Most all taxes are viewed primarily through one lens, the lens of revenue. How much money will a particular tax raise? Like many other municipal taxes, vehicle tax assessment is based on the ad valorem system, that is to say based on the commercial value of the vehicle. Often looked upon as a type of user tax, taxes assessed against vehicles are often, though not exclusively, used as a source of revenue for roadways and other transportation system features.
What if we thought of taxes in a broader sense? How might we apply them to solve more than revenue problems? Vehicle usage presents several challenges: in addition to congestion, and wear and tear on infrastructure, their usage is a drain on energy resources, and contributes to poor air quality. Are there ways to address more than the repair of roadways through revenue that we can affect by our application of assessment methods?
Tolls are also a type of vehicle user tax. Often, they are assessed based on the axle or wheel count of the vehicle rather than its value. Let’s use the toll model as a basis, but expand upon it. We know that vehicle weight and axle count are the most important factors when it comes to wear on our roadways. But I have yet to uncover any municipality where these attributes are factored into vehicle tax assessment.
Vehicle weight is also an important factor in vehicle fuel economy and fuel economy and efficiency are directly related to air quality, particularly in areas where traffic is heaviest. This is where we begin to enter a paradox. Later model cars are considerably more costly that earlier models, but they are also lighter and more fuel efficient. Americans also on average seem to have a liking for bigger cars. Compared to their European peers who opt for smaller more fuel efficient vehicles.
What if, rather that basing our tax assessment on the value of the vehicle, we base tax assessment on the weight, axle count, and fuel economy rating of the vehicle. These factors are known and published by the manufactures well before a single vehicle of any particular model is ever sold. This would incentivize purchasers to give preference to lighter, more fuel efficient vehicles. By applying an assessment method of this type, not only do we address revenue needs, but preservation of infrastructure; conservation of energy resources; and air quality and public health as well.
We need to open our minds to the problems that tax assessment methods can help us address. And to take a close look at the bases of assessment to be sure that they align with our goals as a society concerned with so much more than filling the next pothole.