OT, or not, Making Michigan more regressive

A while back, there was a post on this board about the states with the most regressive tax regime. Michigan ranked a weak 34th, in those rankings, while Florida ranked #1, the most regressive in the union.

For as long as I can remember, the state has levied a per gallon fuel tax to pay for road maintenance. And, for years, the (L&Ses) underfunded road maintenance. The current Gov has been spending, in excess of the fuel tax collected, to try to bring the dilapidated roads up to snuff, after years of neglect.

As the tax is per gallon, owners of big SUVs have been paying more tax than the owners of econoboxes, that burn gas at little more than half the rate.

So, certain factions, are now embracing a scheme by the “Reason Foundation”. a libertarian think tank, to replace the per gallon fuel tax with a tax per mile the car is driven. Just how the tax is to be levied is indeterminate: everyone required to have a GPS in their car that logs every mile they drive, or pay a mechanic, every year, to verify the mileage on the car. Either way, the drivers of the biggest, most fuel hungry, vehicles, will not be “burdened” by paying more tax than the people who drive econoboxes.

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Yeah, so that’s not intrusive at all. Thanks “libertarian” think tank. Have a cookie and go outside and play.

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Collect both per-gallon AND mileage taxes. And double the per-gallon tax. If they don’t like it, then TRIPLE it. If they don’t like that, then QUADRUPLE it. You get the idea…

The target here is not the econo-boxes. It is EVs. They pay no gas tax at all, and if EVs take off in a big way then state highway programs will be hurting.

DB2

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I’m surprised there hasn’t been a ‘road tax’ for a long time, and now with EV’s, Hybrids, besides ICE rigs, many miles are escaping a use fee to repair, replace roads, this County had a panic a while back, were going to give up on repairs, go to gravel, rather than fixing the potholes… Grants have come through, however, so tons of projects are catching up, somewhat… Still a problem, long term on how to pay the tab…

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For several years now, EV owners in Michigan have been paying an extra high registration fee, to compensate for not paying fuel taxes. So, that is not an issue, in spite of the statements by one person in the report.

In Michigan, registration fees are based on the price of the car. The fee for my VW is $102, because it was not stupid expensive. EV owners pay the fee based on the price of their car when new, plus an extra fee because they don’t pay fuel tax.

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Washington State has an additional fee for EV registration. It is like $300 or something.

from your link:
" * The electric vehicle fee increased from $135 to $140 (for vehicles that weigh 8,000 lbs. or more, the fee increased from $235 to $240)

  • The plug-in hybrid fee increased from $47 to $50 (for vehicles that weigh 8,000 lbs. or more, the fee increased from $117 to $120)"

I drive approximately 14,0000 miles, get approximately 23 mpg,
so use about 600 gallons. Michigan tax per gallon:
" January 1, 2024 and After

  • Gasoline $.30 per gallon
  • Diesel Fuel $.30 per gallon
  • Alternative Fuel (which includes LPG) $.30 per gallon"

so I will pay $180 in gas tax, which is slightly more than the EV’s are paying per your link. So gas users like me are paying gas tax fees that are greater than the EV registration fees, and gas users also have to pay a vehicle registration fee. So the State of Michigan needs to raise the rates on EV registrations to balance out the gas users paying per gallon tax AND vehicle registration tax, and EVs just paying vehicle registration tax.

Have to admit I’m surprised the State is letting this low hanging fruit stay on the tree. The EV lobby must be spreading around some influence in the State legislature.

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In Tennessee an EV registration is $200 per year. A hybrid is $100. An ICE car $35, I think.

The gas tax has always been a rough-justice tax. If you drove a big fat heavy car, presumably you were doing more damage to the highway, but you were also using more gas and therefore paying more tax. Drive an econobox, less damage, and less tax.

Not perfectly distributed, of course, but not such a bad system. Then batteries had to come along and screw it up.

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I’m too tired to go out and look at the registration, but I think it’s close to a $200 registration fee each year.

Not a big deal, I can go buy a plug-in hybrid and capture the tax advantage that they’re getting, lol, but I like having a 4x4 that I can get back in the woods with, and I’m not seeing that in EVs, at least in the price range of what my truck went for.

I drive about 10,000/yr, and the VW’s mileage runs between 26 in short trip winter driving to about 31 on the highway in the summer. Give yourself a tax cut: drive less and drive a more efficient vehicle. :slight_smile:

Steve

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"Give yourself a tax cut: drive less and drive a more efficient vehicle. "

nah, I’m good. Who knows how much longer I can still do this stuff, not going to let a couple of hundred tax $'s slow me down.

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We often talk about the road damage caused by this or that car. The reality is that (making up a number) 99% of the damage is caused by semis and other large vehicles. Comparing the damage caused by 2,3 and 4 ton cars is silly. Here is the proof, in case you are wondering.
In the late 1980s and early 90s a freeway was built in Silicon valley and trucks were banned (mostly due to opposition about noise near residential areas where some cities wanted to block it)

(see Truck ban section in link)

I drove on this 30 year old freeway yesterday and it appears like new. Really. No potholes, no patches, no lumpiness, etc. Seriously, if you drove on it you’d think it was just built or repaved a few years ago. As far as I know this road has had zero serious maintenance other than landscaping and trash cleanup.

Side note…I went to the ribbon cutting opening for this road section and they talked about how the latest tech (with lasers) was used to level the road surface as they built it blah blah.

Notes:

  • Places with severe weather and snow plows do have more repair needs.
  • I also think that every driver should pay some kind of road tax (per gallon or per mile) because we all benefit from small cars and heavy big rigs…but arguing over a few hundred pounds on various small cars or big SUVs makes no sense, IMO.

Mike

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Lets put some numbers on that.

Certain factions like to complain about how heavy EVs are, compared to ICE powered vehicles. I snatched some data off of Edmund’s.

The heaviest Tesla is the Model X, which weighs 5248lbs. Meanwhile, 7 passenger SUVs, that, automakers and their water carriers assure us “everyone wants”? The Ford Explorer weighs 4345lbs. The Grand Cherokee L weighs 4692. The GMC Yukon Denali weighs 5827, The Tesla Model 3 weighs 4030, Model S: 4776 Model Y: 4398,

So, clearly, the haters that complain about EV weight, before driving off in their 7 passenger SUV are either ignorant, or their pockets are full of Big Three and oil company money.

Steve

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