Soon, Cars in Denmark Will Only Be Taxed at 100% (2017)(bloomberg.com)
bloomberg.com
Soon, Cars in Denmark Will Only Be Taxed at 100% (2017)
https://www.bloomberg.com/news/articles/2017-08-29/soon-cars-in-denmark-will-only-be-taxed-at-100
133 comments
They're not excessive - they're more in line with true cost of car dependent society. In the US we shower subsidies on car owners. Some examples: using general fund money to build highways, charging low gas taxes that don't cover cost of maintenance of roads, providing free/underpriced parking in every downtown in the US, undercharging for pollution and other negative externalities of driving, requiring minimum amounts of parking in new developments (instead of capping parking quantity or letting developer choose how much to provide), qualifying infrastructure using car centric metrics like Level-of-Service, federal gov't providing automatic 10-to-1 match for highway projects but 1-to-1 (in good cases) for transit projects to name a few
> using general fund money to build highways
You're forgetting about trucks (and other service vehicles), and though trains are better, you can't have trains everywhere
> providing free/underpriced parking in every downtown in the US
Downtown is predominantly paid parking, and not underpriced either
You're forgetting about trucks (and other service vehicles), and though trains are better, you can't have trains everywhere
> providing free/underpriced parking in every downtown in the US
Downtown is predominantly paid parking, and not underpriced either
Many highways could have fewer lanes if there weren't so many commuters taking space away from trucks, etc.
> Downtown is predominantly paid parking, and not underpriced either
Yes but the vast majority of American cars don't park in downtown.
Yes but the vast majority of American cars don't park in downtown.
The message he was replying to included this:
> underpriced parking in every downtown
> underpriced parking in every downtown
>They're not excessive - they're more in line with true cost of car dependent society.
How did you come by that result? Assuming it wasn't from a magic hat, could you enlighten us a bit?
Bear in mind, that drivers pay much, much more tax for their fuel in Denmark, too, compared to the U.S. Fuel taxes are a major part of many European countries tax income.
How did you come by that result? Assuming it wasn't from a magic hat, could you enlighten us a bit?
Bear in mind, that drivers pay much, much more tax for their fuel in Denmark, too, compared to the U.S. Fuel taxes are a major part of many European countries tax income.
I think you should be supporting taxing car usage, not car ownership. 500% gasoline tax instead of 100% car tax.
Aside from the question of fairness, it has driven Copenhagen to have more bicycles than cars on the streets, and massive improvements to bicycle-friendliness of streets to accommodate this. It's surely an improvement from a congestion, pollution and population health/fitness standpoint.
Source: https://www.theguardian.com/cities/2016/nov/30/cycling-revol...
Source: https://www.theguardian.com/cities/2016/nov/30/cycling-revol...
dane here: this tax is infuriatingly unfair; the fact is that most politicians in Denmark live in Copenhagen where it might be practical to rely on bicycles and public transport but for the mainland this is a fantasy. There is no usuable public transport and bicyling isn't practical beyond 10 km. The people this hurt aren't living in Copenhagen.
>I'm assuming most normal people are unable to afford a car then
They can actually. A new "normal" car would probably range between 60,000-150,000 DKK ($9,600-$24,000), but you could easily get an old used car for around 13,000-20,000 DKK ($2,000-$3,200).
Now don't get me wrong, I certainly am not happy with the fact that we have to pay that much extra, but it is not a problem unless you want a really fancy car. For what it is worth, Danish salaries are quite competitive for normally low paying jobs. Take for example flipping burgers at McDonald's full time, would be around $19/hour, around $2,700/month (before tax[0]). Or when I was younger I worked at a gas station night shift for around $3,500/month.
>The same applies to alcohol etc. Let people be free to decide and do what they want to do.
Heh, funny you should bring that one up—Denmark is waaaay more lax with alcohol than the US, and even its neighbour countries, Norway and Sweden.
[0] Tax calculation would go roughly (all in DKK):
- 17,000 (salary) - 5,400 (tax-free) = 11,600 (taxable)
- 11,600 - (11,600 * 0.38 (normal tax)) = 7,192 (after normal tax)
- 7,192 - (7,192 * 0.08 ("work" tax)) = 6,616 (after ~all taxes)
- 6,616 + 5,400 (the tax free) = 12,016 (final payed out salary)
EDIT: As an addendum I should probably add that the public transportation system works really well in Denmark, and if you live in the city, you don't need a car, you'd either go by train/metro/bus or bike.
They can actually. A new "normal" car would probably range between 60,000-150,000 DKK ($9,600-$24,000), but you could easily get an old used car for around 13,000-20,000 DKK ($2,000-$3,200).
Now don't get me wrong, I certainly am not happy with the fact that we have to pay that much extra, but it is not a problem unless you want a really fancy car. For what it is worth, Danish salaries are quite competitive for normally low paying jobs. Take for example flipping burgers at McDonald's full time, would be around $19/hour, around $2,700/month (before tax[0]). Or when I was younger I worked at a gas station night shift for around $3,500/month.
>The same applies to alcohol etc. Let people be free to decide and do what they want to do.
Heh, funny you should bring that one up—Denmark is waaaay more lax with alcohol than the US, and even its neighbour countries, Norway and Sweden.
[0] Tax calculation would go roughly (all in DKK):
- 17,000 (salary) - 5,400 (tax-free) = 11,600 (taxable)
- 11,600 - (11,600 * 0.38 (normal tax)) = 7,192 (after normal tax)
- 7,192 - (7,192 * 0.08 ("work" tax)) = 6,616 (after ~all taxes)
- 6,616 + 5,400 (the tax free) = 12,016 (final payed out salary)
EDIT: As an addendum I should probably add that the public transportation system works really well in Denmark, and if you live in the city, you don't need a car, you'd either go by train/metro/bus or bike.
"Really well" in the big cities only. Outside the top ten, it's useless. I've lived in a handful of cities in Denmark for about 20 years and this view of public transport is a
typical eastern bias.
> I've lived in a handful of cities in Denmark for about 20 years and this view of public transport is a typical eastern bias
I'm not sure what you mean by eastern bias? I've lived in Denmark for 24 years, and South Korea 1 year, along with traveled a lot of the world. Denmark has a top-class transportation system, one that doesn't close around 24:00 (like Japan), and one that is still affordable.
> Outside the top ten, it's useless
Well, if you go below top 10, then you have cities with less than 50k citizens, compared to 1.3 million in Copenhagen, and then 270k in Aarhus (the 2nd biggest city).
I'll agree the transportation doesn't get you everywhere like they do in the bigger cities, but they can still get you around.
I don't think it's fair to expect a whole country to be completely interconnected, and you have like half the population living in the top 10 cities.
I'm not sure what you mean by eastern bias? I've lived in Denmark for 24 years, and South Korea 1 year, along with traveled a lot of the world. Denmark has a top-class transportation system, one that doesn't close around 24:00 (like Japan), and one that is still affordable.
> Outside the top ten, it's useless
Well, if you go below top 10, then you have cities with less than 50k citizens, compared to 1.3 million in Copenhagen, and then 270k in Aarhus (the 2nd biggest city).
I'll agree the transportation doesn't get you everywhere like they do in the bigger cities, but they can still get you around.
I don't think it's fair to expect a whole country to be completely interconnected, and you have like half the population living in the top 10 cities.
So basically just about anyone who doesn't want to spend anything in excess of 30k euros (15k for your average car + 15k on tax) on a car will either get an used car or a new Dacia.
If 180% is excessive, then Singapore begs to disagree: https://www.youtube.com/watch?v=Ki51vh6ihJs
Anyway, I don't think it's a ban. There are literally cars in Singapore :) If you think a regular sedan is worth >$100k (it's normal in Singapore), you can buy it. But make sure you pay for the externalities (traffic, pollution, parking, road-building, ...) that is caused by your choice.
Anyway, I don't think it's a ban. There are literally cars in Singapore :) If you think a regular sedan is worth >$100k (it's normal in Singapore), you can buy it. But make sure you pay for the externalities (traffic, pollution, parking, road-building, ...) that is caused by your choice.
It depends on where you live, but things like infrastructure are almost supposed to be paid for by drivers in the form of fuel excise taxes[0] or paying road tolls. Paying for parking isn't uncommon either. I agree that pollution is something that needs to be addressed, though.
If taxes on cars were to increase for infrastructure, it would feel like the government is double dipping. Not to mention the general benefit in infrastructure for society as a whole. The benefits for economy can't be understated, not to mention the increased taxes you get across the board.
It's actually quite uncommon to see free government-owned parking lots where I live and when you do see it it's usually a loss leader to encourage people to visit local retailers (where the government will make its money back through sales taxes, income taxes, fuel taxes, encouraging jobs so unemployment, etc).
[0] https://en.wikipedia.org/wiki/Fuel_taxes_in_Australia
If taxes on cars were to increase for infrastructure, it would feel like the government is double dipping. Not to mention the general benefit in infrastructure for society as a whole. The benefits for economy can't be understated, not to mention the increased taxes you get across the board.
It's actually quite uncommon to see free government-owned parking lots where I live and when you do see it it's usually a loss leader to encourage people to visit local retailers (where the government will make its money back through sales taxes, income taxes, fuel taxes, encouraging jobs so unemployment, etc).
[0] https://en.wikipedia.org/wiki/Fuel_taxes_in_Australia
Interesting that taxes are tied in that way. Here in the UK (and much of Europe I believe?) all tax goes into a central pot, which is then shared out, to remove the direct relationship.
There are a couple of exceptions like cigarette taxes and I now believe some of the emissions tax all vehicles pay has been ear marked for roads - though I'm not a fan of this (and a cyclist) as it leads to the feeling that car drivers 'own' that road as they 'pay' for it.
There are a couple of exceptions like cigarette taxes and I now believe some of the emissions tax all vehicles pay has been ear marked for roads - though I'm not a fan of this (and a cyclist) as it leads to the feeling that car drivers 'own' that road as they 'pay' for it.
> it would feel like the government is double dipping.
Remember, the side effect of this policy is that car ownership rate becomes really low. I doubt the purpose is to increase revenue. Maybe it's more about minimizing the negative externalities.
Remember, the side effect of this policy is that car ownership rate becomes really low. I doubt the purpose is to increase revenue. Maybe it's more about minimizing the negative externalities.
Singapore is an overbuilt island city, to some greater extent than Hong Kong, not a country with rural areas.
Dane here. Most people can adford a car if they want one. Normalt you get a loan and pay a monthly rate over the lifetime of the car. Most people who don’t need a car however would rather save the money and use public transport or bike around. I bought a car at the inflated prices, an I wouldn’t want them lowered. I do however feel that the lower fees for electric vehicles was a good thing.
Dane here: what's the population where you live? In most of the country (by area), isn't an accurate statement that you don't need a car.
From what I observed during the time I lived in Aalborg was that families with two incomes could easily afford one car and of course for families with kids a car is very much a necessity than a luxury. While recent young graduates and immigrants could not afford a car without burning a big hole in their income.
So pretty similar to here in the UK
Personally I'm sad to see this lowered as I think it set up good incentives.
High taxation in general, plus high car taxation, means that taxes will be allocated towards alternative transportation options. In Denmark this has meant bicycle infrastructure and culture which has been shown to make humans both happier and healthier. Not to mention that older cars means a lighter touch on the earth (heavy metals, fuel, etc).
Taxation is a good way to apply pressure, and I think we often overlook the power that high taxation has for good policy. Instead we get lower taxation and 'let the market decide' which often results in a more wealth inequality and worse pollution among other things.
High taxation in general, plus high car taxation, means that taxes will be allocated towards alternative transportation options. In Denmark this has meant bicycle infrastructure and culture which has been shown to make humans both happier and healthier. Not to mention that older cars means a lighter touch on the earth (heavy metals, fuel, etc).
Taxation is a good way to apply pressure, and I think we often overlook the power that high taxation has for good policy. Instead we get lower taxation and 'let the market decide' which often results in a more wealth inequality and worse pollution among other things.
"Not to mention that older cars means a lighter touch on the earth (heavy metals, fuel, etc)."
??? older cars doesn't mean a lighter touch on earth in relation to fuel, they can generally drive a shorter distance on the same amount of fuel and likely also have worse filters
??? older cars doesn't mean a lighter touch on earth in relation to fuel, they can generally drive a shorter distance on the same amount of fuel and likely also have worse filters
Producing more cars obviously uses resources.
Looking at EPA numbers fuel economy improvements in recent years seems to have been minuscule. From 2007 to 2017 the Corolla went from 31mpg to 30, the Focus went from 27mpg to 28, the Highlander saw zero change at 22mpg.
https://www.fueleconomy.gov/feg/Find.do?action=sbs&id=23549 https://www.fueleconomy.gov/feg/noframes/38152.shtml
https://www.fueleconomy.gov/feg/noframes/22758.shtml https://www.fueleconomy.gov/feg/noframes/38473.shtml
https://www.fueleconomy.gov/feg/noframes/23765.shtml https://www.fueleconomy.gov/feg/noframes/38414.shtml
Looking at EPA numbers fuel economy improvements in recent years seems to have been minuscule. From 2007 to 2017 the Corolla went from 31mpg to 30, the Focus went from 27mpg to 28, the Highlander saw zero change at 22mpg.
https://www.fueleconomy.gov/feg/Find.do?action=sbs&id=23549 https://www.fueleconomy.gov/feg/noframes/38152.shtml
https://www.fueleconomy.gov/feg/noframes/22758.shtml https://www.fueleconomy.gov/feg/noframes/38473.shtml
https://www.fueleconomy.gov/feg/noframes/23765.shtml https://www.fueleconomy.gov/feg/noframes/38414.shtml
Unless it's doing a lot of miles, energy cost of building new car > energy use difference between new and old.
I am a car nut, and I'm happy to live in the US where I can afford fun cars that I would not be able to afford in other places.
However, I also see quite a bit of logic in this. It increases not just the COST of a car, but the value as well. Now your car doesn't depreciate as fast, which makes repairs seem more reasonable. The resale value is higher. People buy more used cars, repair them, and keep them on the road. In the end, the "cost" of just throwing a car on the scrap heap (okay, dismantling and scavanging for parts/melting down metal, etc) is much higher.
There are really some great consequences to this.
However, I also see quite a bit of logic in this. It increases not just the COST of a car, but the value as well. Now your car doesn't depreciate as fast, which makes repairs seem more reasonable. The resale value is higher. People buy more used cars, repair them, and keep them on the road. In the end, the "cost" of just throwing a car on the scrap heap (okay, dismantling and scavanging for parts/melting down metal, etc) is much higher.
There are really some great consequences to this.
It's not really a ban, although it does price out some from the market. Practically anyone who has a steady job could still afford a car (edit: even a new one I mean), although many choose not to, because it's not worth it for them.
Those who buy cars essentially buy cheaper cars for the same prices compared to the neighbouring countries with similar income levels.
Yes, I wouldn't one a tax policy like that, either. Where I live, we still have a car excise tax, although somewhat more reasonable, and I oppose to that too: taxing safety features for instance makes people buy less safe cars on average. In any case, road users pay their fair share in fuel taxes (which are high practically everywhere in Europe), not to mention the recurring car owner's tax. (Some car-opposing people from the U.S. tend not to understand how much taxes car owners pay in Europe, but it really covers all the externalities of providing service for cars, and then some; it's a cash cow for the tax man. Of course, you need to collect taxes somewhere...)
Those who buy cars essentially buy cheaper cars for the same prices compared to the neighbouring countries with similar income levels.
Yes, I wouldn't one a tax policy like that, either. Where I live, we still have a car excise tax, although somewhat more reasonable, and I oppose to that too: taxing safety features for instance makes people buy less safe cars on average. In any case, road users pay their fair share in fuel taxes (which are high practically everywhere in Europe), not to mention the recurring car owner's tax. (Some car-opposing people from the U.S. tend not to understand how much taxes car owners pay in Europe, but it really covers all the externalities of providing service for cars, and then some; it's a cash cow for the tax man. Of course, you need to collect taxes somewhere...)
I obviously don't know where you live, but it sounds crazy to people in the US because in most of the US public transportation an bicycle infrastructure is not where it needs to be to make them viable for daily life. In places where public transportation is better (like say NYC), car ownership is the exception rather than the rule.
The reality is cars have a massive public cost that we all subsidize via various taxes and paying higher prices for goods already. Keeping up roads, traffic signals, parking structures, etc. is very expensive. Higher taxes on vehicles (and/or gas) helps put the cost directly where it belongs.
Obviously instantly going to 100% tax on vehicles in most of the US would be a complete disaster right now because of the above lack of public transportation, etc. but it's not a crazy idea if you give people alternate means to get around and structure your cities so that 1 hour (or longer) commutes via car are not the norm.
The reality is cars have a massive public cost that we all subsidize via various taxes and paying higher prices for goods already. Keeping up roads, traffic signals, parking structures, etc. is very expensive. Higher taxes on vehicles (and/or gas) helps put the cost directly where it belongs.
Obviously instantly going to 100% tax on vehicles in most of the US would be a complete disaster right now because of the above lack of public transportation, etc. but it's not a crazy idea if you give people alternate means to get around and structure your cities so that 1 hour (or longer) commutes via car are not the norm.
> so that 1 hour (or longer) commutes via car are not the norm.
Is this really the norm in the states? Is this just home -> work route or does it include dropping off kids, shopping,...? Genuinly curious...
Is this really the norm in the states? Is this just home -> work route or does it include dropping off kids, shopping,...? Genuinly curious...
I have a 15 minute commute, but I'm atypical. One of the patterns that grew in (as I understand it) the 1940s and 1950s was the tendency to work in the city, but have a home farther out in the suburbs.
Apparently, the average commute time is 25.4 minutes, according to the US Census Bureau (although it gets much higher in some places): https://project.wnyc.org/commute-times-us/embed.html#5.00/42...
Apparently, the average commute time is 25.4 minutes, according to the US Census Bureau (although it gets much higher in some places): https://project.wnyc.org/commute-times-us/embed.html#5.00/42...
It takes me 40 minutes one way to get to/from work, more if the traffic sucks. The US is spread out, not having a car is not an option for a majority of our society (outside of high population density cities).
It is pretty normal in some parts. Not everywhere. But in the Midwest it’s very common for people to live out in the suburbs and have a long freeway drive in to work. I went 45 minutes each way for years.
You aren't considering the context, such as infrastructure costs, environmental costs, etc.
See Chesterton's fence: https://en.wikipedia.org/wiki/G._K._Chesterton#Chesterton's_...
See Chesterton's fence: https://en.wikipedia.org/wiki/G._K._Chesterton#Chesterton's_...
Normal people are definitely able to afford a car. Maybe not a car as nice as if they lived elsewhere, though.
The number of cars per capita may be the lowest in Western Europe but it is not so far from the UK figures, for example: http://ec.europa.eu/eurostat/statistics-explained/index.php/...
The number of cars per capita may be the lowest in Western Europe but it is not so far from the UK figures, for example: http://ec.europa.eu/eurostat/statistics-explained/index.php/...
I don't really see a problem with using taxation as a mechanism to encourage behavior while still allowing a market for it. Alcohol has a lot of negative impacts for society, so making it a luxury is probably a net good. I think the arguments around cars are a little more nuanced, but if a country decides it wants to encourage public transit & walkability, that seems like a fine goal.
For one problem it's a regressive tax, unless they carve out means based exceptions that means it puts transit for some rural people out of reach.
Exactly this. And they didn't compensate, which makes this very biased and unfair.
Many countries are similarly bad, yet still have cars; Singapore and Hong Kong for example, which are otherwise libertarian paradises. They tend to have excellent public transportation, however.
There are also still cars in Denmark (no problem seeing them when I visited Aarhus), just not as many as in the states.
There are also still cars in Denmark (no problem seeing them when I visited Aarhus), just not as many as in the states.
The thing is - 100% tax on cars is libertarian. You charge car owners something closer to the costs they cause to society. Compare that to the USA where we heavily subsidize car ownership.
Government intervening in the market to internalize externalities is not libertarian. At least, not by the definitions used by any self-identified libertarians I've encountered.
The libertarian approach is to privatize recovery of social costs so that instead of government internalizing the aggregated social cost into the transaction, each individual who can demonstrate an unlicensed adverse impact from the transaction has a personal cause of action to recover damages resulting therefrom.
A particularly generous libertarian might recognize a class action as an appropriate mass venue for aggregating such claims.
The libertarian approach is to privatize recovery of social costs so that instead of government internalizing the aggregated social cost into the transaction, each individual who can demonstrate an unlicensed adverse impact from the transaction has a personal cause of action to recover damages resulting therefrom.
A particularly generous libertarian might recognize a class action as an appropriate mass venue for aggregating such claims.
So if I have asthma I can sue all drivers who drove in the area where I grew up and all coal plants operating in the area where I grew up for contributing to the development of my asthma with each one paying a few cents? That sounds insane.
And... we are back to no-true-liberatarian.
In a libertarian utopia governments are not supposed to add taxes to neutralize negative externalities.
In a libertarian utopia governments are not supposed to add taxes to neutralize negative externalities.
I think fuel taxes, market rate parking fees and road/congestion tolling would be more libertarian. If you live in a rural area the impact of your vehicle is much different than if you live in the middle of a dense city.
Also, a $50,000 car does not have double the societal impact as a $25,000 car (which could be larger and less fuel efficient). Progressive taxes aren't a very libertarian construct.
Also, a $50,000 car does not have double the societal impact as a $25,000 car (which could be larger and less fuel efficient). Progressive taxes aren't a very libertarian construct.
> Singapore and Hong Kong for example, which are otherwise libertarian paradises.
Wait, what?
https://en.wikipedia.org/wiki/Human_rights_in_Singapore
https://www.theguardian.com/world/2016/feb/10/hong-kongs-bus...
Wait, what?
https://en.wikipedia.org/wiki/Human_rights_in_Singapore
https://www.theguardian.com/world/2016/feb/10/hong-kongs-bus...
Half of Hong Kong's population lives in public housing, as does 82% of Singapore's population:
https://en.wikipedia.org/wiki/Public_housing_in_Hong_Kong
https://en.wikipedia.org/wiki/Public_housing_in_Singapore
Which probably reflects that people are more willing to be exposed to market fluctuations when their basic necessities are met by the state.
Which probably reflects that people are more willing to be exposed to market fluctuations when their basic necessities are met by the state.
If they didn't do that, everyone who wasn't rich would be forced out of those cities, or would have to live with their parents and not have any kids (in Singapore's case). It has more to do with the unregulated market that public housing was necessary (and in Singapore, it really isn't the public housing you are used to).
"Basic necessities are met by the state" and "most people live in public housing" are pretty antithetical to libertarianism, aren't they?
Economic freedom is very underrated compared freedom of political expression. There are many ways in which Singaporeans are much more free than we are.
Economic freedom (which I'm presuming means "lower taxes"?) isn't much use to you if you're executed for possessing drugs, or indefinitely detained without charge, need a permit to assemble, can't criticize the government, etc.
> if you're executed for possessing drugs, or indefinitely detained without charge, need a permit to assemble, can't criticize the government, etc.
Erm, all those things(+) can, and do, happen in 'free' countries. They're just not officially sanctioned and are reported differently. If you were to look at this objectively (without depending on just the official figures) I'd say per capita, human rights abuse / exploitation is worse in the US than Singapore.
(+) and worse, eg: get executed for being the wrong color at the wrong time and place
Erm, all those things(+) can, and do, happen in 'free' countries. They're just not officially sanctioned and are reported differently. If you were to look at this objectively (without depending on just the official figures) I'd say per capita, human rights abuse / exploitation is worse in the US than Singapore.
(+) and worse, eg: get executed for being the wrong color at the wrong time and place
OK... but I never claimed the US to be a "libertarian paradise", either. Neither the US nor Singapore could be, by any stretch of imagination, accurately deemed "libertarian paradises".
>> libertarian paradises
Probably he/she meant to type authoritarian paradise ;)
Probably he/she meant to type authoritarian paradise ;)
People drive. A lot. It’s just widely accepted that this is what a car costs.
The main problem I see with a high tax is that people might circumvent it (illegal imports etc).
An interesting effect of these high taxes is that you can very “cheaply” subsidize EVs now. It’s lost revenue so it’s still a cost - but it’s easier to swallow and administer.
Just tax them at 10% instead of 100% and a Tesla Model S is immediately competitive with all the boring ICE vehicles. Look at how Tesla is the most sold car in Norway.
The main problem I see with a high tax is that people might circumvent it (illegal imports etc).
An interesting effect of these high taxes is that you can very “cheaply” subsidize EVs now. It’s lost revenue so it’s still a cost - but it’s easier to swallow and administer.
Just tax them at 10% instead of 100% and a Tesla Model S is immediately competitive with all the boring ICE vehicles. Look at how Tesla is the most sold car in Norway.
> People drive. A lot. It’s just widely accepted that this is what a car costs.
I think this is a key difference between Denmark and USA. Here in USA drivers don't think they're being subsidized. A common argument against transit is that each ticket is subsidized.
There's a highway that just opened in Virginia where they increase the toll to the point where traffic flows at 45MPH. The highest toll on day 2 was $40(!!). This gives you an idea of the value of what is typically given away for free.
I think this is a key difference between Denmark and USA. Here in USA drivers don't think they're being subsidized. A common argument against transit is that each ticket is subsidized.
There's a highway that just opened in Virginia where they increase the toll to the point where traffic flows at 45MPH. The highest toll on day 2 was $40(!!). This gives you an idea of the value of what is typically given away for free.
A side note in the article is the collapse of electric vehicle sales in Norway.
'...the current administration had decided to phase out tax breaks on electric cars, citing budget constraints and the desire to level the playing field. That decision was delayed in June amid a dramatic drop in sales of Electrically Chargeable Vehicles (ECVs)'.
ECV sales have relied very heavily on subsidy in most of the western world, it will be interesting to see demand when competing on a level playing field with ICE vehicles
'...the current administration had decided to phase out tax breaks on electric cars, citing budget constraints and the desire to level the playing field. That decision was delayed in June amid a dramatic drop in sales of Electrically Chargeable Vehicles (ECVs)'.
ECV sales have relied very heavily on subsidy in most of the western world, it will be interesting to see demand when competing on a level playing field with ICE vehicles
EVs will sell just fine without subsidy once prices for long-range ones reaches parity with ICEs. I’m willing to pay a premium to drive an EV but perhaps 10% or so, not more. If subsidies are removed too soon, sales (increases) will flatten. A good reason for subsidizing heavily early on is to get critical mass in infrastructure with chargers etc.
Collapse of EV sales in Norway? Quick, someone needs to call Tesla about that..
https://electrek.co/2017/12/19/tesla-breaks-new-records-norw...
https://electrek.co/2017/12/19/tesla-breaks-new-records-norw...
That's paywalled for me. However going by the title, that's old news as the tax was shot down at the end of the year.
https://e24.no/makro-og-politikk/statsbudsjettet-2018/tesla-...
EU may enforce VAT on the cars, time will tell:
https://www.aftenposten.no/norge/politikk/i/nkkxd/Ap-vil-ha-...
We'll see how that goes. Fun fact: Norwegians don't like EU telling them what to do. (I'm a Norwegian, moved to Australia nearly 2 decades ago).
https://e24.no/makro-og-politikk/statsbudsjettet-2018/tesla-...
EU may enforce VAT on the cars, time will tell:
https://www.aftenposten.no/norge/politikk/i/nkkxd/Ap-vil-ha-...
We'll see how that goes. Fun fact: Norwegians don't like EU telling them what to do. (I'm a Norwegian, moved to Australia nearly 2 decades ago).
They re not sure when to reduce the tax but sales have gone down anyway, probably in anticipation of changes
'Norway has been hugely successful in introducing electric cars and aims to sell only zero-emission new vehicles by 2025. But critics argue that their popularity is mostly down to an extremely generous set of subsidies that can cut the price of the most expensive Teslas by about NKr450,000.
When and how to withdraw those subsidies has sparked a huge political debate. Some Norwegian politicians point out that many of the early adopters of electric cars were rich households buying Teslas. Bus drivers in the richest parts of Oslo complain that bus lanes are clogged with electric cars, which are permitted to use them'.
'Norway has been hugely successful in introducing electric cars and aims to sell only zero-emission new vehicles by 2025. But critics argue that their popularity is mostly down to an extremely generous set of subsidies that can cut the price of the most expensive Teslas by about NKr450,000.
When and how to withdraw those subsidies has sparked a huge political debate. Some Norwegian politicians point out that many of the early adopters of electric cars were rich households buying Teslas. Bus drivers in the richest parts of Oslo complain that bus lanes are clogged with electric cars, which are permitted to use them'.
Uhm, it is not exactly subsidies in Norway, but a reduction in a very high tax for EVs, making them comparatively more affordable than ICEs.
Yep. EVs are both exempt of MVA (GST/VAT) tax and registration fee, whereas combustion engines vehicles (CVs?) are most definitely not. Thus EVs are thus cheap or at least affordable by function of contrast.
People can still drive, though. Are you against taxes in general?
People tend to buy cars with loans or with monthly payments
I noticed most of the comments in this thread were about not wanting a high tax rate of 100%. I just want to offer a counterexample where people are all for it: in Costa Rica there is a similar import tax on luxury and technology items and is roughly 50-80% on cars:
http://www.costaricatax.com/import-tax.htm
http://www.costaricatax.com/luxury-tax-cars.htm
One of the main reasons for this is that everyone wants to go to Costa Rica because it's one of the nicest places in the world. So in a very real sense their import tax is a "pay to stay" tax. As Denmark is also one of the nicest places in the world, they do this as well.
Everyone forgets that in the end, the people are the beneficiaries of these taxes by way of government services like free healthcare and education. Eventually benefits will come as universal basic income (UBI) as well.
Now for the opinion part - I find it sad that the United Stated of America no longer has any appreciable tariffs, so in a way doesn't think of itself as a really nice place to go anymore. 40 years of so-called conservative thinking on this (that government of/by/for the people is somehow the enemy) has done a great injustice to our culture and global image as a beacon of democracy. I was born in 77 so just barely remember that it didn't always used to be this way. I fear that young people today are experiencing their cultural worth being stolen and that their feeling of ineffectualness is being amplified by divisive political tactics that will never pan out. Low taxes generally cause these sorts of problems; lower taxes will make them worse. And taxes just got lower, supposedly, even though the US already pays some of the lowest taxes in the industrialized world. The very fact that the US is unlikely to raise taxes appreciably anytime in the foreseeable future does not bode well for our quality of life IMHO.
http://www.costaricatax.com/import-tax.htm
http://www.costaricatax.com/luxury-tax-cars.htm
One of the main reasons for this is that everyone wants to go to Costa Rica because it's one of the nicest places in the world. So in a very real sense their import tax is a "pay to stay" tax. As Denmark is also one of the nicest places in the world, they do this as well.
Everyone forgets that in the end, the people are the beneficiaries of these taxes by way of government services like free healthcare and education. Eventually benefits will come as universal basic income (UBI) as well.
Now for the opinion part - I find it sad that the United Stated of America no longer has any appreciable tariffs, so in a way doesn't think of itself as a really nice place to go anymore. 40 years of so-called conservative thinking on this (that government of/by/for the people is somehow the enemy) has done a great injustice to our culture and global image as a beacon of democracy. I was born in 77 so just barely remember that it didn't always used to be this way. I fear that young people today are experiencing their cultural worth being stolen and that their feeling of ineffectualness is being amplified by divisive political tactics that will never pan out. Low taxes generally cause these sorts of problems; lower taxes will make them worse. And taxes just got lower, supposedly, even though the US already pays some of the lowest taxes in the industrialized world. The very fact that the US is unlikely to raise taxes appreciably anytime in the foreseeable future does not bode well for our quality of life IMHO.
I used to live in Northern Denmark and I have experienced their healthcare first hand and witnessed social welfare which helped my friends and colleagues. And I still do think this is excessive tax not well justified for the following reasons:
1. I would expect a state of the art public transport in the whole country. The rail system connecting different cities in Denmark is pretty dated and slow. Even using diesel engines in some parts. Now I would expect some part of that 180% tax to be invested here. But the fact is people are often forced to drive with car due to poor public transport connectivity in many places.
2. Even electric cars are not exempt from these high taxes anymore. This eliminates the benefit of the doubt that this was for the good of the environment.
3. The high tax for cars has historical roots. Many in Denmark believe it is no longer necessary today to fund the welfare state. https://www.thelocal.dk/20151120/whats-the-deal-with-denmark...
4. These high taxes are also defeating the purpose of keeping the environment clean by creating a huge market for used really old cars which are often the worst polluters. https://mereconomics.com/2016/02/09/on-the-efficiency-of-dan...
5. Opinion: It all boils down to having free health care, free education, really good welfare system and not being able to afford a car. Other European countries like Germany seem to have worked out a model which can make all of them affordable to most people.
I can go on but got bored.
1. I would expect a state of the art public transport in the whole country. The rail system connecting different cities in Denmark is pretty dated and slow. Even using diesel engines in some parts. Now I would expect some part of that 180% tax to be invested here. But the fact is people are often forced to drive with car due to poor public transport connectivity in many places.
2. Even electric cars are not exempt from these high taxes anymore. This eliminates the benefit of the doubt that this was for the good of the environment.
3. The high tax for cars has historical roots. Many in Denmark believe it is no longer necessary today to fund the welfare state. https://www.thelocal.dk/20151120/whats-the-deal-with-denmark...
4. These high taxes are also defeating the purpose of keeping the environment clean by creating a huge market for used really old cars which are often the worst polluters. https://mereconomics.com/2016/02/09/on-the-efficiency-of-dan...
5. Opinion: It all boils down to having free health care, free education, really good welfare system and not being able to afford a car. Other European countries like Germany seem to have worked out a model which can make all of them affordable to most people.
I can go on but got bored.
Car ownership in Denmark is only marginally lower than here in the UK. And not that far behind the rest of Europe. So it obviously doesn't put off those who want a car.
I am not saying people are not buying cars but the 180% or 150% or even 100% tax is not justified. From what I read it is now down to 85% tax which is much better. Dont know about UK my baseline for comparison is Germany (I lived there for 4 years) and I would move back to Germany any day if I can find the same job there. Cost of living, social welfare everything is a good balance between socialism and capitalism there.
Why is it not justified? What you you replace it with, or cut from current government spending. Most Danish on this thread and the few I know have been in support of the tax, which I find interesting.
If it is so critical for the welfare state why is there even a debate about cutting it? Why was it cut down to 85% from 180%? Also historically the taxes weren’t always this high and the welfare system did just fine.
None of the Danes here have given any convincing answer on why they support the higher taxation on car registrations.
None of the Danes here have given any convincing answer on why they support the higher taxation on car registrations.
I'm not saying it is critical, I'm just asking how we best cost the external impact of people owning and running cars.
But as I've said in previous posts on other threads, I'm a boring lefty in favour of high taxation, and I don't expect others to share my bug government viewpoint ;)
> I'm just asking how we best cost the external impact of people owning and running cars.
I am not sure what you mean by "external impact" here. You should clarify that first before I can answer your question. Also I hope you will forgive me for not reading your previous posts on other threads!
I get that you are in favour of high taxation. I am not against taxation either. But the question is how much higher is acceptable? 200% is acceptable for you? 300%? where do you put the upper limit? How do you measure the cost of driving cars on the society and environment? was 180% by the Danish government justified in this regard? What was the rationale behind that? I haven't gotten answer to this question from any Danes here or in Danish news papers or in person after talking to many Danes while working in Denmark for 8 months.
May be it is the whole Scandinavian model to blame. Therefore, I am giving you the example of Germany where taxes on cars are significantly low but at the same time salaries (at least in the tech sector) are comparable to Scandinavia, education is free, healthcare is affordable and cost of living is one of the best in the western world.
I am not sure what you mean by "external impact" here. You should clarify that first before I can answer your question. Also I hope you will forgive me for not reading your previous posts on other threads!
I get that you are in favour of high taxation. I am not against taxation either. But the question is how much higher is acceptable? 200% is acceptable for you? 300%? where do you put the upper limit? How do you measure the cost of driving cars on the society and environment? was 180% by the Danish government justified in this regard? What was the rationale behind that? I haven't gotten answer to this question from any Danes here or in Danish news papers or in person after talking to many Danes while working in Denmark for 8 months.
May be it is the whole Scandinavian model to blame. Therefore, I am giving you the example of Germany where taxes on cars are significantly low but at the same time salaries (at least in the tech sector) are comparable to Scandinavia, education is free, healthcare is affordable and cost of living is one of the best in the western world.
This is an article from this summer. The negotiations ended at a tax rate of 85% for cars priced up to 185.000 DKK about 30.000USD. And 150% tax for the rest.
There are som deductions for safety ratings, mileage etc. but these are now the current taxrates for cars. Beware before the car tax, the cars are subject to 25% sales tax. So expensive cars are +25% + 150%. (it used to be even worse)
There are som deductions for safety ratings, mileage etc. but these are now the current taxrates for cars. Beware before the car tax, the cars are subject to 25% sales tax. So expensive cars are +25% + 150%. (it used to be even worse)
Once you pay that tax at purchase, is there also annual registration fees?
A few of the American states I've lived in have charged annual taxes based on a car's worth (decreasing over time). I hope you don't get nailed every year!
A few of the American states I've lived in have charged annual taxes based on a car's worth (decreasing over time). I hope you don't get nailed every year!
Yeah, there are an annual registration fee as well. Spread over to payments a year. It isn't much though, and it depends on how environmentally friendly your car is. I think the lowest rate is approx 200 USD pr. year.
> Isn't much... $200/yr.
For comparison: California $83/yr. Nevada $33/yr.
For comparison: California $83/yr. Nevada $33/yr.
Nevada isn't exactly $33/year.
When I lived there, even a small economy car, it was well over $400.
It's how many counties pay for schools instead of property tax. It's also why so many Nevadans get mad at the thousands of people from California who move to Nevada and don't register their vehicles, then complain about the schools that they send their kids to but don't pay for.
This web site shows that a two-year-old $25,000 car will cost $406: https://dmvapp.nv.gov/dmv/vr/vr_estimate/vrestimationinput.a...
When I lived there, even a small economy car, it was well over $400.
It's how many counties pay for schools instead of property tax. It's also why so many Nevadans get mad at the thousands of people from California who move to Nevada and don't register their vehicles, then complain about the schools that they send their kids to but don't pay for.
This web site shows that a two-year-old $25,000 car will cost $406: https://dmvapp.nv.gov/dmv/vr/vr_estimate/vrestimationinput.a...
Dealing with people who don't register their cars seems like a problem that should be reasonably solvable, if enough people are pissed off by it.
Authorize police to issue tickets to cars with expired out of state registration. Make the tickets dismissible if you have lived in Nevada less than whatever the grace period is they give for new residents to register and you get the car registered in time. Make it so the dismissal happens automatically upon registration. Provide a way for officers to quickly check to see if a car already has a pending ticket for this so that a given car only gets ticketed once.
There should not be many people who are living in Nevada and driving around Nevada with expired out of state registration and are not trying to cheat. About the only such people that come to mind are people who moved to Nevada near when their registration was going to expire in their old state, so did not renew it, and are still in the grace period for registration in Nevada.
Some of those people will have the slight hassle of receiving one ticket, but since they are not trying to cheat, and therefore are going to register by the deadline anyway they don't have to do anything about it. It will automatically go away when they register.
The above should catch a lot of the cases, especially if police are authorized to pull over people to issue these tickets, as opposed to just allowing them to issue these tickets to parked cars they come across or issue them incidentally during pull overs for other issues.
Of course there might be people who decide to fake it. In many states the indication of current registration is just a sticker with year of expiration on it stuck onto the license plate. It would not take a master forger to make a fake sticker. (Heck, if someone's home state is sufficiently cheaper for registration, they might even not let their home state they have left, and keep registering their car there!).
It would be going too far to try to crack down on non-expired out of state plates directly, because a large number of those are going to be visitors, not residents (especially for a state like Nevada that has a large number of automobile tourists visiting).
To deal with the people who fake it (or keep registering in their old state), they would probably have to limit it to checking only when they pull someone over for some other violation like speeding or drunk driving where they can check ID. Unless the driver has kept a current (or fake current) out of state driver's license matching their out of state plates with them, the jig will be up. Make it so that these people get hit with a very large fine.
Authorize police to issue tickets to cars with expired out of state registration. Make the tickets dismissible if you have lived in Nevada less than whatever the grace period is they give for new residents to register and you get the car registered in time. Make it so the dismissal happens automatically upon registration. Provide a way for officers to quickly check to see if a car already has a pending ticket for this so that a given car only gets ticketed once.
There should not be many people who are living in Nevada and driving around Nevada with expired out of state registration and are not trying to cheat. About the only such people that come to mind are people who moved to Nevada near when their registration was going to expire in their old state, so did not renew it, and are still in the grace period for registration in Nevada.
Some of those people will have the slight hassle of receiving one ticket, but since they are not trying to cheat, and therefore are going to register by the deadline anyway they don't have to do anything about it. It will automatically go away when they register.
The above should catch a lot of the cases, especially if police are authorized to pull over people to issue these tickets, as opposed to just allowing them to issue these tickets to parked cars they come across or issue them incidentally during pull overs for other issues.
Of course there might be people who decide to fake it. In many states the indication of current registration is just a sticker with year of expiration on it stuck onto the license plate. It would not take a master forger to make a fake sticker. (Heck, if someone's home state is sufficiently cheaper for registration, they might even not let their home state they have left, and keep registering their car there!).
It would be going too far to try to crack down on non-expired out of state plates directly, because a large number of those are going to be visitors, not residents (especially for a state like Nevada that has a large number of automobile tourists visiting).
To deal with the people who fake it (or keep registering in their old state), they would probably have to limit it to checking only when they pull someone over for some other violation like speeding or drunk driving where they can check ID. Unless the driver has kept a current (or fake current) out of state driver's license matching their out of state plates with them, the jig will be up. Make it so that these people get hit with a very large fine.
I don't have the exact number with me, but CA was much closer to $200 for my 10 year old car, last year.
More comparison: Seattle $597 a year (just got my bill recently, vast majority pays for transit expansion)
Woah! Seattle and LA are majorly investing in transit. I'm excited to visit as they come online throughout my life!
"Seattle" is not. Three counties—Snohomish, King, and Pierce—are funding Sound Transit via insanely high car tabs (as well as additional property and sales taxes...), even though Pierce County voted against it and Snohomish only slightly for it.
If you've got a $16,000 car (KBB) you'll pay ~$425. For reference: they valued my 18 year old beater Corolla with 300k miles at approximately $1,700. KBB puts my car at $600. Granted, the MVET predates the RTA tax, but 0.3% is manageable. 1.1% is utterly insane.
And it's a 25 year project.
If you've got a $16,000 car (KBB) you'll pay ~$425. For reference: they valued my 18 year old beater Corolla with 300k miles at approximately $1,700. KBB puts my car at $600. Granted, the MVET predates the RTA tax, but 0.3% is manageable. 1.1% is utterly insane.
And it's a 25 year project.
I understand the viewpoint that less cars = better cities. But worse cars? Because this heavily penalizes buying better cars. I understand the need to segment the tax burden by income level, but it seems reasonable to make the maximum tax level so that, e.g. you pay flat €50k in taxes if your car costs more than €50k. You can play even the safety card here: more expensive cars have more advanced automation and safety features, so their use should be encouraged.
> you pay flat €50k in taxes if your car costs more than €50k.
That would be the same as capping income tax: you pay a 20% rate up to $100k of taxes, after that, no incremental taxes.
It's the opposite of progressive, actually taxing rich people less than poor people.
I'd even go and propose that cars over €50k should be taxed at a higher marginal tax rate than lower-priced cars.
That would be the same as capping income tax: you pay a 20% rate up to $100k of taxes, after that, no incremental taxes.
It's the opposite of progressive, actually taxing rich people less than poor people.
I'd even go and propose that cars over €50k should be taxed at a higher marginal tax rate than lower-priced cars.
There's a difference between taxing income and taxing spending.
They are opposites, so the tax rate should also be opposite - the higher the spending the lower the tax.
After all, you want to encourage wealthy people to spend and spread the wealth, not encourage them to hoard it.
They are opposites, so the tax rate should also be opposite - the higher the spending the lower the tax.
After all, you want to encourage wealthy people to spend and spread the wealth, not encourage them to hoard it.
> you want to encourage wealthy people to spend
Not on cars.
Not on cars.
Why not? In what way is a cheaper car socially better than an expensive car?
You don't want cars overall to start with.
And as wealth increases, the negative utility of a 1% increase in price of a certain good decreases for that buyer, requiring higher taxes to have the same disincentive than for lower income buyers.
Also, cars (especially luxury ones) are highly unproductive assets.
And as wealth increases, the negative utility of a 1% increase in price of a certain good decreases for that buyer, requiring higher taxes to have the same disincentive than for lower income buyers.
Also, cars (especially luxury ones) are highly unproductive assets.
> You don't want cars overall to start with.
So you punish those who have/want one? Ouch, I wouldn't want to live in your world.
Work the other side, make people want to not have one. Making people's life miserable is not a good way to manage your citizens.
> And as wealth increases ... lower income buyers.
Except that the wealthy person just buys a cheaper car. They still have a car, and you have not accomplished your goal.
Your mistake is you taxed spending, without even checking income.
Your scheme does not make people not get a car, it causes people to get a cheaper car, that's all.
So you punish those who have/want one? Ouch, I wouldn't want to live in your world.
Work the other side, make people want to not have one. Making people's life miserable is not a good way to manage your citizens.
> And as wealth increases ... lower income buyers.
Except that the wealthy person just buys a cheaper car. They still have a car, and you have not accomplished your goal.
Your mistake is you taxed spending, without even checking income.
Your scheme does not make people not get a car, it causes people to get a cheaper car, that's all.
> So you punish those who have/want one? Ouch, I wouldn't want to live in your world.
No. Cars have negative externalities to society, so you tax them to account for those externalities.
This is the same reason why governments subsidize infrastructure and education, as those generate positive externalities to society, and most of the value generated is in those externalities, you need a negative tax on those items to incentivize them.
Or the same reason why governments subsidize electric cars.
> Except that the wealthy person just buys a cheaper car. They still have a car, and you have not accomplished your goal.
Sure, but you're providing the same economic disincentive as you are for a poor person (in relative utility), which is a fairer way to do it.
> Your mistake is you taxed spending, without even checking income.
You don't seem to understand the concept of positive and negative externalities.
I'm not proposing to tax spending, I'm proposing to tax a good so that its price accurately reflects the negative impact on society it causes.
No. Cars have negative externalities to society, so you tax them to account for those externalities.
This is the same reason why governments subsidize infrastructure and education, as those generate positive externalities to society, and most of the value generated is in those externalities, you need a negative tax on those items to incentivize them.
Or the same reason why governments subsidize electric cars.
> Except that the wealthy person just buys a cheaper car. They still have a car, and you have not accomplished your goal.
Sure, but you're providing the same economic disincentive as you are for a poor person (in relative utility), which is a fairer way to do it.
> Your mistake is you taxed spending, without even checking income.
You don't seem to understand the concept of positive and negative externalities.
I'm not proposing to tax spending, I'm proposing to tax a good so that its price accurately reflects the negative impact on society it causes.
> I'd even go and propose that cars over €50k should be taxed at a higher marginal tax rate than lower-priced cars.
> I'm not proposing to tax spending, I'm proposing to tax a good so that its price accurately reflects the negative impact on society it causes.
It seems like you're proposing taxing based on the price of the good, not the cost of the negative externalities. It would make more sense to tax based on some combination of the car's weight, footprint, engine size, fuel efficiency, and emissions metrics, based on use of the vehicle, as well as at purchase time.
A vehicle that's a luxury item, but otherwise comparable in relevant statistics, doesn't necessarily need to be taxed more heavily than a basic version of the same thing.
> I'm not proposing to tax spending, I'm proposing to tax a good so that its price accurately reflects the negative impact on society it causes.
It seems like you're proposing taxing based on the price of the good, not the cost of the negative externalities. It would make more sense to tax based on some combination of the car's weight, footprint, engine size, fuel efficiency, and emissions metrics, based on use of the vehicle, as well as at purchase time.
A vehicle that's a luxury item, but otherwise comparable in relevant statistics, doesn't necessarily need to be taxed more heavily than a basic version of the same thing.
> It seems like you're proposing taxing based on the price of the good, not the cost of the negative externalities.
Wrong. I'm proposing that to have the same economic incentive on a luxury version of a certain good you need a higher proportional tax to account for the flattening of personal utility curves.
And that's before we get into the fact that luxury vehicles have even higher negative externalities due to increased engine size, lower fuel efficiency, larger size, etc.
Wrong. I'm proposing that to have the same economic incentive on a luxury version of a certain good you need a higher proportional tax to account for the flattening of personal utility curves.
And that's before we get into the fact that luxury vehicles have even higher negative externalities due to increased engine size, lower fuel efficiency, larger size, etc.
> Wrong
Then I think you're being very unclear in what you're saying. The externalities aren't necessarily related to the price of the vehicle.
Then I think you're being very unclear in what you're saying. The externalities aren't necessarily related to the price of the vehicle.
Well, to extract welfare funding from rich people you already have income taxes (maybe even progressive), why exactly does one want to encourage a low-quality lifestyle?
Because expensive cars are luxury goods with negative externalities.
Which externalities does an expensive car have that a cheap one doesn't?
Larger size, larger engine, more natural resources required (and more pollution).
Also, not only you need to account for the negative externalities, but you also need to provide a disincentive for purchase, which then needs to be progressive due to the decreasing marginal personal utility.
Also, not only you need to account for the negative externalities, but you also need to provide a disincentive for purchase, which then needs to be progressive due to the decreasing marginal personal utility.
Those aren't aspects of just luxury cars...and they're aspects that I covered in my previous post.
> but you also need to provide a disincentive for purchase
You need to pay for the externalities. Beyond that, I disagree that you need to disincentivize the purchase.
> but you also need to provide a disincentive for purchase
You need to pay for the externalities. Beyond that, I disagree that you need to disincentivize the purchase.
> more expensive cars have more advenced automation and safety features, so their use should be encouraged
That would indeed be the long term play, but as most democratically elected governments, they have a 4 year window in which they don't want to be known as "The guys that cut away a ton of welfare, so people could get cheaper cars", since the immediate effect would be a loss of money. Unless of course, people started buying more new cars, but that is speculative, and a gamble that not many of the bigger parties seem willing to make :(
That would indeed be the long term play, but as most democratically elected governments, they have a 4 year window in which they don't want to be known as "The guys that cut away a ton of welfare, so people could get cheaper cars", since the immediate effect would be a loss of money. Unless of course, people started buying more new cars, but that is speculative, and a gamble that not many of the bigger parties seem willing to make :(
Well, compare to the UK. Here we have low taxes on cars and are often incentivised to purchase new ones. This supports car manufacturing, which is a very significant industry for the UK, employing more than 800,000 people. New cars (dieselgate aside) are generally better for the environment too.
But aside from occasional temporary scrapage schemes, there isn't really much incentive to get rid of old ones. This not only results in congested roads but also towns and city streets that are cluttered with parked and often rarely-used vehicles occupying every available space and greatly reducing the "public realm" that could be used for other, healthier and more productive purposes.
So while Denmark's high taxes on new vehicles may not produce the best outcomes for the quality of the vehicle fleet, it does seem to have been effective at reducing the total number of vehicles.
Perhaps, like in Japan, annual registration fees/taxes should start increasing after the vehicle is a certain number of years old, making it expensive to retain ownership of old vehicles.
But aside from occasional temporary scrapage schemes, there isn't really much incentive to get rid of old ones. This not only results in congested roads but also towns and city streets that are cluttered with parked and often rarely-used vehicles occupying every available space and greatly reducing the "public realm" that could be used for other, healthier and more productive purposes.
So while Denmark's high taxes on new vehicles may not produce the best outcomes for the quality of the vehicle fleet, it does seem to have been effective at reducing the total number of vehicles.
Perhaps, like in Japan, annual registration fees/taxes should start increasing after the vehicle is a certain number of years old, making it expensive to retain ownership of old vehicles.
The tax rate of cars in China is similar, and it results in fewer cars, and more people taking public transit. Note: this is also because there is very advanced public transit that can handle high throughput, and only the super-wealthy buy cars, in part to show off.
I like cars and make quite a decent salary, and I still drive a 17 year old Peugeot with 330k miles simply because I am not willing to pay the tax on the kind of car I actually want.
I was quite surprised to click through and read that this is a decrease and not an increase in the tax rate on cars. Which makes me wonder: What about the Danish political climate enabled the original 180% rate to make it into law?
Had to check up on Wikipedia. It was set to 180% in 1977, with no real reason. I'm pretty sure it was meant as temporary.
But yeah the fact that we have no real lobby apart from dealers and the car owners association. That and the fact that quite a lot of people hate cars. Being from the rural parts of Denmark where cars are a nessesity and moving to the second biggest city in the contry was quite a shock to me.
The 180% tax is not that big a mystery to me any more. I don't talk taxes with many of my old dorm friends as they simply can't see the need to lower it. But that is easy to say when they live within biking distance of everything they need.
I still see them. At least when they need a car for moving.
But yeah the fact that we have no real lobby apart from dealers and the car owners association. That and the fact that quite a lot of people hate cars. Being from the rural parts of Denmark where cars are a nessesity and moving to the second biggest city in the contry was quite a shock to me.
The 180% tax is not that big a mystery to me any more. I don't talk taxes with many of my old dorm friends as they simply can't see the need to lower it. But that is easy to say when they live within biking distance of everything they need.
I still see them. At least when they need a car for moving.
Should charge them a moving fee, with a 180% tax on top. :)
The fact that Denmark does not have a car industry has played an important role.
This is a very big reason. Sweden and Germany have auto industry with very strong (politically) unions, ensuring that laws and taxes are beneficial to national industry. Norway and Denmark are very similar to Sweden in many ways, but only Sweden has auto industry and Norway/Denmark have much higher car prices.
I moved to Denmark in 2017.l from south east USA. Writing this message from my hour and half long train+bus commute to work(72 km away from the city of Aarhus,DK). To me. It sucks big time! I can't afford a decent car here. True, I can get a shitty old used car that can breakdown wherever for the cost of a decent car elsewhere in the world. I'd rather save my money and take this long commute.
This is one thing I absolutely hate about Denmark from the bottom of my heart. I might consider moving out of Denmark just because of this as soon as my girlfriend finds a good job opportunity elsewhere.
There are so many good things I see about Denmark. But this one shitty thing trumps all the good for me!
Edit: NO. Used cars are not that much cheap unless you get to the shitty category with a ton of mileage in them.
There are so many good things I see about Denmark. But this one shitty thing trumps all the good for me!
Edit: NO. Used cars are not that much cheap unless you get to the shitty category with a ton of mileage in them.
As someone from a neighboring country to Denmark, this to me is a sign that their system is working.
Eager to hear why you think so?
I'm a young person taking a 1.5 hour train+bus commute because I cannot afford a 45 minute car ride. Why do you think the system is working right?
Or, in your view, what am I doing wrong?
I'm a young person taking a 1.5 hour train+bus commute because I cannot afford a 45 minute car ride. Why do you think the system is working right?
Or, in your view, what am I doing wrong?
TLDR Registration duties of up to 180 percent mean Denmark is one of the most expensive countries in which to buy a new car.
Proposal to lower tax rate to just 100 percent. Currently a Porsche 911 Carrera sports car is $306,600 versus $117,900 in Germany.
"We will still have some of the highest car prices," Economy Minister Simon Emil Ammitzboll told a press conference in Copenhagen on Tuesday. At the same time, it’s "not fair that we, living in one of the wealthiest countries in the world, are driving worse cars than our neighbors in Sweden and Germany."
Proposal to lower tax rate to just 100 percent. Currently a Porsche 911 Carrera sports car is $306,600 versus $117,900 in Germany.
"We will still have some of the highest car prices," Economy Minister Simon Emil Ammitzboll told a press conference in Copenhagen on Tuesday. At the same time, it’s "not fair that we, living in one of the wealthiest countries in the world, are driving worse cars than our neighbors in Sweden and Germany."
Private vehicular taxation is really unjust when done in this way. Not everyone has the same usage patterns.
For example, I commute by bicycle. I would love to have a street legal van, in the eventuality that I want to move something bulky. I would use it once a month at most. Probably less. But I would have to pay thousands of Euros of road taxes just to own a street legal vehicle that is parked in my own garage. Why? Fuel is already taxed a lot to limit usage. Parking permits in cities are expensive to prohibit ownership and congestion. Why am I being taxed, exactly?
BTW, I know this is not a road tax in the article but same nonsense of assuming that ownership is the same as usage.
For example, I commute by bicycle. I would love to have a street legal van, in the eventuality that I want to move something bulky. I would use it once a month at most. Probably less. But I would have to pay thousands of Euros of road taxes just to own a street legal vehicle that is parked in my own garage. Why? Fuel is already taxed a lot to limit usage. Parking permits in cities are expensive to prohibit ownership and congestion. Why am I being taxed, exactly?
BTW, I know this is not a road tax in the article but same nonsense of assuming that ownership is the same as usage.
If you are using a car once a month, shouldn't it be far cheaper, even without taxes, to just rent one?
Some additional information:
The yearly tax on cars are heavily affected by the milage of the car and ranges from $40/y for cars above 75mpg to $5260/y for cars below 12mpg (diesel figures)
As an urban dweller (nyc) who would love to see fewer autos on the road, I view this as a positive development.
But I can't help but wonder if there is an automakers lobby in Denmark. If so, why wouldn't they oppose/ shutdown such a measure?
I can only imagine the insane backlash a similar ruling would have in the US, in spite of the long term benefits to society from having fewer cars.
[edit: should have read the article in full before commenting-- I see now it is about _lowering_ the tax rate]
But I can't help but wonder if there is an automakers lobby in Denmark. If so, why wouldn't they oppose/ shutdown such a measure?
I can only imagine the insane backlash a similar ruling would have in the US, in spite of the long term benefits to society from having fewer cars.
[edit: should have read the article in full before commenting-- I see now it is about _lowering_ the tax rate]
This is the other way around, they are lowering the tax from 180% to 100%.
So I'm sure if there is an automakers lobby, they approve of this.
So I'm sure if there is an automakers lobby, they approve of this.
There are no auto makers in denmark, so likely not much of a lobby (this is Northern Europe, so “lobby” is more likely to mean unions of the manufacturers than lobbyists paid by multinational corporations).
psst, the tax is being lowered from 180% to 100%
I think you have this backwards. They are lowering the tax from 180% to 100%.
The article is about lowering the tax not raising it...
It might not have an insane backlash once public transit is a viable option in more than 5% of the US. Not going to happen any time soon by the looks of it, though.
I just derive some perverted pleasure from seeing Scandinavians hitting themselves in the name of their self-righteousness.
Nationalistic swipes will get you banned here. Please read https://news.ycombinator.com/newsguidelines.html and post civilly and substantively, or not at all.
It's like a ban, without actually having the guts to call it a ban. I'm assuming most normal people are unable to afford a car then.
I'm not a car nut (don't even really like cars, though I do own one and don't use it often) but wouldn't want to live in a country with that line of thinking. The same applies to alcohol etc. Let people be free to decide and do what they want to do.