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Tax on hybrid vehicles sends the wrong message

Date published: 3/25/2013

The General Assembly has solved the commonwealth's transportation funding woes with new taxes. This is from Del. Orrock's most recent mailer: "a major transportation improvement plan that changes our current funding stream from being based on a per gallon tax to a sales tax approach." While sounding laudable, the details defy logic, send inappropriate messages regarding our consumption, and provide the "camel's nose in the tent" for future taxation.

One component is a $100 annual levy on hybrid vehicle owners. From the handout from Del. Orrock: "Applies a $100 fee on alternative fueled vehicles because those drivers use less fuel and don't pay their fair share in taxes toward transportation." Full disclosure: I own a hybrid.

The statements contradict each other. If we're moving away from a "per gallon tax to a sales tax approach," why add a tax on hybrid owners based upon a "per gallon tax" phil-osophy? Additionally, hybrid owners now would pay both a "per gallon tax" in the form of the levy and increased sales taxes.

Another problem is the application to all hybrids ignoring their actual fuel economy. Consumer Reports, in the April issue, tested 281 vehicles for fuel economy. Fourteen hybrid vehicles ranged from 25 to 44 mpg, with three at 27 mpg and below. Sixty-three of the standard vehicles met or exceeded 27 mpg. Who's not paying their "fair share"? If the desire is to have tax policy based upon gasoline sales at the retail level, the way to do it is to index the annual levy based on the fuel economy ratings of the vehicles.

This tax sends the wrong message regarding our consumptive habits. Do we want tax policies that discourage behaviors we ought to be encouraging? It makes me wonder what's next. Since we've moved to fund transportation based on sales taxes, am I going to be assessed a penalty if I don't upgrade my HDTV annually?

Mark Houghton