It's the reason why I don't like VED as a 'tax' - it should either be solely as a component of the fuel price
Since we already pay a hefty fuel duty (tax under a different name), VED gives the govt. another route to further tax motorists.
Income tax, NI, VAT, VED, fuel duty, TV license, council tax, CGT, IHT - and few more which I can't remember now.
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VED is not just about raising tax. It also allows the government to understand who owns which cars - essential information for issuing fines for motoring offences and can be integrated with MoT and insurance database.
I don't believe for one moment the government would sacrifice that sort of funtionality.
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<< Since we already pay a hefty fuel duty (tax under a different name), VED gives the govt. another route to further tax motorists. >>
I suspect the reason you object to paying tax on your fuel is that you have no convenient way to avoid it - and that is why the government taxes it. Government has to raise tax somehow, to pay for all the state things we demand, such as NHS, safe railways, more road improvements - you name them.
And many people shout that Govt doesn't spend enough, or that it is frittered away by incompetent bureaucrats. It makes sense to me to collect tax on fuel to pay for the problems created by its use. One problem is that if fuel starts to cost much more than in a neighbouring country, some lucky or devious people begin to exploit that situation.
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And many people shout that Govt doesn't spend enough, or that it is frittered away by incompetent bureaucrats. It makes sense to me to collect tax on fuel to pay for the problems created by its use. One problem is that if fuel starts to cost much more than in a neighbouring country, some lucky or devious people begin to exploit that situation.
.e.g Northern Ireland/RoI
Including people using red diesel.
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I suspect the reason you object to paying tax on your fuel is that you have no convenient way to avoid it
Why is it airlines pay 0% in fuel duty or VAT?
Fly 10,0500 miles to Australia and pay nothing.
Why should I be paying for someone else's pollution?
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I suspect the reason you object to paying tax on your fuel is that you have no convenient way to avoid it
Why is it airlines pay 0% in fuel duty or VAT?
Fly 10,0500 miles to Australia and pay nothing.
Why should I be paying for someone else's pollution?
Your not paying for someone else's pollution...they aren't paying and neither are you.
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I suspect the reason you object to paying tax on your fuel is that you have no convenient way to avoid it
There is a very easy way to avoid paying (much) tax on the 'fuel' for a car. It involves buying an electric car. The only tax paid on the electricity used to run those is 5% VAT, as opposed to the approx 200% tax paid on petrol or diesel.
I doubt that situation will last particularly long though, once EVs become in the majority this effective subsidy on them won't be able to continue as the tax revenue has to come from somewhere. However, it would be pretty difficult to tax the electricity (can't die it red like red diesel!) so there is going to have to be some other means of the government obtaining this money, presumably some kind of pay-per-mile road pricing.
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Trouble is that they still cost a fortune for the average buyer and only break even at around 100k - 150k miles, often more.
Apparently one of the Aussie states is now starting to tax EVs because they don't like not getting that nice juicy tax revenue. Be assuered it'll be coming here soon. So much for it all being to encourage us to go green and save the planet.
Never trust a politician when their mouth is moving.
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So much for it all being to encourage us to go green and save the planet.
Never trust a politician when their mouth is moving.
Seems a silly logic - just because we are being encouraged to 'go green and save the planet' does not mean there won't be any tax on products like it.
Governments need the money from tax to function so if they lose it from one place the slack will need to be taken up elsewhere.
Or what would you suggest?
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So much for it all being to encourage us to go green and save the planet.
Never trust a politician when their mouth is moving.
Seems a silly logic - just because we are being encouraged to 'go green and save the planet' does not mean there won't be any tax on products like it.
Governments need the money from tax to function so if they lose it from one place the slack will need to be taken up elsewhere.
Or what would you suggest?
There are far better ways to generate taxes (reducing them actually raises the tax take, proven by economists), and taxing everything in sight isn't the way. Nor is making tax more complex.
Simplify things to save on collection costs and to give people and businesses less on an incentive to find (legal) loopholes, never mind taking away the need for expensive accountants and lawyers for a good chunk of our society.
Every time governments promise to purge red tape, they end up adding to it, precisely because it gives them more powers and responsibilities.
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<< There are far better ways to generate taxes (reducing them actually raises the tax take, proven by economists), and taxing everything in sight isn't the way. >>
That's a misleading statement, Andy - you left out one word: 'can'. As with the power curve of an engine, there may be a sweet spot where tax-take can be maximised. But it's hard to identify, and I doubt that it is in a fixed place. Economic circumstances continually change, and with them tax demands.
And I don't think the words 'proven' and 'economists' belong together. Economics is the study of human nature, not the science some people believe it to be.
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<< There are far better ways to generate taxes (reducing them actually raises the tax take, proven by economists), and taxing everything in sight isn't the way. >>
That's a misleading statement, Andy - you left out one word: 'can'. As with the power curve of an engine, there may be a sweet spot where tax-take can be maximised. But it's hard to identify, and I doubt that it is in a fixed place. Economic circumstances continually change, and with them tax demands.
And I don't think the words 'proven' and 'economists' belong together. Economics is the study of human nature, not the science some people believe it to be.
In your opinion. And I didn't deliberately leave out 'can'.
You know full well that it was implied that there would be a limit on the tax take overall by reducing them (obviously), but I was referring to what most countries do and comparing when they are generally reduced in level/scope to when the opposite happens.
I think that you're trying to pick nits where they are trivial matters or where arguments have already been settled (or perhaps 'lost' is more appropriate).
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<< In your opinion. And I didn't deliberately leave out 'can'. >>
Must have done it accidentally then :-)
<< I think that you're trying to pick nits where they are trivial matters or where arguments have already been settled (or perhaps 'lost' is more appropriate). >>
Likewise - in Your opinion.
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<< In your opinion. And I didn't deliberately leave out 'can'. >>
Must have done it accidentally then :-)
<< I think that you're trying to pick nits where they are trivial matters or where arguments have already been settled (or perhaps 'lost' is more appropriate). >>
Likewise - in Your opinion.
Nice to see that having a different viewpoint doesn't get one ostracised or have said opinion deleted, isn't it?
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We are taxed heavily on Petrol, beer & cigarettes
In the US petrol, booze & cigarettes are a lot cheaper.
In the UK even a large house might be £3,000 per year council tax.
The equivalent in many states in the US is the annual charge on homes -t's a percentage of the value of your house.
The son in Texas bought a brand new house 18 months ago - the purchase price is then aligned to what the 2019 price would have been in say 2000 - he then pays 3.xx% of the house value. In his as an annual charge case just less than $30K per year. Other areas / states are cheaper / more expensive Anchorage in Alaska is 1.xx%
What would 1.xx or 3.xx % be of your home value?
Harris County, Houston payable the end of February, no instalment plan, if you miss the date there is 33.3% added to the bill and if this is not paid then a charge is made of the deeds of the property i.e. your equity !
2 things guaranteed in life - Death & Taxes
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In the UK even a large house might be £3,000 per year council tax. The equivalent in many states in the US is the annual charge on homes -t's a percentage of the value of your house.
That's how it was here until a decade or two ago. Each house had a Rateable Value which determined the rates a householder paid. The problem was (as you suggest) it was hard to allow for inflation.
Somehow residents should pay for the local services they receive. Socialism has to come in here, because younger folk have different requirements from oldies, etc. etc. No system is fully even-handed; some systems cost more to administer.
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Thread drift alert but don't forget that there is no NHS in the US, so typical health insurance is essential and costs a few hundred dollars a month. I'd rather pay my petrol excise duty than that, despite the flaws! I do agree with the comments above re air travel though, it is the big elephant in the room. Regarding road pricing, yes that's going to be the way forward to raise revenue for sure.
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the NHS isn't free but paid for from national insurance but not as much as your health insurance of course.
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Thread drift? Never known that ;-)
Cambridge has been looking into road pricing for years, when I was studying there in the 90s (not at the old Uni) it was a big thing on the agenda, it was one of my lecturer's areas of specialism (transport economics). It now seems to have been shelved:
www.transportxtra.com/publications/local-transport.../
I expect it will re-surface again in the near future, along with differential pricing for electricity depending on the time of day you charge up your car, which will of course be assisted greatly by the rollout of smart meters...
Edited by Xileno on 11/05/2021 at 12:35
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<< Cambridge has been looking into road pricing for years >>
As road pricing must be managed electronically, I wonder how long it will take for nerds to bypass it ? Apps would soon be available.
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I do agree with the comments above re air travel though, it is the big elephant in the room.
One of Covid's benefits has been the almost complete absence of planes passing overhead (I am not far from Speke airport). Must have done the stratospheric CO2 levels a lot of good. No doubt the great escape will restart soon.
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All taxes raised go into a big pot in the Treasury - personal tax, national nsurance, VAT, petrol duty, inheritance tax etc etc. The only tax collected and passed directly to the spending department is (I think) the BBC licence fee.
Even council tax is just a way of raising money for the goverment. The level of support for local services depends entirely on how central government decide to fund schools, roads, healthcare etc, and the standards they mandate.
Taxes need to be raised to fund necessary public expenditure. How this is done depends on a number of considerations - easy targets (motorists?), low collection costs (PAYE?), social equity (higher rate taxes?), promote behaviour change (subsidies for EVs?) etc.
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I do agree with the comments above re air travel though, it is the big elephant in the room.
One of Covid's benefits has been the almost complete absence of planes passing overhead (I am not far from Speke airport). Must have done the stratospheric CO2 levels a lot of good. No doubt the great escape will restart soon.
Compensated in part by all those extra Amazon and supermaeket deliveries by van to our door. Many planes that normally take passengers have been repurposed to take freight instead.
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As has been said, it’s obvious that there will be some kind of road pricing scheme to recoup lost tax revenue from fuel duty.
What’s the benefit of electric cars? Well I guess road pricing will apply to ICE cars too, therefore those with ICE cars will pay twice - on fuel duty and road pricing.
The government will not need to give further incentives to encourage us to convert.
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The fuel duty will slowly be replaced with an energy duty which electric car drivers will pay. The Govt. will need to recoup the £28bn a year from somewhere.
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The fuel duty will slowly be replaced with an energy duty which electric car drivers will pay. The Govt. will need to recoup the £28bn a year from somewhere.
I don't think it will - I expect the govt to introduce road pricing for all cars but leave fuel duty as a double whammy as an incentive to get rid of petrol/diesel cars.
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The fuel duty will slowly be replaced with an energy duty which electric car drivers will pay. The Govt. will need to recoup the £28bn a year from somewhere.
I don't think it will - I expect the govt to introduce road pricing for all cars but leave fuel duty as a double whammy as an incentive to get rid of petrol/diesel cars.
More likely to use smart meters to tax the electricity used from charging points and home chargers, got to be easier than road charging ?
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The fuel duty will slowly be replaced with an energy duty which electric car drivers will pay. The Govt. will need to recoup the £28bn a year from somewhere.
I don't think it will - I expect the govt to introduce road pricing for all cars but leave fuel duty as a double whammy as an incentive to get rid of petrol/diesel cars.
More likely to use smart meters to tax the electricity used from charging points and home chargers, got to be easier than road charging ?
Domestic energy is low rated for VAT - unless they make all the home chargers already installed obsolete, they'll use low VAT electricity.
Road charging will also act to control/tax congestion which politicians have wanted to do for a long time.
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How clean is a modern engine? Simple facts ignoring the official mpg and emission figures.
Go back to 1989 when I bought a Golf GTi with a 112 PS petrol engine, its kerb weight was 930 kg and it averaged about 33 mpg for the just over 7 years I owned it.
Move on to 2018 when we bought the Fabia with a 110 PS petrol engine. The exterior dims of both cars is virtually the same as is interior space but it kerb weight is about 1250 kg. So far over the 3 years we have owned it has averaged at 49 mpg.
So the simple fact is 2 cars of a similar size and engine power with 40 years between them, the one with the modern engine is managing about 50% better mpg despite its weight penalty. If it burns less petrol its emitting less pollutants especially when you consider the Golf did not have a Cat to restrict the exhaust.
Or lets consider the Caterham. Back in the late 90's it was fitted with a bored out and stroked x-flow (1860cc) on Webers producing about 165 bhp. It averaged about 24 mpg. In 2002 I fitted a 2 litre Zetec engine which is now fuel injected and produces about 175 bhp. Other than the engines the car is still exactly the same, with changes to the manifold it still uses the same exhaust. It averages about 35 mpg now.
Again that is about a 50% improvement but you have to remember that the x-flow needed either 4* leaded or super unleaded, the Zetec is happy on 95 RON.
Clearly the modern engines are far more efficient and cleaner.
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There is no doubt that modern engines with ECUs, turbos, fuel injection, built to finer tolerances etc are more economical than days of yore.
But even todays engines are pretty inefficient. Typically around 30% of the energy content of petrol or diesel is output as mechanical energy. That means 70% is lost as heat - exhaust, radiator, friction, driving ancialliaries (eg: steering, AC) etc.
And to be really picky - the purpose of a car is to transport what's inside it - say 150kg of human beings and luggage. But the total vehicle weight is about 1500kg - so the car as a transport "package" is about 10% efficient.
Overall a car is about 3% fuel efficient at moving its "contents" (30% x 10%). Huge room for improvement!!
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