Maintaining our highways requires some thought (Part II of II)
- March 7, 2019
- Auto Extended Warranty, Extended Auto Warranty
- Posted by Peter F
- Comments Off on Maintaining our highways requires some thought (Part II of II)
At the current moment an impending crisis is upon us. But from a number’s perspective, all the doom and gloom doesn’t seem like a crisis at all. Since 2012, only a sprinkling over 1 million plug-in cars have been sold. There are currently 250 million plus cars on the road today which means the percentage of plug-ins is infinitesimal. With this said, when Netflix first made their entry into the rental-via-mail market, Blockbuster Video was just that, a blockbuster success. Their video rental stores were everywhere, and this writer remembers walking every Friday evening with the pup to rent videos for the weekend. Seen a Blockbuster lately?
Electric car sales are up 80 percent from 2017. Last year only 360,000 were moved, but being up 80% with anything – washing machines, platform shoes, mesh hats – year–over–year is unheard of. Correction, it is heard of – Netflix video subscriptions. European and Chinese government are steering folks away from traditional cars which is something Netflix never counted on in their nascent phases. They replaced traditional video rental with superior technology. Plug-in vehicles count on cleaner technology, ANDgovernment support.
Back to Zagorsky. But before that, what are some states already doing to get a hold on this impending highway financing crisis? Seventeen states have been charging electric car owners a fixed fee. The annual taxes range from $100 to $200 per vehicle. A common problem with the fixed fee approach is many drivers leave their states of residence while driving. So, the tax goes to their state’s coffers, but they might end up using other state’s highways a significant percent of their time.
Another issue with the fixed fee is it’s regressive. A fixed fee is fixed across all plug-in vehicle owners, regardless of how much they drive or how much they earn. Poorer consumers in turn are obviously hurt most. Oregon has been toying with a solution where drivers can volunteer for a program that allows them to pay based on the number of miles they drive. Tracking devices are installed in their vehicles to track miles traveled, but there have been more than a handful of opponents to said proposal. Their problem – they don’t want the state tracking their comings and goings. Fair point.
Zagorsky believes there is another way forward. Major alternative vehicle manufacturers are installing charging stations across the country. They provide kilowatts of electricity in the same way a gas station provides gas. Now, many plug-in owners charge up at home, but that’s principally because charging stations are not nearly as prevalent as gas stations. Yet, once they are, tacking a tax on to their charge in the same way it’s being done at gas stations is an appropriate response, Zagorsky feels. If the move forward is electricity or other non-conventional forms of fuel, tax folks the same way you’re taxing them now. Now comes the hard part – the alternative re-fueling stations.