Electric vehicles (EVs) are commonly touted as a necessary part of America’s green energy future: Shifting from cars powered by gasoline-combustion to cars powered by 100% clean electricity will cut CO2 emissions (and other pollutants) implicated in global warming. Virginia ranks among the states with the lowest EV market share. But on the assumption that EVs eventually will become part of Virginia’s energy future, there’s no time like the present to start thinking about what EV taxation should look like.
Perhaps the most pressing issue is whether to tax EVs the same as conventional cars for the purpose of raising money to pay for the construction and maintenance of roads, highways and bridges. EVs contribute to traffic congestion and cause traffic accidents like any other kind of car. Should their owners not share in the cost of building, maintaining and operating roads?
The rise of EVs, hybrids and high miles-per-gallons vehicles was part of the justification when Virginia overhauled its transportation tax structure during the McDonnell administration. Revenues from the gasoline tax were stagnating, and legislators saw a need to diversify the source of transportation revenues. Once the tax increases were enacted, however, cogitation about the tax structure largely ceased.
Virginia cannot ignore the problem forever. One good place to start thinking about the issue of EVs and road maintenance is a new paper by two University of California professors, Lucas W. Davis and James M. Sallee, “Should Electric Vehicle Drivers Pay a Mileage Tax?” The paper explores the many trade-offs involved. Continue reading