Author Topic: Anti-Mustachian laws  (Read 5319 times)

Bloop Bloop Reloaded

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Anti-Mustachian laws
« on: November 21, 2020, 03:06:29 AM »
My state has just introduced a 2.5c per kilometre tax on Electric Vehicles. That's $10 per 400km (250 miles) travelled.

Apparently the reasoning for this is to make it "fairer" because EVs don't pay a fuel levy but still use roads.

Keep in mind EVs are subject to all the other vehicle-based taxes including registration, road tolls and so on.

In my view - this is a stupid law. You are discouraging the take-up of good technology. You might as well hit non-smokers with a non-pollution tax because we don't pay the sin taxes that smokers pay.

I think this is an anti-Mustachian law too. Sure, you might say you can ride a bike. But for those who need a car, surely EVs should be encouraged.

There's not been a lot of public outcry, I guess because the idea is that if you can afford an EV (they are super expensive here in Australia, even low-end EVs), you can afford to pay more tax. Australians tend to have that thinking.

Any examples of anti-MMM laws in your jurisdiction?

bill1827

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Re: Anti-Mustachian laws
« Reply #1 on: November 21, 2020, 04:00:06 AM »
There's nothing particularly anti-mustachian about that. in the uk a lot of revenue is raised from fuel taxes, with a large scale change to vehicles which use untaxed fuel there's going to be a big hole in government revenue.

"Fuel excise is the largest source of road-related revenue but it has been falling for some time.

According to the Bureau of Infrastructure, Transport and Regional Development, in 2013Ė14, public sector road related revenue totalled $27.8 billion. Fuel excise contributed about $10.8 billion or 39 per cent, down from about 44 per cent in the early 2000s."
 
From https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BriefingBook45p/FundingRoads

The issue of road pricing is being raised yet again in the UK with this in mind, bringing in £27billion in 2019/20. (Here the duty is £0.58 per litre with 20% VAT on top.)

https://www.theguardian.com/business/2020/nov/16/road-pricing-could-offset-loss-of-fuel-duty-from-electric-cars

Cranky

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Re: Anti-Mustachian laws
« Reply #2 on: November 21, 2020, 04:46:40 AM »
Itís a road tax. Youíre using the roads.

Bloop Bloop Reloaded

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Re: Anti-Mustachian laws
« Reply #3 on: November 21, 2020, 05:32:06 AM »
Itís a road tax. Youíre using the roads.

If it were a road tax then it should be levied on bicyclists and ICE car drivers as well. After all, they use roads too.

Malcat

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Re: Anti-Mustachian laws
« Reply #4 on: November 21, 2020, 06:49:06 AM »
Hmm...that definitely sounds like an anti-mustachian tax because of the environmental aspect of it.

I guess Australia isn't putting a lot of investment into promoting electric cars?

partgypsy

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Re: Anti-Mustachian laws
« Reply #5 on: November 21, 2020, 07:13:39 AM »
They need to rejigger how to fund roads, than punish electric car users who don't buy gas.

ixtap

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Re: Anti-Mustachian laws
« Reply #6 on: November 21, 2020, 07:21:42 AM »
What would be the equivalent for an ICE with say 30mpg?

Bloop Bloop Reloaded

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Re: Anti-Mustachian laws
« Reply #7 on: November 21, 2020, 07:28:20 AM »
What would be the equivalent for an ICE with say 30mpg?

Fuel levy is 42.3c per litre.

30mpg = 7.84L/100km.

7.84 x 0.423 = $3.32 per 100km = $13.27 per 400km.

So the fuel levy is about 30% higher than the EV levy, for a typical-ish petrol car.

ixtap

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Re: Anti-Mustachian laws
« Reply #8 on: November 21, 2020, 07:32:20 AM »
What would be the equivalent for an ICE with say 30mpg?

Fuel levy is 42.3c per litre.

30mpg = 7.84L/100km.

7.84 x 0.423 = $3.32 per 100km = $13.27 per 400km.

So the fuel levy is about 30% higher than the EV levy, for a typical-ish petrol car.

Seems pretty reasonable. Thanks for the conversions, I realized I should have done one as I hit send...

maizefolk

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Re: Anti-Mustachian laws
« Reply #9 on: November 21, 2020, 07:41:40 AM »
They keep trying to push similar per mile taxes in some US states because "cars are getting too fuel efficient" and I have the same reaction.

If the fuel tax isn't raising enough revenue, and in fairness it is not raising enough revenue at least here in the states, raise the tax. And I say this as someone who drives a gasoline powered car that gets under 30 miles to the gallon and will likely buy one more (used) gasoline powered car before I'm in a position to make the switch to electric.

But having the state and federal governments make tax expenditures on one side to encourage people to buy electric cars, mandating that automakers meet increasing miles per gallon standards for their gasoline powered fleets, and then turn around and introduce special new taxes because all your efforts to reduce the consumption of gasoline have just stated to succeed in reducing the consumption of gasoline seem wasteful and counterproductive.

Malcat

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Re: Anti-Mustachian laws
« Reply #10 on: November 21, 2020, 07:48:07 AM »
They keep trying to push similar per mile taxes in some US states because "cars are getting too fuel efficient" and I have the same reaction.

If the fuel tax isn't raising enough revenue, and in fairness it is not raising enough revenue at least here in the states, raise the tax. And I say this as someone who drives a gasoline powered car that gets under 30 miles to the gallon and will likely buy one more (used) gasoline powered car before I'm in a position to make the switch to electric.

But having the state and federal governments make tax expenditures on one side to encourage people to buy electric cars, mandating that automakers meet increasing miles per gallon standards for their gasoline powered fleets, and then turn around and introduce special new taxes because all your efforts to reduce the consumption of gasoline have just stated to succeed in reducing the consumption of gasoline seem wasteful and counterproductive.

It is, however, such an exquisite demonstration of how complex policy changes can get, because it's often one body making the pro-change policy and then another body making the reactive policy adjustment to the fallout of that change.

There's this illusion that a government acts as a unified decision making force, but that's not even remotely accurate.

GuitarStv

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Re: Anti-Mustachian laws
« Reply #11 on: November 21, 2020, 07:57:27 AM »
Itís a road tax. Youíre using the roads.

If it were a road tax then it should be levied on bicyclists and ICE car drivers as well. After all, they use roads too.

The most sensible way to tax vehicles is by weight.  Weight largely determines damage done to the road, and thus the cost of maintenance.

Electric vehicles have similar weight to ICE ones, don't they?  It would seem to make sense that if ICE vehicles are paying a fuel tax a similar tax should be levied upon electric ones.

Malcat

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Re: Anti-Mustachian laws
« Reply #12 on: November 21, 2020, 07:59:29 AM »
Itís a road tax. Youíre using the roads.

If it were a road tax then it should be levied on bicyclists and ICE car drivers as well. After all, they use roads too.

The most sensible way to tax vehicles is by weight.  Weight largely determines damage done to the road, and thus the cost of maintenance.

Electric vehicles have similar weight to ICE ones, don't they?  It would seem to make sense that if ICE vehicles are paying a fuel tax a similar tax should be levied upon electric ones.

Neat concept.

FINate

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Re: Anti-Mustachian laws
« Reply #13 on: November 21, 2020, 07:59:53 AM »
Itís a road tax. Youíre using the roads.

If it were a road tax then it should be levied on bicyclists and ICE car drivers as well. After all, they use roads too.

BEVs are heavier than ICE vehicles, contributing more to wear-and-tear on the roads and equally to congestion. Whereas bikes contribute nothing to wear-and-tear and congestion. Bikes are the ultimate Mustachian vehicles.

Gas taxes were designed as a proxy for motor vehicle miles travelled that happens to also disincentivize poor fuel economy as an added benefit. There were never primarily about sin-taxes, so analogies to smoking fall flat. If we want to encourage people to purchase BEVs then this should be done up-front at the point of sale with government rebates (ideally targeted to middle and lower income buyers) rather than an exemption from road taxes in perpetuity.

Tempname23

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Re: Anti-Mustachian laws
« Reply #14 on: November 21, 2020, 08:03:50 AM »
Although there are sometimes extra lanes made for bikes, shouldn't bikes fund the extra lanes, even if they don't wear it out?

Bloop Bloop Reloaded

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Re: Anti-Mustachian laws
« Reply #15 on: November 21, 2020, 08:06:19 AM »
Itís a road tax. Youíre using the roads.

If it were a road tax then it should be levied on bicyclists and ICE car drivers as well. After all, they use roads too.

The most sensible way to tax vehicles is by weight.  Weight largely determines damage done to the road, and thus the cost of maintenance.

Electric vehicles have similar weight to ICE ones, don't they?  It would seem to make sense that if ICE vehicles are paying a fuel tax a similar tax should be levied upon electric ones.

Weight x distance travelled would be fair as a "road tax".

However, for environmental purposes I would also suggest a fuel levy as a sin tax. Otherwise, my light sports car which achieves pretty terrible mileage will be taxed less than every EV on the market. And that's not really fair.


maizefolk

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Re: Anti-Mustachian laws
« Reply #16 on: November 21, 2020, 08:09:31 AM »
The most sensible way to tax vehicles is by weight.  Weight largely determines damage done to the road, and thus the cost of maintenance.

Electric vehicles have similar weight to ICE ones, don't they?  It would seem to make sense that if ICE vehicles are paying a fuel tax a similar tax should be levied upon electric ones.

The damage done to the road with added weight is extremely nonlinear.  My understanding is damage is proportional to weight per axle raised to the fourth power (weight/number of axles)4. If we want to move to a system that taxes vehicles for road maintenance based on the damage done to the road, I'm all for that.

It would mean the vast majority of the costs of maintaining roads would be paid by eighteen wheeler semi trucks. At least directly. We'd pay most of the increased costs ourselves indirectly through higher costs for groceries and other physical goods. But that would A) discourage consumption and B) encourage the adoption of more efficient modes of transportation like trains so it'd still be a Mustachian change from the present system of funding road repairs.

BussoV6

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Re: Anti-Mustachian laws
« Reply #17 on: November 21, 2020, 08:16:54 AM »
Bloop, how are they monitoring the distance traveled by the EV?

alcon835

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Re: Anti-Mustachian laws
« Reply #18 on: November 21, 2020, 08:30:38 AM »
This seems like something that will change once the world figures out how to better tax electiric vehicles. Gas was easy for the government to tax because gas stations are the middle man. Government raises gas taxes and everyone gets angry at Chevron.

I doubt a direct tax is something that will work out long term. But who knows! Maybe I'm wrong.

scottish

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Re: Anti-Mustachian laws
« Reply #19 on: November 21, 2020, 10:25:09 AM »
Itís a road tax. Youíre using the roads.

If it were a road tax then it should be levied on bicyclists and ICE car drivers as well. After all, they use roads too.

The most sensible way to tax vehicles is by weight.  Weight largely determines damage done to the road, and thus the cost of maintenance.

Electric vehicles have similar weight to ICE ones, don't they?  It would seem to make sense that if ICE vehicles are paying a fuel tax a similar tax should be levied upon electric ones.

That way heavy trucks - which are much harder on roads than passenger vehicles - could start paying their share of the road maintenance costs.    We could even have a non-linear increase similar to income taxes.

Catbert

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Re: Anti-Mustachian laws
« Reply #20 on: November 21, 2020, 10:34:56 AM »
EVs in California now pay additional registration fees based on car value ($25 to $175 extra).  This is every year not just initial registration.  I think California has the largest concentration of EVs in the US.


Cranky

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Re: Anti-Mustachian laws
« Reply #21 on: November 21, 2020, 10:38:54 AM »
Itís a road tax. Youíre using the roads.

If it were a road tax then it should be levied on bicyclists and ICE car drivers as well. After all, they use roads too.

Bicycles donít have much of an impacts on roads, and regular cars DO pay a road tax in the form of registration fees and gas tax. So in Ohio electric vehicles are being charged an extra registration fee to make up for paying less gas tax. Soooooo much whining about that!

But in my area, the electricity is being generated by fossil fuel burning power plants, so the pollution is just at a different point. I donít see any special reason to pat yourself too hard on the back over buying an electric vehicle.

I donít drive, and my local roads are terrible, so Iím not terribly invested in this either way. LOL

PDXTabs

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Re: Anti-Mustachian laws
« Reply #22 on: November 21, 2020, 10:45:49 AM »
Itís a road tax. Youíre using the roads.

If it were a road tax then it should be levied on bicyclists and ICE car drivers as well. After all, they use roads too.

Does the ICE car drivers pay a fuel tax?

GuitarStv

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Re: Anti-Mustachian laws
« Reply #23 on: November 21, 2020, 01:26:50 PM »
The most sensible way to tax vehicles is by weight.  Weight largely determines damage done to the road, and thus the cost of maintenance.

Electric vehicles have similar weight to ICE ones, don't they?  It would seem to make sense that if ICE vehicles are paying a fuel tax a similar tax should be levied upon electric ones.

The damage done to the road with added weight is extremely nonlinear.  My understanding is damage is proportional to weight per axle raised to the fourth power (weight/number of axles)4. If we want to move to a system that taxes vehicles for road maintenance based on the damage done to the road, I'm all for that.

It would mean the vast majority of the costs of maintaining roads would be paid by eighteen wheeler semi trucks. At least directly. We'd pay most of the increased costs ourselves indirectly through higher costs for groceries and other physical goods. But that would A) discourage consumption and B) encourage the adoption of more efficient modes of transportation like trains so it'd still be a Mustachian change from the present system of funding road repairs.

Yeah, I'm totally fine with that too.  No down side.

Zikoris

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Re: Anti-Mustachian laws
« Reply #24 on: November 21, 2020, 02:33:32 PM »
Without a doubt, ridiculous zoning laws that prevent the building of sensible types of housing and drive the cost up for everyone. Also, laws regarding the number of unrelated people who can live in one house. And any laws against tiny homes. Laws that prevent people from gardening in their own yard. Minimum parking requirements leading to sprawl and increased building costs, especially when in an area where most people don't even have cars.

So, so much bullshit.

FINate

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Re: Anti-Mustachian laws
« Reply #25 on: November 21, 2020, 02:41:15 PM »
Without a doubt, ridiculous zoning laws that prevent the building of sensible types of housing and drive the cost up for everyone. Also, laws regarding the number of unrelated people who can live in one house. And any laws against tiny homes. Laws that prevent people from gardening in their own yard. Minimum parking requirements leading to sprawl and increased building costs, especially when in an area where most people don't even have cars.

So, so much bullshit.

+1

People should be in the streets protesting these things, especially those struggling the most to afford the cities. And yet we keep re-electing the same folks to office with the same failed policies.

seattlecyclone

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Re: Anti-Mustachian laws
« Reply #26 on: November 21, 2020, 02:46:06 PM »
The most sensible way to tax vehicles is by weight.  Weight largely determines damage done to the road, and thus the cost of maintenance.

Electric vehicles have similar weight to ICE ones, don't they?  It would seem to make sense that if ICE vehicles are paying a fuel tax a similar tax should be levied upon electric ones.

The damage done to the road with added weight is extremely nonlinear.  My understanding is damage is proportional to weight per axle raised to the fourth power (weight/number of axles)4. If we want to move to a system that taxes vehicles for road maintenance based on the damage done to the road, I'm all for that.

It would mean the vast majority of the costs of maintaining roads would be paid by eighteen wheeler semi trucks. At least directly. We'd pay most of the increased costs ourselves indirectly through higher costs for groceries and other physical goods. But that would A) discourage consumption and B) encourage the adoption of more efficient modes of transportation like trains so it'd still be a Mustachian change from the present system of funding road repairs.

Yeah, I'm totally fine with that too.  No down side.

Sounds great to me. In the past the amount of fuel used was roughly proportional to the weight of the vehicle. It didn't take this weight to the fourth power thing into account, but it did charge bigger vehicles more than smaller ones. Now with the introduction of hybrid and then fully electric vehicles, this relationship between weight and gasoline efficiency has been upended. Some alternate tax on vehicles that aren't paying for road maintenance otherwise does seem fair, and I also agree that introducing such a tax pushes the incentives away from where we should be going from an environmental perspective.

I do like the idea of damage-based taxation. Tax all vehicles based on their axle weight and miles driven. Separately add a carbon tax for gasoline and other fossil fuels that covers the full estimated cost of mitigating all the emissions from burning the fuel. Existing gas taxes don't cover the full cost of road maintenance, and carbon emissions don't factor into it at all. This will undoubtedly make transportation more expensive. That's a good thing.

Without a doubt, ridiculous zoning laws that prevent the building of sensible types of housing and drive the cost up for everyone. Also, laws regarding the number of unrelated people who can live in one house. And any laws against tiny homes. Laws that prevent people from gardening in their own yard. Minimum parking requirements leading to sprawl and increased building costs, especially when in an area where most people don't even have cars.

Yes to all of this.

John Galt incarnate!

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Re: Anti-Mustachian laws
« Reply #27 on: November 21, 2020, 04:02:37 PM »
[quote author=Cranky link=topic=119241.msg2738858#msg2738858

But in my area, the electricity is being generated by fossil fuel burning power plants, so the pollution is just at a different point. I donít see any special reason to pat yourself too hard on the back over buying an electric vehicle.


[/quote]

How many people are oblivious to the fact that the energy of fossil fuel is converted to the electricity they use to charge their EV's battery?


NumberJohnny5

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Re: Anti-Mustachian laws
« Reply #28 on: November 21, 2020, 04:46:33 PM »
How many people are oblivious to the fact that the energy of fossil fuel is converted to the electricity they use to charge their EV's battery?

Even if the electricity production is dirty (i.e coal), the energy production is much more efficient. It's the same reason hybrids are more efficient than a standard gasoline car, even though all the energy it uses is produced by burning gasoline. The engine is able to always (or at least, more often) spin at a more efficient rpm. An electric plant generally does not "idle", it's either full on or full off.

Plus, gasoline will always be dirty. Electricity production can be clean, dirty, or anywhere in between. I can have solar panels installed on my roof if I want. I can't magically change the fact that my gasoline powered vehicle relies on combustion to operate.

marty998

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Re: Anti-Mustachian laws
« Reply #29 on: November 21, 2020, 05:35:47 PM »
Itís a road tax. Youíre using the roads.

If it were a road tax then it should be levied on bicyclists and ICE car drivers as well. After all, they use roads too.

Does the ICE car drivers pay a fuel tax?

Itís an excise charge built into the cost of the petrol at the pump.

You pay $1.21/litre for example, the retailer pays 11c sales tax (GST) to the government, keeps their say 10c gross profit margin, pays $1 to the up the supply chain.

From there the 40c ďfuel taxĒ goes to the government, the remaining 60c goes to paying the trucks that move it all around, the refinery, the ships, and the original oil drillers that got it out of the ground.

Multiply that by tens/hundreds of billions and governments worldwide suddenly have a big problem in funding what they used to with the tax.

Travis

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Re: Anti-Mustachian laws
« Reply #30 on: November 21, 2020, 05:48:56 PM »
The whole system needs to be redone on a clean sheet of paper. In addition to fuel tax receipts dropping from decreased consumption, the tax itself was enacted as a fixed amount years ago. Sometimes decades. Consumption being a non-factor, the receipts haven't kept up with demand or inflation. Any increase gets an outcry because it's a tax and we hate voting ourselves more of those - especially one that hits everybody more or less equally.  The solution has been to simply vote more funding from general purpose taxes which circumvents the whole reason for having the tax in the first place. 

kpd905

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Re: Anti-Mustachian laws
« Reply #31 on: November 22, 2020, 06:48:40 AM »
Sounds like driving a hybrid might be advantageous in these circumstances.  Get 50 mpg, so you pay half the fuel tax of most vehicles.  Avoid the electric vehicle tax.  Then if you have a plug-in hybrid (or DIY conversion) you could possibly do most or all of your commute under battery power.

Buffaloski Boris

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Re: Anti-Mustachian laws
« Reply #32 on: November 22, 2020, 08:02:51 AM »
How about the grand daddy of anti Mustachian laws: Federal income taxes instead of consumption taxes. So what weíre going to do through tax policy is discourage productivity by taxing it versus consumption. Cute. Moreover, by effectively taxing work income at a higher rate than rentier activities we have the intended consequence of minimizing class mobility. Donít want the hoi polloi to be putting on airs I guess.

As the MMT folks have I think demonstrated, the Federal income tax isnít really needed from a revenue perspective but as a brake on inflation.

GuitarStv

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Re: Anti-Mustachian laws
« Reply #33 on: November 22, 2020, 08:41:31 AM »
How about the grand daddy of anti Mustachian laws: Federal income taxes instead of consumption taxes. So what weíre going to do through tax policy is discourage productivity by taxing it versus consumption. Cute. Moreover, by effectively taxing work income at a higher rate than rentier activities we have the intended consequence of minimizing class mobility. Donít want the hoi polloi to be putting on airs I guess.

As the MMT folks have I think demonstrated, the Federal income tax isnít really needed from a revenue perspective but as a brake on inflation.

Switching income tax to consumption tax would disproportionately impact the poorest in society.

If one guy make a million dollars a year and one guy makes 10 grand a year- they both need to pay for food/shelter.  But theguy who makes 10 grand a year is going to be paying a much higher percentage of his total yearly income in 'consumption' taxes just to survive than the rich guy.  This acts as a brake to success, making it harder to better ones self if you're worse off.  That's not the situation we want to create.

I think the idea could work if you made certain items (food, clothes, some level of housing - although this would be tricky) tax exempt to alleviate the inherent unfairness of the concept.

maizefolk

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Re: Anti-Mustachian laws
« Reply #34 on: November 22, 2020, 09:22:49 AM »
Switching income tax to consumption tax would disproportionately impact the poorest in society.

If one guy make a million dollars a year and one guy makes 10 grand a year- they both need to pay for food/shelter.  But theguy who makes 10 grand a year is going to be paying a much higher percentage of his total yearly income in 'consumption' taxes just to survive than the rich guy.  This acts as a brake to success, making it harder to better ones self if you're worse off.  That's not the situation we want to create.

I think the idea could work if you made certain items (food, clothes, some level of housing - although this would be tricky) tax exempt to alleviate the inherent unfairness of the concept.

Rather than going through and trying to figure out which goods the poor should be able to spend their money on tax free and which ones they should not, just provide a refundable credit (funded by part of the tax revenue collected) to every person. For the very poorest, this credit would be even more than they paid in consumption taxes, providing a safety net and reducing income inequality on the low end. For people in the middle of the income distribution it would offset all or some of what they paid in consumption taxes, and for people who spend a lot, it'd be a drop in the bucket of the tax they were paying.

It's possible to produce a very progressive set of outcomes with a flat rate consumption tax and a universal tax credit which is enough to cover the basic needs of a human being for food and shelter.

GuitarStv

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Re: Anti-Mustachian laws
« Reply #35 on: November 22, 2020, 10:50:54 AM »
Switching income tax to consumption tax would disproportionately impact the poorest in society.

If one guy make a million dollars a year and one guy makes 10 grand a year- they both need to pay for food/shelter.  But theguy who makes 10 grand a year is going to be paying a much higher percentage of his total yearly income in 'consumption' taxes just to survive than the rich guy.  This acts as a brake to success, making it harder to better ones self if you're worse off.  That's not the situation we want to create.

I think the idea could work if you made certain items (food, clothes, some level of housing - although this would be tricky) tax exempt to alleviate the inherent unfairness of the concept.

Rather than going through and trying to figure out which goods the poor should be able to spend their money on tax free and which ones they should not, just provide a refundable credit (funded by part of the tax revenue collected) to every person. For the very poorest, this credit would be even more than they paid in consumption taxes, providing a safety net and reducing income inequality on the low end. For people in the middle of the income distribution it would offset all or some of what they paid in consumption taxes, and for people who spend a lot, it'd be a drop in the bucket of the tax they were paying.

It's possible to produce a very progressive set of outcomes with a flat rate consumption tax and a universal tax credit which is enough to cover the basic needs of a human being for food and shelter.

Yep, that's certainly a way of doing it.  As long as the poor can afford to pay taxes all year while waiting for their credit.

Buffaloski Boris

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Re: Anti-Mustachian laws
« Reply #36 on: November 22, 2020, 11:05:26 AM »
Switching income tax to consumption tax would disproportionately impact the poorest in society.

If one guy make a million dollars a year and one guy makes 10 grand a year- they both need to pay for food/shelter.  But theguy who makes 10 grand a year is going to be paying a much higher percentage of his total yearly income in 'consumption' taxes just to survive than the rich guy.  This acts as a brake to success, making it harder to better ones self if you're worse off.  That's not the situation we want to create.

I think the idea could work if you made certain items (food, clothes, some level of housing - although this would be tricky) tax exempt to alleviate the inherent unfairness of the concept.

Rather than going through and trying to figure out which goods the poor should be able to spend their money on tax free and which ones they should not, just provide a refundable credit (funded by part of the tax revenue collected) to every person. For the very poorest, this credit would be even more than they paid in consumption taxes, providing a safety net and reducing income inequality on the low end. For people in the middle of the income distribution it would offset all or some of what they paid in consumption taxes, and for people who spend a lot, it'd be a drop in the bucket of the tax they were paying.

It's possible to produce a very progressive set of outcomes with a flat rate consumption tax and a universal tax credit which is enough to cover the basic needs of a human being for food and shelter.

Iíd take it one step further and just sent everybody a minimum payment every month while at the same time scrapping most of the so-called anti poverty programs that havenít worked and merely perpetuate the power of parts of the elite. I find it interesting and telling that we spend so much effort to determine suitability for people for the various anti poverty (welfare) programs on the individual side of things, yet essentially none on the corporate welfare side of things. As if some single mom is going to make that vastly worse decisions if theyíre handed a pittance than the Captains of Finance will with the billions they receive.

In the end though logic doesnít much shape tax or public policy anyway. Itís all about power.

maizefolk

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Re: Anti-Mustachian laws
« Reply #37 on: November 22, 2020, 11:38:40 AM »
Switching income tax to consumption tax would disproportionately impact the poorest in society.

If one guy make a million dollars a year and one guy makes 10 grand a year- they both need to pay for food/shelter.  But theguy who makes 10 grand a year is going to be paying a much higher percentage of his total yearly income in 'consumption' taxes just to survive than the rich guy.  This acts as a brake to success, making it harder to better ones self if you're worse off.  That's not the situation we want to create.

I think the idea could work if you made certain items (food, clothes, some level of housing - although this would be tricky) tax exempt to alleviate the inherent unfairness of the concept.

Rather than going through and trying to figure out which goods the poor should be able to spend their money on tax free and which ones they should not, just provide a refundable credit (funded by part of the tax revenue collected) to every person. For the very poorest, this credit would be even more than they paid in consumption taxes, providing a safety net and reducing income inequality on the low end. For people in the middle of the income distribution it would offset all or some of what they paid in consumption taxes, and for people who spend a lot, it'd be a drop in the bucket of the tax they were paying.

It's possible to produce a very progressive set of outcomes with a flat rate consumption tax and a universal tax credit which is enough to cover the basic needs of a human being for food and shelter.

Yep, that's certainly a way of doing it.  As long as the poor can afford to pay taxes all year while waiting for their credit.

You are absolutely correct.

Since everyone is receiving the same universal refundable tax credit anyway, enough to cover their basic needs, there is no need to wait until people file their taxes. We could just deposit 1/52 of the tax credit into each person's bank account every week of the year.

Hotstreak

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Re: Anti-Mustachian laws
« Reply #38 on: November 22, 2020, 11:42:05 AM »




How about the grand daddy of anti Mustachian laws: Federal income taxes instead of consumption taxes. So what weíre going to do through tax policy is discourage productivity by taxing it versus consumption. Cute. Moreover, by effectively taxing work income at a higher rate than rentier activities we have the intended consequence of minimizing class mobility. Donít want the hoi polloi to be putting on airs I guess.

As the MMT folks have I think demonstrated, the Federal income tax isnít really needed from a revenue perspective but as a brake on inflation.

Switching income tax to consumption tax would disproportionately impact the poorest in society.

If one guy make a million dollars a year and one guy makes 10 grand a year- they both need to pay for food/shelter.  But theguy who makes 10 grand a year is going to be paying a much higher percentage of his total yearly income in 'consumption' taxes just to survive than the rich guy.  This acts as a brake to success, making it harder to better ones self if you're worse off.  That's not the situation we want to create.

I think the idea could work if you made certain items (food, clothes, some level of housing - although this would be tricky) tax exempt to alleviate the inherent unfairness of the concept.


That's typically how it's done.  The taxes are included in the amount you pay at the point of purchase, and your retailer is responsible for knowing whether something is taxed, and sending the tax money to the government.  Groceries, utilities, etc. are not taxed.  Your rent is not taxed.  You might pay tax for the purchase of certain long.-term assets like a car, but not for others such as a home.  If you want to make a luxury tax law saying the first $400 you spend on a cell phone should not be taxed, but anything over that should, the retailer builds that into their point of sale software.
I agree it would be a great way to tax, which better incentivizes savings.

urbanista

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Re: Anti-Mustachian laws
« Reply #39 on: November 22, 2020, 07:02:16 PM »
My state has just introduced a 2.5c per kilometre tax on Electric Vehicles. That's $10 per 400km (250 miles) travelled.

...

Any examples of anti-MMM laws in your jurisdiction?

It gets worse.

We are building a new house. Our council made us to install mandatory electric vehicle charger in the garage. $1000 wasted as we are about to buy two brand new petrol cars and drive them for 20 years (our previous 2 cars are 23 and 20 years old).

 Then they moan that the house prices are high. Duh.

dignam

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Re: Anti-Mustachian laws
« Reply #40 on: November 25, 2020, 08:07:53 AM »
Itís a road tax. Youíre using the roads.

If it were a road tax then it should be levied on bicyclists and ICE car drivers as well. After all, they use roads too.

The most sensible way to tax vehicles is by weight.  Weight largely determines damage done to the road, and thus the cost of maintenance.

Electric vehicles have similar weight to ICE ones, don't they?  It would seem to make sense that if ICE vehicles are paying a fuel tax a similar tax should be levied upon electric ones.

This, so much this.  If you drive in the salt states (and most parts of Canada I'm sure), you can actually see potholes form as heavier vehicles pass over already-stressed roads from salting/freezing/unfreezing/plowing.

RetiredAt63

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Re: Anti-Mustachian laws
« Reply #41 on: November 25, 2020, 08:19:56 AM »
Itís a road tax. Youíre using the roads.

If it were a road tax then it should be levied on bicyclists and ICE car drivers as well. After all, they use roads too.

The most sensible way to tax vehicles is by weight.  Weight largely determines damage done to the road, and thus the cost of maintenance.

Electric vehicles have similar weight to ICE ones, don't they?  It would seem to make sense that if ICE vehicles are paying a fuel tax a similar tax should be levied upon electric ones.

This, so much this.  If you drive in the salt states (and most parts of Canada I'm sure), you can actually see potholes form as heavier vehicles pass over already-stressed roads from salting/freezing/unfreezing/plowing.

Here there are reduced weight limits during spring thaw to minimise damage.  I've driven on major highways where the right hand lane had 2 depressions that marked where the heavy trucks drive.

sherr

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Re: Anti-Mustachian laws
« Reply #42 on: November 25, 2020, 09:04:52 AM »
Quote from: Cranky link=topic=119241.msg2738858#msg2738858
But in my area, the electricity is being generated by fossil fuel burning power plants, so the pollution is just at a different point. I don’t see any special reason to pat yourself too hard on the back over buying an electric vehicle.

How many people are oblivious to the fact that the energy of fossil fuel is converted to the electricity they use to charge their EV's battery?

This has already been answered, but I just wanted to drive it home a little further.

A medium-largish sized coal plant will burn through $1 Million worth of coal a day. Forget regulation or whatever, the power companies have an enormous incentive to make use of that fuel as efficiently as possible. Even a 1% efficiency improvement will save them $2.6 Million per year per plant. Car manufacturers have nowhere near the same incentive to be fuel efficient, and individual car owners have next to zero incentive to keep their engines in good repair. In a rough approximation, this is why it's so much cheaper to buy electricity for your electric car than it is to buy gas for your gas car, because that's simply the more efficient use of fuel. And by using less fuel, electric cars thereby produce less pollution, even assuming coal power.

Secondly, from an environmental perspective, it is far easier and cheaper to scrub the output of a few large power plants than it is to scrub the output of hundreds of thousands of cars. And just ensuring a full, clean burn (which again, power plants are incentivized to do much better than individual cars, see again fuel costs) goes a long way to reducing certain types of pollutants, like Carbon Monoxide.

Thirdly, a gas car is a gas car forever. An electric car is only as "dirty" as the power source is, which can change. People install solar panels on their house, coal plants get shut down in favor of cheaper wind turbines, etc.

So no it is not simply "pollution at a different point", and no, "they" are not the oblivious ones here.
« Last Edit: November 25, 2020, 09:16:20 AM by sherr »

simonsez

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Re: Anti-Mustachian laws
« Reply #43 on: November 25, 2020, 09:40:24 AM »
Itís a road tax. Youíre using the roads.

If it were a road tax then it should be levied on bicyclists and ICE car drivers as well. After all, they use roads too.

The most sensible way to tax vehicles is by weight.  Weight largely determines damage done to the road, and thus the cost of maintenance.

Electric vehicles have similar weight to ICE ones, don't they?  It would seem to make sense that if ICE vehicles are paying a fuel tax a similar tax should be levied upon electric ones.

This, so much this.  If you drive in the salt states (and most parts of Canada I'm sure), you can actually see potholes form as heavier vehicles pass over already-stressed roads from salting/freezing/unfreezing/plowing.

Here there are reduced weight limits during spring thaw to minimise damage.  I've driven on major highways where the right hand lane had 2 depressions that marked where the heavy trucks drive.
I'm for any policy/tax within reason with an end result that starts to move freight away from heavy trucks tearing up roads, being slow especially on low grade hills and onramps, hard to see around, adding to highway congestion, and overall making driving more dangerous to passenger vehicles, motorcycles, bicycles, and pedestrians.  I'd love if it was more cost-efficient for the logistics side of companies to utilize trains more than they currently do.  Yet every time I see a new distribution center, it's only built next to highways instead of rail (or both rail AND roads).  So it's trucks to other trucks.  I realize large trucks will never go away and don't really want them to entirely but a reduction on highways would sure be nice.

YttriumNitrate

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Re: Anti-Mustachian laws
« Reply #44 on: November 25, 2020, 10:11:51 AM »
Any examples of anti-MMM laws in your jurisdiction?

Mortgage interest being deductible from income taxes. Before the cap and crazy low rates I knew several people who bragged about what a great deduction they're getting from their jumbo-sized McMansion, and one who mentioned the great deduction from their jumbo-sized yacht.
« Last Edit: November 25, 2020, 10:14:59 AM by YttriumNitrate »

Bloop Bloop Reloaded

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Re: Anti-Mustachian laws
« Reply #45 on: November 26, 2020, 01:01:17 AM »
Any examples of anti-MMM laws in your jurisdiction?

Mortgage interest being deductible from income taxes. Before the cap and crazy low rates I knew several people who bragged about what a great deduction they're getting from their jumbo-sized McMansion, and one who mentioned the great deduction from their jumbo-sized yacht.

We can still do this in Australia, which is why it makes sense to use your investment property as a gigantic zero-interest loan from the bank. Unfortunately a lot of the benefits associated with IPs have been diluted (harder now to claim depreciation, and much harder to kick out a shitty tenant - the lease side of things heavily favours renters) but the overall usefulness of deducting mortgage interest is still very high.

I don't see it as anti-MMM though, because buying and paying down a mortgage is about saving, not consuming. There's nothing more MMM than retiring off passive share/rental income. If you can buy up a little neighbourhood and get all of them paying rent to you then that's passive income for life.

habanero

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Re: Anti-Mustachian laws
« Reply #46 on: November 26, 2020, 01:39:06 AM »

BEVs are heavier than ICE vehicles, contributing more to wear-and-tear on the roads

This is a very common misconception. The point is that for personal vehicles, weight doesn't really matter because it's variations over "nothing at all" anyway, and even reducing it to the weight of a bike won't make all that much difference. For all practical purposes wear and tear on roads are caused by heavy vehicles such as trucks, buses etc. Personal cars make close to zero contribution to it

The formulas for calculating wear and tear has a factor for axle load. Its not linear, its not squared, it's not even cubed. Its raised to the power of four. So weight is largely irrelevant until it suddenly explodes. So heavy traffic is pretty much resposible for all wear and tear and personal car almost zero. The general assumption is somehwere in the 98-99% coming from heavy vehicles.

Most people refuse to believe this, but google and ye shalt find. I was very surprised myself, but as EVs are a big thing with heavy subsidies here the same argument was made (EVs are exempt for road taxes) but the various bodies who calculate stuff for roads pointed out that personal vehicles were pretty much irrelevant to wear and tear and a difference in weight of say a few hundred kilos didn't make any practical difference at all. Cogenstion is of course another issue where it doesn't matter if its an EV or an ICE.
« Last Edit: November 26, 2020, 02:57:43 AM by habanero »

Bloop Bloop Reloaded

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Re: Anti-Mustachian laws
« Reply #47 on: November 26, 2020, 03:29:13 AM »
Weight affects brake wear and also strongly affects driving dynamics if you care about that at all.

habanero

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Re: Anti-Mustachian laws
« Reply #48 on: November 26, 2020, 04:10:36 AM »
Weight affects brake wear and also strongly affects driving dynamics if you care about that at all.
With an EV the problem is rather that the brakes must be replaced due to being used way too little, not that they wear out due to higher weight of the car. I almost never use my brake pedal (Tesla @2.5 tonnes weight) as the regenerative breaking is generally sufficient for everything except when I have to make a sudden breaking due to something unforeseen.

In the winter when the roads are salted here I have to make a mental note of actually using the brakes even when not needed to stop them from rusting, plus get some heat into them to evaporate liquid so they don't freeze while parked.

When I swap tires the inside of the rims is almost perfectly clean while on my previous cars they had a lot of dark goo - aka brake dust.
« Last Edit: November 26, 2020, 04:12:13 AM by habanero »

ender

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Re: Anti-Mustachian laws
« Reply #49 on: November 26, 2020, 06:38:24 AM »
What are you defining as "Mustachian" here?