible, otherwise you create perverse incentives.

Agreed RE parking, but RE taxing TV - well, I'd say sure, tax it too. The more I think of it, the more it seems to me that a general CO₂ emission tax would help solve so many problems in the current world...

Most people who think about it and are not politicians seem to think that a carbon tax or a cap and trade system would be a very good tool to prevent global warming from getting even worse.

You can't selectively tax certain goods without creating a market failure.

E.g. if the purchase of cars isn't taxed I'll just import €10,000 of audio equipment by buying an old beater, then ripping out and selling the sound system and selling the car for scrap, while making a big profit because I'll be competing with local sellers that have to pay import tax on sound systems.

This happens with cargo vans in the US, which are imported as passenger vans before being converted, to avoid a 25% tarrif on the import of cargo vans.

http://blog.caranddriver.com/feds-watching-fords-run-around-...

However I'd challenge that this is a market failure - this is an example of the failure of a rules-based approach to regulation.

In countries which take a principles-based approach to regulation then the substance of the transation is considered as well as the form.

So this kind of nit-picking to circumnavigate the rules wouldn't have been allowed.

What would you call it then? Market failures can also be created by ineffective regulation, as is the case in my example.

Considering the substance of the transaction isn't a viable strategy, it might be possible at larger scales as in your Ford example, but individuals can and will find clever ways around tariffs that are impossible for the authorities to keep up with.

As an example, I lived in a European country where import tolls on bicycles were much higher than the import fees on spare parts, so if the price of shipping was low enough you could simply ask the seller to send over a bike in multiple packages marked as spare parts to evade the import fees.

How are you going to detect cases like that with perfect accuracy? You'd need some massive tracking system to figure out who bought what, and even then it could be trivially evaded by me and a friend buying 1/2 of two bikes each as spare parts and combining them after they've been imported.

In Europe there are no import taxes between member states though. I live in Lithuania and it's quite common for people to drive to Poland for larger purchases (e.g. kitchen appliances) where they are a lot cheaper. If you buy as a business you pay 0% VAT in the country of origin.

That's why regulators need to be smarter.

Audio equipment is not taxed at 100%.

It doesn't need to be. Let's say it's taxed at 25%, then €10,000 of equipment costs €12,500 after the import fees, if I install that €10,000 of equipment in a shitty €1,000 car I've effectively got a €1,500 discount on the equipment and a free car to sell for scrap.

That's fraud, because that car would then be worth €11000 and should be taxed as such.

You think nobody tried to undervalue taxed imports yet? Probably a fraud as old as mercantilism.

No, it's not fraud. Yes the car is now worth €11000, but it's not taxed on its ticket price, it's taxed on what it is. It's a car, and a car includes seats, a car stereo (albeit now a very expensive one), an engine etc.

Nobody's trying to undervalue the car as costing €1,000 with a €10,000 stereo, that would be fraud.

The point is that by introducing differences in what sort of taxes you have to pay for certain products you trivially open yourself up to legal tax evasion in the form of simply bundling higher cost items as part of products in lower tax categories.

Perhaps a better example: Let's say you have a 200% tax on cylindrical metal tubes, but a 10% tax on bicycles. A lot of people would now legally import bicycle frames, cut them apart, and evade the import fees without the authorities being able to do anything about it. There's nothing illegal about buying a bicycle frame, and there's nothing illegal about cutting apart your bicycle and re-using it for parts.

Ah, I see where the confusion comes from. You mean when the audio equipment is taxed higher than the car.

I think OP did not mean "put 0 tax on cars" but rather remove the extra 100% tax on cars, so it's just taxed like any other product - i.e. just the same as tax on audio equipment. Then it would not matter.

These taxes are from a time when cars were a status symbol; they're (most would say 'they were', but that I disagree with - nominally, yes, but I'm talking about popular support for the underlying sentiment) not so much a tax to stimulate environmentally responsible behavior as they are a tax to 'punish' ostentatious displays of wealth. It's the same as the 'BPM' tax here in the Netherlands. It's, at its core, a "protestant austerity" thing.

If the BPM isn't a tax to stimulate environmentally responsible behavior why is it a direct function of CO^2 emissions, with no tax payable on zero-emission vehicles, no matter how mch they cost or how much of a display of wealth the are?

1. https://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/...

Yes, that's what it is now nominally (especially now that it's directly related to CO2 emissions). But what I meant was - these taxes existed in a time when nobody cared about that. The BPM was even called a 'luxury tax'. It's a way to tax 'excessive' consumption, which is how cars were (are?) seen.

The justification, on the surface, has changed nowadays. My point was, though, that the relatively wide spread acceptance of this sort of tax is not because everybody is so environmentally conscious; it's because it's a function of the cultural instinct to 'punish' those who flaunt wealth. Or if you don't want to call it 'punishment', at least to make those who want to drive luxury cars pay more on top of the taxes they need to pay that also apply to other goods (i.e., VAT). I mean, if those taxes were to make those driving cars pay for the building of roads and to counter emissions, you'd charge a flat fee, or a per-kilometer fee. You wouldn't tax them proportional to the list price of the car. A 250k Lamborghini doesn't wear out roads more than a Kia, but it costs several times the purchase price of the Kia just in taxes.

So my remark was that, despite today's bend of environmentalism, these taxes need to be seen in the context of the broader societal mores of egalitarianism; or 'suppression of those that show wealth in socially not accepted ways', depending on how you want to spin it.

Reading over the Wikipedia article[1] it seems that you're historically at least somewhat correct, since this tax used to be directly based on the price of the car, but since 2007 it's been partially and then in 2010 entirely based on CO^2 emissions.

There are other tolls & fees for owning a car in The Netherlands. I don't own a car, but from what I've read taken as a whole the tax policy here has nothing to do with "luxury", you're free to buy a million Euro gold-plated scooter.

It's meant to discourage excessively heavy vehicles and those who pollute more. Any sort of a flat fee that doesn't take into account the weight / size of the vehicle doesn't account for the disproportional cost to infrastructure incurred by larger & more polluting vehicles.

1. https://nl.wikipedia.org/wiki/Belasting_van_personenauto%27s...

"you're free to buy a million Euro gold-plated scooter."

Sure, and if you keep yourself warm at night by burning e50 bills, you won't be taxed extra, either. My point is not (or only partially) about the current tax, or how it's justified. My point is that the societal context in which these taxes were instated are a key point to understanding why things are the way they are. And the pertinent part of that context is Calvinistic austerity, which is ingrained in Dutch collective psyche. I know that there is significant cognitive dissonance among a large part of the Dutch population when someone claims that religion has shaped their world view in some way, especially among those that consider themselves 'atheistic liberals', but it's silly to deny it - there are tomes and tomes written about this in social science literature. I mean fuck - my wife gets almost angry when I claim that her world view is shaped in part by the society she grew up in, and therefore by religion, as much of Dutch society is influenced by Christianity one way or another. But objectively speaking, how can this point be denied?

Anyway, when the BPM was reformed a decade ago, the objective was to keep it 'fiscally neutral', meaning that the amount levied in total needed to stay (roughly) the same as it was before. So current rates are a direct consequence of the way it used to be. In Belgian law (where a similar thing happened in 2012 or 2013 I think) it's even more explicit; there a (what I think is a) regression formula is part of the law that determined the new calculation for the 'road tax' as it is called there. Tweaking the parameters in that formula until projected revenue matched historical revenue was essentially how those rates were determined. In such a case, how can one claim that it's really about environmental concerns? Of course the direction (towards 'polluter pays') is there; but again, my main point (but I'll agree that I'm probably burying it between all the tangents...) is that the real answer to the GP is: to understand the why of these taxes, you have to understand the society it operates in.

That's very informative. Thanks, just to be clear I honestly meant my initial post as a question, not as a snarky rhetorical remark.

It's really interesting to know about the history behind something like an obscure tax, and how something like the EP directive to tax carbon emissions gets implemented as adjusting an existing tax with its own historical baggage at a level where it's exactly matching the revenue, but now ostensibly for a different purpose.

Unless the law changes though the tax will de-facto be phased out in the coming years/decades as zero-carbon vehicles get adopted, I wonder if that's something the people who made the change back in 2007/2010 explicitly had in mind or if it's an unintended emergent phenomena. It'll be interesting to see if the tax is allowed to go away or if there'll be another reform to tax luxury vehicles or something like that.

Denmark are taxing fuel and requires you to pay "vægtafgift" (weight-tax, based on how much your vehicle weighs) and "grøn ejerafgift" (green owner tax, how efficient your car is per liter of gasoline) to be allowed to drive on the roads.

For anyone interested, here is the govt. calculator in English (almost) for cost of import into Norway: https://www.skatteetaten.no/en/person/cars-and-other-vehicle...

Vægtafgift is not a thing anymore, there is only ejerafgift now.

More than half of the price of gas in Denmark is taxes.

Same in Germany, in 2014 it was 59%. In 25 of 28 EU states fuel was even more expensive than in Germany.

The main harm from cars are co2 emissions, and electric car emissions are weighted to manufacturing and raw materials. So it makes sense to tax their purchase.

> Tax fuel

That accounts for fossil fuel cars but not electric ones.

> bring in road pricing

A fine idea except it's logistically difficult to implement tolls everywhere.

A lot of European countries have vignette stickers (often only for buses/HGVs), which are needed to travel on highways. The sticker attaches to the inside of the windscreen. The only infrastructure/logistics needed is to sell the stickers to fuel stations, and a few signs when entering the country.

https://en.wikipedia.org/wiki/Vignette_(road_tax)

The EU plans to introduce a common system for road charges in a couple of years:

https://www.euractiv.com/section/road-charging/news/fifteen-...

Well electricity is so heavily taxed in Denmark the price for electricity is multiplied multiple times over.

The actual cost like 90% of the price is taxes if I remember correctly.

So taxes for electric cars "Fuel" have already been accounted for.

Edit: grammar is hard

It's about 70%. If you only count the electricity specific taxes, it's around 50%.

Fresh numbers from todays elpris.dk - øre = Danish cents (yes, they are called ears).

Cost of production: 26,05 øre/kWh Transmission: 35,19 øre/kWh Taxes: 105,40 øre/kWh VAT (25,00 pct.) 41,66 øre/kWh

In total: 208,31 øre/kWh

I suspect, requiring all cars to have a telematic device is the answer here. Insurance companies are already using these and the behaviour of individuals drastically improves when one is installed.

This has an advantage in enabling provision of a device at country borders etc.

Another option is to develop a cheap Automatic Number Plate Camera and create a network of cameras across our road systems.

Both approaches not only allow road pricing strategies, but also address speeding.

This may be a bit big brother for some but this is pretty much the way I see us heading.

a complete big brother

The future is going to be dreadful isn't it.

Blame the drivers. If most drivers weren't showing utter disregard to traffic laws pretty much all the time, there wouldn't be a dire need for ALPRs to curb speeding.

And if speed limits were set to what people really drive you would see a huge drop off in speeding! People ignore things that are increasingly obviously stupid. Any time a large majority of drivers are ignoring the rules it's an engineering problem, not a driver problem.

I basically agree, the problem is that we tend to say, "we want to make this road safe by making it tolerant of faster driving" which basically translates to encouraging faster driving because drivers base their speed on what feels appropriate.

> People ignore things that are increasingly obviously stupid.

Except that if you look at it from a little higher vantage point than driver seat, it seems obvious that it's those people who are stupid.

Singapore is working on a GPS-based congestion charge http://www.channelnewsasia.com/news/singapore/satellite-base...

Here in Portugal we have highways with automatic tolls using a small transponder. It is quite common.

You don't need the transponder; multiple of our highways already read the plates. Then if you don't check for outstanding payments, they'll send you a letter charging it plus and administrative fee - often higher than the toll itself!

It's literally highway robbery :|

Do that in a rental car and the fee doubles again. Cost me $25 to cross a minor bridge to save 2min in the middle of the night.

Well cars have odometers don't they, tax based on that.

Then you just create a different problem, or in case of Denmark, contribute to an existing one. You're going to make the poor worse of. Taxing on kilometers driven is unfairly hard towards those who cannot afford to live close to their place of employment.

To the wealthy it won't matter much if you tax the purchase of the car or the kilometers driven. Those making below the average salary are normally excluded from living in the center of the cities, and is in some cases even forced outside the bus routes. Also Danish public transit is notoriously bad outside the four largest cities.

> Then you just create a different problem, or in case of Denmark, contribute to an existing one. You're going to make the poor worse of. Taxing on kilometers driven is unfairly hard towards those who cannot afford to live close to their place of employment.

So is there a use for car taxes at all? We could always just tax the rich directly, if we don't care about tying the tax amount to road usage.

How is it any worse than the current tax on gas, though?

Taxing fuel it's better as it correlates quite well with engine size and usage and therefore pollution.

It's not, but it is different to taxing the sales price of a new car, which was how I understood the idea.

I don't know how it in in Denmark, but wealthy people often live in nice houses in the suburbs and commute by car. Here in Berlin at least that is the case. The fuel taxes are offset by tax deductions for commuter miles though.

With the way house prices are going, Amsterdam is rapidly turning into a city for rich people. There's a lot of rent-controlled housing, but waiting lists are more than 8 years on average. It's mostly the outskirts that are affordable, but not the center or the good neighbourhoods surrounding the center.

Well that true in Denmark as well, but both the city centers and the suburbs are pretty expensive, so risk getting pushed past those, and then you start getting into areas where public transport is basically non-existing.

People do drive abroad you know. If I do most(or any percentage) of my miles abroad why would I pay tax on those miles where the car is registered? Meantime, I buy the fuel in those other countries, paying tax there.

No idea how to solve that for electric vehicles. Presumably still at the point of charging.

The consensus is around some sort of road pricing either through ANPR cameras or telematic boxes.

Fuel duty revenue in the UK is £28billion. That's a big hole to fill.

At the moment driving electric cars is so cheap because we buy electricity at domestic prices. It's as if we were buying utility oil(red diesel) for cars - then it would be stupidly cheap, no? There's a good reason it has been made illegal and you can't use heating oil for your car even though technically it would work just as well.

I suspect that eventually you will be able to charge your electric car only from an approved charger that bills you a higher-rate car tariff, just like you can only use fuel sold at a petrol station in your car.

As for the telematics - excuse me saying so, but the UK government can fuck off with suggesting even more surveillance, it's hard to fight off insurers installing telematics boxes as it is already.

I get the concern about surveillence. But I can see some amazing benefits of treating cars and the road as a single connected system. You could hold vehicles at the journey start point until space on the road opens up. Or adjust speed limits in real time depending on conditions. And maybe even remove traffic calming by modifying user speeds. The free-for-all we have now is hopelessly disfunctional and drivers suffer from that.

Absolutely, and I agree with this sci-fi idea of an interconnected system which has only safety of everyone as a goal and everyone is better off for it. If that's possible, I'm happy to have it implemented tomorrow.

But right now as it stands currently, telematics boxes are nothing else but a greedy attempt to get more cash out of drivers - they collect proprietary data, ran through secret algorithms, to secretly decide whether your insurance should go up or not. Try getting a letter from your insurer telling you that your insurance will go up due to your "driving style" and then ask if they can explain what they mean by that. They can't. "the computer said so" is an absolutely fantastic excuse for these companies to make more money and I'm extremely cynical about it, even if we ignore the entire surveillance aspect for a second. The whole idea needs a lot more regulation/openness to be acceptable.

Are you suggesting the Danish should be taxed for travelling they might well have done in Sweden?

If the car was registered in Sweden they'd be paying tax there. If the per-mile tax is similar and there are a similar number of Danes driving in Sweden and Swedes driving in Denmark it evens out.

"The Danes" or "the Danish citizen".

"Danish" is an adjective or a cake.