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From NO CAR TAX To GREEN CAR TAX: A Fairy Tale

by: kindler

Thu Feb 21, 2013 at 19:18:09 PM EST


Cross-posted at Daily Kos

Once upon a time, there was a wild and barbarous land called Virginia, ruled by a race of giant trolls named Republicans. This land also contained tiny dwarves known as Democrats, but nobody ever really tended to notice them.

The Republican trolls liked to do big, messy, smelly, destructive things, like chopping off the tops of mountains to turn them into coal fields, and covering their shores with oil rigs. The trolls liked to drive around in big vehicles known as pickups and SUVs.

One day, a particularly gruesome troll named Gilmore jumped on a rock to get all the others' attention and yelled three words: "No Car Tax!" He repeated it over and over, until all the Republican trolls were excitedly yelling the same words, waving their hands and jumping up and down. (Trolls are very good at repeating things.)

In this way, Gilmore became King of the Trolls and was able to greatly reduce the hated car tax on their pickups and SUVs, and encourage another favorite troll chant -- "Drill Baby Drill" -- to ensure that the messy, smelly oil fields continued to fill the land.

So, all was good in the land of Virginia, until one day the trolls noticed that the dwarves also drove cars, but theirs were smaller and used less gasoline. This angered the trolls, since it contradicted the "Drill Baby Drill" chant.  

And so, the new King of the Trolls, named McDonnell -- a troll with unusually excellent hair -- jumped on a tree stump and started a new chant: "Green Car Tax!" Pretty soon, all the Republican trolls were waving their arms and yelling the same thing. So of course, there was a Green Car Tax imposed across the land, the oil fields kept flowing, and all was good in Virginia again.

It is possible that the Democratic dwarves may have said something on this matter, but as usual, no one paid any attention to them.

So, the moral of the story, boys and girls, is this: Trolls rule while dwarves get stomped on. Now shut up and go to bed. THE END.

kindler :: From NO CAR TAX To GREEN CAR TAX: A Fairy Tale
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Should I laugh? (0.00 / 0)
No, I believe I should cry.  How do these people continue to get elected?

Cry is appropriate ... (0.00 / 0)
That no "Very Serious Person" has done a real look at the utter BS of the claimed financial issues at play is sad.  

Every editorial page in the state should have published something about how this tax is highly counter-productive on environmental & health reasons, but that it is also simply BS because it would the sales/transfer tax on hybrids is more than enough to cover the lost $s in gas taxes and that it would take a decade+ of lost gas tax revenue to account for the $100 but that in that decade the hybrid owner would have paid $1000+.  http://getenergysmartnow.com/2...


[ Parent ]
But, but, but, but...the Great and Very Serious Washington Post (0.00 / 0)
is all FOR this plan! Even though, of course, for years they've been talking about the importance of INCREASING the gas tax. So....well yeah, they're utterly brain dead.

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[ Parent ]
I'll live with this (0.00 / 0)
I own a hybrid.  This new tax on hybrids will cost me about $.30 per day.  I don't like the policy but I assume that it was a necessary part of a compromise required to get enough votes to pass the bill.  For years the most sensible answer to this problem has been to index the gas tax to inflation.  That has been proposed by Democratic Senators like Chap Petersen and defeated by Republicans primarily from rural and small town Virginia.  I recall seeing statistics showing that the majority of hybrids registered in Virginia are registered in urban and suburban locales (far beyond the population averages in those areas).  So, I assume that the hybrid tax somehow appeals to Republicans' sense of fair play.  It is, in effect, a disproportionate tax on the suburbs.

The bottom line is that we need a transportation solution.  A weak solution is better than no solution.  DoD spending will be cut, with or without sequestration.  This will hurt Virginia.  Our strength (especially in NoVa) is the average education level of the workforce.  We must have a means of keeping those educated workers in our area / state as the decline in federal spending occurs and the transition from more federal to less federal (and more private) occurs.  Right now, traffic congestion is the single biggest negative to quality of life ratings in NoVa and Tidewater.  Progress on this will encourage people in the workforce to remain.  Political gridlock will discourage people in the workforce and they will leave.  It's not all or nothing.  However, it won't take too much out migration of educated workers before we start to see an economic impact.  It has been estimated that one high tech worker brings in enough money (through herself and her employer) to support five other people in the economy.  If the money flow starts to constrict, the first things that will be cut by the General Assembly are help for the poor, the elderly and children.

If the difference between having a transportation plan this year and not having one this year is $.30 per day for my hybrid, so be it.

Finally, a transportation plan this year greatly benefits Terry McAuliffe.  If the plan is set then the debate over whether to raise taxes for transportation becomes moot.  Taxes will have been raised under a Republican governor.  What's Cuccinelli going to do?  Demand that the McDonnell transportation plan be repealed just like he wants the Affordable Care Act repealed?  Please.  He is stuck without his most potent weapon - his "no taxes" mantra.  That, in itself, is worth $.30 per day to me.

 


The economic principle of Pigouvian taxation... (0.00 / 0)
...states that you tax the activity you want to reduce.  Taxes create an economic disincentive to do whatever it is you are taxing.  

So put a punishing $100 tax on alt fuel vehicles, guess what?  You discourage their purchase and use in Virginia.  People go to buy them in MD or DC or just move to those places all together because they want to live in a state that is focused on the 21st century, not the 12th.  

Repubs are so good at coming up with bad ideas and then pushing them on Dems who say, well, it could be worse so we better accept it.  Why do we put up with this crap?

For a Sustainable Virginia. Now on Twitter.


[ Parent ]
Agreed, we want to tax economic and/or social "bads" (0.00 / 0)
such as pollution. We want to incentivize, or at least not discourage, economic and or social "goods" such as energy efficiency. Democrats should be able to EASILY say "no" to Republican proposals that penalize the "goods" and incentive the "bads." It's really not THAT complicated.

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[ Parent ]
Ford Fusion (0.00 / 0)
A Ford Fusion gets 34 mpg combined.  A Ford Fusion hybrid gets 47 mpg combined.  That's a difference of 13 mpg.  The hybrid's MSRP is $3,500 more than the closest non-hybrid model (SE).  Let's assume gas prices are going to average $5 / gallon over the life of the car.  Let's set the life of both cars at 100,000 miles.  The non-hybrid will have to consume $14,706 worth of gasoline.  The hybrid will consume $10,638.

So, the hybrid costs $3,500 more but saves $4,068.  Of course, you spend the $3,500 when you buy the car and save the $4,068 over a ten year period.  At a 5% discount rate, that equates to $3,606.05.

Bottom line - by the time you pay the taxes on the extra $3,500 for the hybrid it's a wash.

People do not buy hybrids to save money.  They buy hybrids to save the Earth.  I believe that the demand for hybrids is inelastic and a $100 per year cost will prove to be a very small damper on demand.

Is it good policy?  No.  It's terrible policy.  However, continuing the 27 year frozen gas tax is worse policy.  That frozen gas tax represents an annual tax cut when viewed in terms of purchasing power.  Much like the Bush tax cuts, the gas tax cuts cause a cumulatively increasing level of pain.  The Bush cuts add to the deficit which then compounds the interest that has to be paid on the debt.  The gas tax cuts result in evermore congestion which continues to erode Virginia's "brand" as a great place to live, work and play.  They also result in a growing backlog of necessary repairs and expansions that will take longer and longer to accomplish once the transportation taxes are structured to inflate along with general prices.


[ Parent ]
I'm glad we agree... (0.00 / 0)
...that this is terrible policy.  I guess my tolerance for accepting terrible policy being turned into law just happens to be lower than yours.  

Repubs are so good at presenting us with these Sopie's Choice situations and telling us we're stuck with the alternatives they give us.  Well, we have an election this year -- why not have the Democrats grow a pair, get on the campaign trail and contrast forward-looking policy ideas with backwards ones -- instead of just accepting the Repub choice between terrible and less-terrible options?

For a Sustainable Virginia. Now on Twitter.


[ Parent ]
From Creigh Deeds (0.00 / 0)
This from Sen.Creigh Deeds:

"As a legislator, I am mindful we cannot allow the perfect to be the enemy of the good. There are components of the plan that individually would never get my support, including the ill-advised $100 surtax on hybrid vehicles. However, we have never been this close to adopting a plan to improve transportation funding."

"The compromise is dependent to a large extent on passage of the federal Marketplace Equity Act (MEA), which would create a tax on internet sales...The compromise stipulates that if Congress does not act by January 1, 2015, the wholesale gasoline tax will increase to 5.1 percent. In addition to raising revenues for transportation, the money generated from the MEA and the sales tax increase will also benefit K-12 education. The plan is expected to generate over $200 million by 2018 for our public schools."

I sure hope Deeds is correct about education funding. The state got through the Great Recession by shortchanging VRS and throwing education funding more and more on local governments. I personally don't see how the small increase in the sales tax will give education more funding, especially since transportation grabs a larger percentage of General Fund money. Put a little more in the GF and take out a larger part? "Show me the money."


I agree with Deeds on not letting the perfect be the enemy of the good. (0.00 / 0)
Having said that, Dems need to use whatever leverage they have to fix the most egregious parts of this plan, such as the "ill-advised $100 surtax on hybrid vehicles," before they vote for it.  They also should use their leverage to push for Medicaid expansion, crucially important to so many Virginians...

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[ Parent ]
To quote Patrick Hope on Twitter... (0.00 / 0)
"They say don't let the perfect be the enemy of the good.  I'm struggling with finding the good."

For a Sustainable Virginia. Now on Twitter.

[ Parent ]
Not Sure What That Is (0.00 / 0)
The Democrats in the House have no leverage at all, since the GOP has a veto-proof majority. In the Senate, Bolling is the only key to Medicaid expansion, and then the House will refuse to go along, or if they do, McD will veto...

Heck, the Senate Dems only had one guy on the committee to find a transportation compromise. The House put on Onzlee "Take me to Paris" as their token Dem.  


[ Parent ]
Oops... (0.00 / 0)
The Senate Democrats do have leverage. Bolling can't vote on transportation because it involves revenue... My bad. Hope they go for it, but I don't think Saslaw has the guts.

[ Parent ]
Taxes (4.00 / 1)
Lowering the tax on gasoline and putting a tax on "green" vehicles falls right into the climate deniers domain.  

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The purpose of Blue Virginia is to cover Virginia politics from a progressive and Democratic perspective. This is a group blog and a community blog. We invite everyone to comment here, but please be aware that profanity, personal attacks, bigotry, insults, rudeness, frequent unsupported or off-point statements, "trolling" (NOTE: that includes outright lies, whether about climate science, or what other people said, or whatever), and "troll ratings abuse" (e.g., "troll" rating someone simply because you disagree with their argument) are not permitted and, if continued, will lead to banning. For more on trolling, see the Daily Kos FAQs. Also note that diaries may be deleted if they do not contain at least 2 solid paragraphs of original text; if not, please use the comments section of a relevant diary. For more on writing diaries, click here. Thanks, and enjoy!

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