Replacing the gas tax?

Oregon, of all places, appears to be considering replacing its gas tax with a mileage tax. The problem, it seems, is that as people buy more high-mileage cars, the state is losing tax revenue.

Another way of phrasing this is, the state wants the money you saved by buying a fuel-efficient car. They can’t just raise the gas tax, because then that critical segment of the population still driving Hummers and F350s would get major-league ticked off.

This makes me wonder about other energy tax credits, such as the incentives to go solar. We’re considering replacing our anemic water heater with a solar version. The cost couldn’t possibly be justified if we had to pay retail — over $5000. But with over $2000 in federal and state tax credits, and a savings of, say $400 a year in energy costs, then the premium we’d be paying over a standard water heater doesn’t seem too bad. It’s maybe a $2000 difference, which could be recouped in just 5 years with the energy savings. The remaining 25-year lifespan of the solar heater would be gravy.

But what if everyone got a solar water heater? In North Carolina, our state government would be out over a billion dollars, not to mention the lost energy tax revenue from natural gas and electric. Maybe they’d have to implement a hot water tax to compensate. Then we’d not only have to endure GPS systems in our cars to collect those taxes, but also some kind of state hot water monitoring systems in our homes.

If everyone started using low-voltage lighting, and more energy efficient refrigerators, would we see taxes on those things, too?

In the short term, economic incentives to conserve energy make a lot of sense — but has anyone considered what might happen if these incentives actually worked? We could have an economic disaster on our hands. And no, the answer is not to put a government GPS in my car.

This entry was posted in General. Bookmark the permalink.