Abolishing Car Taxes

The car tax is the last vestige of an abusive and long ago discarded tax system. It's the old personal property tax - when the tax assessor pawed through your belongings and told you how much you had to pay to keep them. The USA and European Commission are currently calling for significant changes in the way passenger cars are taxed. The intention is to gradually apply the user pays principle to motorized transport. According to DG TAXUD, the envisioned taxation system will ensure a more appropriate internalization of the external costs of private cars - an important principle for which T&E has long been arguing. Taxing the actual use of private cars is an important step towards sustainable transport. But charges on car user ship ought to complement the already existing taxation of car ownership, and not just replace it. A full internalization of all environmental costs of cars must recognize the problems that result from the still growing sum total of cars on national and international roads. Road capacity in many regions has reached its limits - a fact that is most illustratively expressed by the continuous congestions on national highways and trunk roads. Capacity limits are reached as well in almost all urban areas, where evermore space is consumed by car-infrastructure such as parking spaces, car-dealers or car repair-, maintenance- and washing-facilities - not to mention streets themselves. Therefore a taxation system is needed that restricts both private user- and ownership by making sure that road passenger transport pays for its external costs. The positive response with which carmakers have welcomed (and had lobbied for) the abolition of registration taxes illustrates how auto-friendly the proposed legislation eventually may be. This, however, means that transport in general will not become more expensive - but that the sector will just pay differently and still not properly.