When is a penalty not a penalty?

There has been, in Virginia and elsewhere, a lot of discussion and complaining about a so-called Electric Car penalty.  The basic facts are described in the Huffington Post article available at this following link:


In summary, it’s essentially to try to recover taxes they’re losing because these vehicles don’t use as much (if any) gasoline. Gas taxes are, currently, the primary source of funding for road projects. Electric vehicles and hybrids pay much less in gasoline taxes, despite the fact they continue to drive on the roads and cause as much wear and tear on the road surfaces as gas guzzlers do.

The article rightly points out that a better solution MAY be to switch to a usage tax of one sort or another, based on either (or both) miles driven or the weight of your vehicle.

However, there are several problems with these solutions as well. They include:

1. Such a usage tax would likely get levied all at once (like your property tax), making it more of a challenge for citizens to pay.

2. Such a usage tax would likely get levied on the car’s owner, rather than on the car’s driver (when you buy gas, you pay the tax). So, Mom and Dad will suddenly subsidize their kids, etc.

3. Such a usage tax would likely NOT see a dollar-for-dollar decrease in the price of gasoline, as wholesalers and retailers take advantage of the sudden drop in the price to leave a few extra cents in there for their own profits.

4. Such a usage tax would not capture revenue from out-of-state drivers.

So…yes, it certainly reads like, and can be taken as, a penalty on electric car drivers, but the prevailing system is letting those drivers ride on roads paid for by others. So, who is getting penalized?

And, while the oil industry is probably quite pleased with it (and, so, “backs” it), I don’t think they are behind it. It’s possible one or more of their lobbyists pointed out the fact that these vehicles are hurting the states’ revenue stream, and maybe even provided a recommendation on what to do about it. Beyond that, I think the “likely backed by oil industry” part of that headline is a bit of innuendo.  I don’t think we’re well-served to simply trot out the standard demons of big oil and the Koch brothers without actual evidence.