Michigan Jumps On The 'Tax Electric Cars' Bandwagon, Too

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Michigan state capitol, Lansing (photo by Brian Charles Watson)

Michigan state capitol, Lansing (photo by Brian Charles Watson)

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Elected officials in yet another state have proposed levying taxes on electric cars. And just to make things interesting, this time the debate is happening in Michigan.

Similar initiatives have been discussed in states both red and blue, including ArizonaOregon, TexasVirginia, and Washington. Why tax hybrids and electric cars? Because they don't use gasoline -- or at least, they use less of it -- meaning that their owners cough up less gas tax revenue for state and federal coffers. And although there aren't nearly enough gas tax dollars to keep America's roads up to snuff, every little bit helps.

Which means, by political logic, that owners of hybrids and electric cars aren't paying their fair share to maintain the roads they use. And so, they should be taxed.


Of course, levying taxes on vehicles puts Republicans like Michigan governor Rick Snyder in a delicate position.

On the one hand, they hate raising taxes at all -- even (or especially) when those taxes reflect changing technology and a changing world. 

On the other hand, there are so many cars on the roads these days, and those roads are in such poor shape, that states have to allot more funds to maintain them. Given the vast sums needed for construction and maintenance, it's impossible to raise those funds simply by cutting other important state programs.

And on a third, disembodied hand, many on the right have publicly ridiculed electric cars -- partially because of machismo, and partially because of the subsidies and tax breaks those vehicles receive. Levying taxes on hybrids and electric cars gives those vehicles importance: it says, "Yes, these cars matter" and forces disdainful legislators to eat some very bitter, lithium-laced crow.

Bottom line: they can't win for losing.


Snyder wants $1 billion to shore up Michigan's roads. To get it, he's surprised some by advocating for higher fuel taxes and vehicle registration fees.

Snyder's plan isn't sitting well with many in his own party, and the prospects of it passing seem dim.

Interestingly, the electric-car tax has been proposed by another Republican, Representative Mike Shirkey. So far, Snyder seems wary of Shirkey's plan, stating, "I’d have to analyze that, but I’d say there’s competing interests on both sides of that question." Translation: "I'm going to have to review some poll numbers before making a decision".

If Shirkey's plan passes, it remains unclear what Michigan's automakers might say -- especially companies like General Motors, which makes the range-extended electric Chevrolet Volt.  

[h/t: Edward Ellyatt]


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Comments (23)
  1. It's an unpopular opinion, but yes, to be fair, raise taxes and registration on all vehicles. If you use the road, it needs to be paid for!

  2. It's a fact that smaller, more efficient cars create less wear and tear on roads.

    Ronald Reagan said it the best: "A gas tax is a user fee". Why don't today's politicians have the balls to do what he did, and raise the gas tax?

    As for electric vehicles, that's a different story, but these are still in their infancy, so any tax revenue would be minimal.

  3. If we are going to "be fair", then gasoline- and diesel-based vehicles need to pay for the costs they impose due to their emissions, both local pollutants (like NOx and PM) and GHGs. If you pollute the air, it needs to be paid for!

  4. why not tax all licensed vehicles based upon Mileage.

  5. the average car puts 16,000 miles on the road, so figure out a tax that averages at that level, and collect it, and, for anyone who is under or over, either pro-rate or let them carry it forward.

  6. Why tax electric cars for not using gas? The current tax-at the-pump is outdated due to so many more fuel options today, vs. 50 years ago. Tax & fees on all vehicles are in of need updating.

    Just think, we have:
    propane, natural gas, compressed natural gas, hydrogen, green-bio fuels, recycled-bio oils, ethanol, grid-electricity, renewable-source electricity (solar, wind, etc), petro, etc.

    Perhaps time to review how we collect tax funds to maintain roads & highway infrastructure. Personally like to see system having a fixed base fee based on vehicle weight + variable fee based on usage (miles). Of note, for context: both travel miles & fuel consumption peaked in 2006 (in US)… so annual gas-tax fees collected have decreased each year since!

  7. Your idea of a weight + miles tax makes too much sense to be viable.

  8. To be fair, long haul trucks cause most road damage and thus are the chief cause of needed repairs. However, we have subsidized that industry for decades through higher than needed taxes on passenger vehicles. So, to be fair, we should raise taxes on trucks and other heavy vehicles. On the other hand, we have never really been fair have we?

  9. On a side note. Does the republican representative expect electric vehicles to become so popular as to significantly affect tax revenues. I believe the GOP believes that electrics are too pricey and to limited to be of much interest to consumers. Not to mention the things could blow up on you. So what gives? Why spend the effort if it will always remain a tiny niche market for the greenies?

  10. @Chris: Here's why ...


  11. Where is the "tea party" when you need them?

  12. I like the logic of everyone paying their fair share. What could be more American? (Never mind, don't answer that.) I drive a Nissan Leaf EV (charged with solar on my roof) and think it is horrible that so many get away without paying for the damage they do. Surely these wise lawmakers would agree that those who burn fossil fuels are not paying their fair share to maintain a viable, healthy atmosphere. They are using our air as a free sewer!
    I’ll be happy to pay reasonable and fair road maintenance fees if all the gas-burners will agree to pay their fair share for clean air. In fact, due to the overwhelming number of gas and diesel vehicles (compared to the minute number of EVs), it seems that a carbon tax should be a much higher priority!

  13. If they add taxes for electrics and hybrids, then I say double the taxes on semi trucks... they break-up the roads.

  14. The fossil fuel and automotive industries are getting desperate in their attempts to slow down, if they can't kill off, electric cars. The problem with EV's is that they are too efficient and vitually maintenance-free, and could last for decades! That does not fit well with the dirty energy and automobile industries' business models. They are really getting desperate to get their paid politicians to levy taxes on the most efficient and reliable class of vehicles on the road.

  15. the automakers don't care, they sell cars, they sellcars.
    it's the fuel companies

  16. They sell cars that will most likely have to be replaced in a decade or so. There is very little that will need to be maintained or replaced in EVs, except for the batteries and tires. No reason why one can't keep an EV inexpensively going for a human lifetime.

  17. If the cost of fuel truly represented its actual cost - ie included the portion of the US' $300b annual defence costs attributable to keeping the oil flowing into the US - fuel prices would be 2 to 3 times higher than they are currently. On the other hand, however it is made, US electricity is nigh-on all locally sourced.

    Whilst at some point I can see validity in the argument that EVs contribute to road wear so they should also contribute to road maintenance, the cost of implementing an EV specific tax and collecting it will currently far outweigh the revenue. Therefore it is a silly and pointless idea and just illustrates how much some politicians are in the pocket of Big Oil.

  18. "Snyder wants $1 billion to shore up Michigan's roads. To get it, he's surprised some by advocating for higher fuel taxes and vehicle registration fees."

    Yes, I agree. Federal gas taxes haven't been raised for some 20 year. It will provide much needed dollars for maintaining our roads and encourage a move to more fuel efficient cleaner vehicles as well as alternative fuel vehicles.

    Also using "local" cleaner alternative fuels such as electricity keeps more dollars recirculating in the U.S. rather than sending dollars overseas. For every $1000-$3000 dollars you spend a year on gasoline about 30 % goes to pay for overseas oil. That's $300-$900/year. Is it better to tax electric vehicles now or encourage the further development?

  19. So don't collect now because there aren't many EVs yet? The solution is meant to be long term and should not be delayed just because there are few EVs now.

    Interesting how politicians are "in the pocket of Big Oil" when some agree with so many here on this page who actually drive EVs or PHEVs. I'm one of them and am fine with a specific tax (still prefer a higher fuel tax rate, but not going to happen), so I guess my Volt and I are also in the pocket of Big Oil?

  20. A weight + miles tax would be the most fair. some states (currently about 17) have a mandatory inspection system that would make mileage checking rather simple.

  21. I agree. I assume those states can verify the odometers? It's very easy to modify an odometer, or at least it used to be long ago. If that's not an issue (and I doubt it really is, but worth asking briefly), then I would agree this is a sensible approach.

  22. In this age of Tweeting and Facebook, why not make make this a "real" use tax, by requiring each vehicle to attach a picture of their odometer when they register their vehicle, thereby giving a (more) accurate indicator of their use of the state's roads. This way, gas and electric vehicles would be taxed on a more even footing.

  23. I'm fine with paying an additional tax for the roads if I'm not contributing via fuel taxes. I still believe the easiest approach is to increase the fuel taxes, but for those asking why politicians don't do this... Are you kidding? Talk about wanting to end one's political career... Yes, I agree, but that's a wildly unpopular idea and it's simply not going to happen with the current political climate.

    Of course, the devil is in the details... How much of a separate tax, for example?

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