Washington State Legislators Propose Passenger Vehicle Greenhouse Gas Excise Tax
08 February 2008
Six Washington State legislators have introduced a bill (Senate Bill 6923) that would establish a passenger vehicle greenhouse gas excise tax, the amount of the tax to vary based on the EPA combined fuel economy ratings for each vehicle.
Proceeds of this tax would be used for the design, construction, and operation of transportation facilities and services that provide alternatives to the use of single-occupant vehicles and for programs that encourage the use of these facilities and services. Allowable uses of these revenues would include—but would not be limited to—transit, high-capacity transportation, bicycle and pedestrian facilities, and transportation demand management programs.
The transportation sector is Washington state’s largest contributor of greenhouse gas emissions, with emissions from road transportation accounting for approximately one-third of the states total GHG emissions.
The legislature finds that the global warming costs associated with automobile emissions are not 19 included in the existing costs of using a vehicle. Additionally, the legislature finds more alternatives to single-occupancy vehicle travel are needed to significantly reduce automobile vehicle miles traveled.
The legislature finds that a greenhouse gas tax is an effective way to 4 embed some of the global warming costs of automobile emissions into the cost of using a vehicle, and at the same time provides resources to fund transportation alternatives
Although a tax based on a direcet measure of greenhouse gas emissions would be preferable, the legislators opted to use fuel economy as a proxy measure. For vehicles without an established EPA fuel economy rating, the bill proposes using engine displacement to define the tax amounts.
| Proposed Passenger Vehicle Greenhouse Gas Excise Taxes | ||||||
|---|---|---|---|---|---|---|
| Fuel economy rating | Tax | |||||
| ≤ 10 mpg | $240 | |||||
| 11 mpg | $220 | |||||
| 12 mpg | $200 | |||||
| 13-14 mpg | $180 | |||||
| 15-16 mpg | $160 | |||||
| 17-18 mpg | $140 | |||||
| 19-21 mpg | $120 | |||||
| 22-26 mpg | $100 | |||||
| 27-34 mpg | $80 | |||||
| 35-48 mpg | $60 | |||||
| 49+ mpg | $40 | |||||
| Taxes Based on Engine Displacement | ||||||
|---|---|---|---|---|---|---|
| Displacement (L) | Tax | |||||
| 4.0L or more | $240 | |||||
| 3.0L to < 4.0L | $180 | |||||
| 1.5L to < 3.0L | $200 | |||||
| 13-14 mpg | $120 | |||||
| < 1.5L | $80 | |||||
Resources
So if I buy a Prius, the highest mileage family cars produced and never drive it. I still owe an extra $240, Yeah that seems fair. Facepalm!
Posted by: Joseph | 08 February 2008 at 10:15 AM
Am I reading this wrong, or is this tax setup to tax farmers most heavily. I understand the reason for the tax, and clearly semis will be taxed hard, but how does that work for a company based outside of Washington that drives into the state to pickup items and leaves again?
This may just push businesses out of the state and add more mileage to the trucks. I also think that at some point they should reward people for being environmentally friendly and have a no tax point. Maybe 49+ should be 0 tax instead of 80 tax. That will help encourage people to reach the zero tax mark.
I read it again and I'm not sure if this is a yearly tax as I first thought, or if it's a tax when buying the vehicle. I still think a zero tax mark would be beneficial.
Posted by: Steven Rigney | 08 February 2008 at 10:19 AM
The bill itself specifies that this amount would be levied annually. It's not clear if this new tax would replace the existing vehicle registration fee or be levied on top of it. There is also no mention of a countervailing cut elsewhere in the tax code, which ought to be an issue.
http://www.dol.wa.gov/vehicleregistration/fees.html
The idea of dedicating the revenue from any particular tax to particular types of spending is generally a bad one. It needs to go into the general pot and spending programs need to be funded from that. If politicians are not interested in developing and maintaining a state's infrastructure, voters should replace them with candidates that are. Infrastructure may be boring but it is still a core responsibility of government.
Otherwise, the idea of taxing vehicles based on their fuel economy is conceptually similar to the EU directive requiring member states to switch to a system of annual fees based on CO2 emissions, which some countries have already done. Simply taxing the fuel at a higher rate - also with countervailing tax cuts elsewhere - would arguably be more effective in the US. However, that might be a lot harder to impose politically or perhaps, subject to a legal challenge from the federal government.
Posted by: Rafael Seidl | 08 February 2008 at 10:24 AM
This is not smart. It is simplistic, particularly in taxing displacement when often times larger engines are more efficient than smaller for various reasons. If they want to pursue the concept, I think a direct fuel tax would be a far better idea. And the fuel tax should be 15% higher on diesel fuel to offset its greater energy content and carbon content, and presumably lower on E85 for the same reasons (though how much lower depends which study of E85 energy balance you believe).
Posted by: Zach | 08 February 2008 at 10:25 AM
@zach
you aren't considering the fact that diesel fuel takes less energy than gasoline to produce. not to mention that diesel cars have the potential to run biodiesel which has a better energy balance than ethanol (and less net CO2 emissions). also, diesel cars don't only get better fuel economy because of the higher energy content per volume of fuel, but because the diesel cycle is more efficient than the otto cycle. (due to the high compression ratio of the engines). regardless, i think the proposed bill is well intended but flawed.
Posted by: sean | 08 February 2008 at 11:03 AM
@sean
I don't know how much energy is used to refine #2 diesel out of petroleum vs. getting gasoline out of the same petroleum. I'm guessing it's very similar, but I'm interested in any hard facts. I am not anti-diesel, in fact I own one diesel vehicle and used to own another, but I think they are overhyped by people who haven't owned them and/or who own VW Jetta TDI's and follow them like a cult. Diesels tend to be about 30% more efficient on a mpg basis, but half that (15%) is based on the higher energy content per gallon, with the other half - also 15% - is based on higher thermal efficiency due to the diesel cycle and typical compression ratios. Gasoline direct injection is coming close to wiping out that 15% thermal efficiency advantage, and the other 15% is, in my view, illusory since it is based on the volume of the fuel rather than its energy or carbon content. I also think the potential to run biodiesel is irrelevant, as gasoline engines have the potential run biobutanol, not to mention for many of them E85 (which might be derived from waste or grasses, even though for now it is mostly derived, inefficiently, from corn). Incidentally I have used a great deal of B20 in those vehicles and like the reduced smell and visible smoke, but I'm not convinced I really did anything beneficial for the climate or our oil imports in using it. (I did provide a minor benefit to local soybean farmers, most of whom have since converted to corn; I have seen B20 availability stagnate and even decline since the E85 marketing boom really took off).
Posted by: Zach | 08 February 2008 at 11:33 AM
Why don't they simply raise the gas tax the same amount required to return similar revenues as these new taxes?
That way you tax people based on how much they drive AND how fuel efficient their car is which encourages the exact same behavior as the programs they want to fund.
Posted by: Dave | 08 February 2008 at 11:44 AM
If you make people write an annual check for each vehicle, they're more likely to pay attention.
It uses displacement only when there is no EPA mileage figure published for that vehicle.That said, they should have categories for 5-6 and 6+ liter engines, to hit the Hummer H2's (no published figures).
Posted by: Engineer-Poet | 08 February 2008 at 12:17 PM
People will spend this annual fee in one night at a vacation resort, but they are outraged at this. THIS pays for those roads and bridges you drive over...or did you think they came for free?
Posted by: sjc | 08 February 2008 at 12:29 PM
My view is what Dave pointed out - if your goal is to reduce GHG emissions and oil use, the amount people drive is as important as what they drive. Someone who drives a Prius in a 70 mile commute uses more oil than someone driving a H2 in a 2 mile commute. I think a fuel tax is much fairer while also being more likely to support the desired behavior. (I have some problem with the whole idea of manipulating behavior, but that's a different issue.) And I personally notice what I spend on fuel more than what I pay once a year for my car registration.
Only real drawback to a fuel tax is avoision by people living near the border with a state that has lower fuel taxes. That shouldn't be much issue for Washington - most of their population isn't close to a state border, and I doubt Oregon's fuel taxes are much if any lower. Idaho's might be, but very little of the WA population can drive to Idaho for gas.
Posted by: Zach | 08 February 2008 at 12:33 PM
Actually Joseph, if you had a Prius (2007 as an example) and you drove it regularly, you would be paying $60, but if you didn't drove it and there wasn't any established EPA combined fuel economy rating for the car, then you would be paying $80 bucks since the car has a 1.5L engine displacement.
Posted by: Gerald Shields | 08 February 2008 at 12:33 PM
Say, you had an Hummer H2, then you would be paying $220 since the H2 can go slightly more than 10 MPG or $240 if there aren’t any EPA ratings because the H2’s engine displaces about 6.0L.
Posted by: Gerald Shields | 08 February 2008 at 12:40 PM
Let the fool screaming liberals in King County ( Seattle) fund their own public transportation fantasies without taxing others in WA who are not stupid enough to live near them.
Posted by: gary | 08 February 2008 at 01:36 PM
My mistake thinking you would have to pay both. So what is the family car that would be exempt from this tax. Because if you have no choice, but to pay the tax, it is just a money grab.
Posted by: Joseph | 08 February 2008 at 01:44 PM
"Although a tax based on a direcet measure of greenhouse gas emissions would be preferable, the legislators opted to use fuel economy as a proxy measure."
Then honesty (how fleeting) would demand this be called an "Additional Fuel Tax."
Posted by: gr | 08 February 2008 at 02:44 PM
I've always thought that vehicle weight should be taxed and that the revenues be used to repair bridges and roads. There is a direct correlation between the two (wear and tear).
Posted by: GreenPlease | 08 February 2008 at 03:56 PM
@Stephen Rigney:
This impacts passenger vehicles only, not off-road equipment such as a farmer would use, nor non-passenger vehicles like trucks used for hauling crops, seed, fertilizer etc. I don't see how it impacts farmers more than other residents.
As someone filling my diesel car with biodiesel I'd be paying an extra $60 despite doing my best to reduce effective CO2 emissions. As Rafael says, the politics of a gas tax is currently still hot, as we've had several gas tax increases in the last few years, but the excise tax was nearly eliminated by Tim Eyman initiatives (Gary take note: he's a non-liberal resident of King County, there's plenty of them driving Lexii (pl. of Lexus?), Mercedes, SUVs etc.) This would reinstate an excise tax as part of the annual car tabs.
Insults aside Gary, if you think about it, the liberals of King County and elsewhere are the ones taking the bus or riding their bike to work but they still own a car to go skiing and and hiking on the weekend. As owners of a car they'll be paying just as much as those commuting 50+ miles each day. If you don't believe we should take steps to reduce our CO2 emissions just why are you reading the *GREEN* car congress web site?
By using the money raised for alternative transportation only, and not to a general fund or extra road building, you get double the intended effect for your money. The tax collection encourages moving to less polluting cars, while the spending helps reduce emissions by giving people cleaner options for their transportation needs.
Posted by: Floatplane | 08 February 2008 at 04:30 PM
If you don't believe we should take steps to reduce our CO2 emissions just why are you reading the *GREEN* car congress web site?
Not to presume to speak for Gary, but there are a lot of us out here who are interested in energy efficiency and clean transportation for reasons having nothing to do with the passing hysteria over global warming. Some of us just like clean air and secure energy supplies.
Posted by: Matthew | 08 February 2008 at 05:00 PM
Taxing on displacement may have us driving short stroke hi revving engines like the 600cc inline fours of motorcycle practice. Since total piston area is a much fairer way to gauge engine power - politicians or their advisers don't seem to have a good grasp on physics - and since piston diameters vary only in the 75mm-95mm range between big and small, then it would seem simpler if not totally fair to have taxation based on the number of cylinders. There is an opportunity here to provide inducements in the rates to encourage three and perhaps even two cylinder passenger cars in order to curtail the horsepower race and make lighter cars more of a consideration.
Posted by: T2 | 08 February 2008 at 05:00 PM
I vote for higher fuel tax, plus one-time, gas-guzzler/excise tax levied at the time of purchase. Gas-guzzler tax should escalate from a credit (> 50MPG, say) to some significant penalty (< 15MPG). The limits and zero point could be adjusted over time as needed.
Posted by: Nick | 08 February 2008 at 05:24 PM
Higher fuel tax = something like $10 per gallon is fair - to the earth.
Posted by: Rich | 08 February 2008 at 06:47 PM
"Higher fuel tax = something like $10 per gallon is fair - to the earth."
Yeah. A fare for all and no fair to anybody!
Posted by: sulleny | 08 February 2008 at 08:01 PM
From the bill:
1 (3) The proceeds of this tax must be used for the design,
2 construction, and operations of transportation facilities and services
3 that provide alternatives to the use of single-occupant vehicles and
4 for programs that encourage the use of these facilities and services.
5 The allowable uses of these revenues include but are not limited to
6 transit, high-capacity transportation, bicycle and pedestrian
7 facilities, and transportation demand management programs.
Sorry, guys, nothing for roads and bridges. Just another revenue grab for pet projects. A couple decades back they experimented with free bus fares in Seattle. Result? Empty buses that weren't being ridden.
Posted by: Arthur | 08 February 2008 at 08:12 PM
Hey, I LIKE the idea of "pedestrian facilities." That would be ah... subsidized foot massage?? Free shoe shine??
Posted by: sulleny | 08 February 2008 at 08:20 PM
@ GreenPlease -
wear and tear of road surfaces is proportional to the fourth power of axle load. In practice, virtually all of it is caused by heavy duty trucks.
Posted by: Rafael Seidl | 09 February 2008 at 05:18 AM