A new legislative proposal aims to impose additional taxes on electric vehicles (EVs), despite their minimal impact on road wear and tear. This move comes as gas taxes have remained unchanged since 1993, and some lawmakers are considering eliminating them entirely amidst a global fuel shortage that EVs could help alleviate.
Dubbed the “BUILD America 250” bill, this bipartisan effort by Sam Graves (R-MO) and Rick Larsen (D-WA) seeks to address transportation funding for the next five years. While it covers federal highway funding and other transportation-related matters, the proposed EV tax has drawn criticism.
Proposed EV Tax Details
The bill proposes an annual tax of $130 on fully electric vehicles and $35 on plug-in hybrids, with automatic annual increases of $5. This measure contrasts with a prior proposal that lacked a collection method and was eventually dropped.
States would be responsible for collecting these taxes, and those refusing could face federal funding cuts. This proposal has stirred controversy, particularly since Graves, who has spearheaded similar initiatives, has received substantial contributions from the oil and gas industry.
Impact on Clean Transportation
Aside from the proposed taxes, the bill also reduces funding for clean transportation initiatives, such as EV charging infrastructure and electric buses. This reduction in funding could hinder the U.S. from advancing in clean transportation, while other countries, like China, continue to progress.
Disparity Between EV and Gas Taxes
Currently, many states already impose taxes on EVs that exceed those on gasoline-powered vehicles. These taxes often fail to consider actual road damage, which is predominantly caused by heavy trucks. Furthermore, the federal gas tax has remained at 18.4 cents per gallon since 1993, resulting in underfunded highways.
On average, gas vehicles contribute around $80 annually in federal gas taxes, significantly less than the proposed EV taxes. The EV tax would automatically increase each year, unlike the static gas tax.
Economic Implications
The proposed EV taxes, projected to generate about $700 million annually from 5.3 million EVs in the U.S., would be a small fraction of the approximately $400 billion spent on transportation each year. This raises concerns about the fairness and effectiveness of such measures.
Critics argue that the proposal unfairly targets EVs while overlooking the environmental and health costs associated with gasoline consumption. Fossil fuel subsidies, estimated at $760 billion annually in the U.S., further complicate the issue.
Future of EV Adoption
As the U.S. grapples with a global fuel crisis, making EVs less attractive through additional taxes could hamper efforts toward energy independence. Meanwhile, some states have suspended gas taxes without addressing EV taxes, exacerbating the disparity.
For a fairer approach, experts suggest taxing vehicles based on mileage and weight, with adjustments for pollution costs. Until then, the current proposal remains contentious.
If you have any thoughts on this issue, you can contact your congressperson, especially if they are part of the transportation committee.
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Original Story at electrek.co