Netherlands To Tax Drivers By the Kilometer

[[R_H]]

Wired

The Dutch government wants to abolish ownership and sales taxes on automobiles and instead levy a fee on every kilometer driven. The Transport Ministry says the move will cut congestion in half and curb carbon dioxide emissions by 10 percent.

Motorists driving a typical sedan would pay 3 Euro cents per kilometer, or about 7 U.S. cents per mile, under the law, which if passed would take effect in 2012. The tax would climb to 6.7 Euro cents (16 U.S. cents) in 2018.

“Each vehicle will be equipped with a GPS device that tracks how many kilometres are driven and when and where. This data will be then be sent to a collection agency that will send out the bill,” the ministry said in a statement, according to AFP.

The tax would vary by the type and weight of automobile. Buses, taxis, vehicles owned by the disabled and motorcycles would be exempted.

The Dutch cabinet approved the legislation Friday; it must be passed by Parliament before becoming law. Finance Minister Wouter Bos calls the proposal financially irresponsible. According to Radio Netherlands / Expatia, he fears that national budget could take a big hit because people might be less inclined to drive.

Advocates of the tax say nearly six in 10 drivers will benefit because the tax burden will be shifted to people who drive the most and at peak times. The price of a new car also would decrease significantly, because taxes comprise about 25 percent of the sticker price.

Yahoo News

AMSTERDAM – The Dutch government plans to bring the polluter-pays principle into the home garage.

Rather than an annual road tax for their cars, drivers will soon pay a few cents for every kilometer (mile) on the road, in a plan aimed at breaking chronic traffic jams and cutting carbon emissions, the Cabinet decided Friday.

The GPS monitoring system could be a test case for other countries weighing options for easing crowded roads. Some cities like London have created congestion charges to control traffic in downtown areas, but only Singapore has a similar scheme for charging according to the amount of travel.

When the plan takes effect in 2012, new car prices will drop as much as 25 percent with the abolition of a purchase tax and the road tax, which now totals more than euro600 ($900) per year for a mid-sized car.

Instead, an average passenger car will pay euro0.03 per 1 kilometer ($0.07 per mile), with higher charges levied during rush hour and for traveling on congested roads. Trucks, commercial vehicles and bigger cars emitting more carbon dioxide will be assessed at a higher rate, the Transport Ministry said.

The GPS devices installed in cars will track the time, hour and place each car moves and send the data to a billing agency.

The Netherlands — and especially the coastal area encompassing the cities of Amsterdam, The Hague and Utrecht — has one of the most burdened road networks in Europe, with traffic jams likely at dozens of places virtually throughout the day. Hourly broadcasts report where the traffic is snarled, but often few alternatives exist to escape the highways.

The ministry said the new GPS monitoring system would discourage drivers from clogging the highways during peak hours, and in some cases, from driving at all. It estimated traffic would drop 15 percent and rush-hour congestion would be halved when drivers begin getting regular bills.

With less traffic and perhaps fewer stressed drivers, fatal accidents should fall 7 percent, and carbon emissions from road travel would be cut by 10 percent, the ministry said.

The tax will ratchet up every year until 2018 and could be adjusted if it fails to change traffic patterns.

Opponents were concerned the system will be a heavy burden on business drivers and could cost the government more than euro1 billion ($1.5 billion) a year in tax income.

But the government figured nearly six out of 10 drivers would benefit while tax revenue would remain the same. Public transportation, including taxis, will be exempt.

"The goal is a different manner of paying for mobility that is more fair. Not paying more, but paying differently, with a positive income effect for most households," Traffic Minister Camiel Eurlings said Friday.

The kilometer tax has been debated for 20 years, raising other concerns that it would intrude on privacy.

The ministry said, however, the information collected by GPS would be "legally and technically protected," and the data would not be accessible to the government for other purposes. "The privacy of road users is protected," it said.

I'm surprised they'll abolish the taxes on purchasing and owning a vehicle. Fuel is still taxed, right?

[Fingolfin_Noldor]

Oh wow. Someone actually beat the Singapore Government to the use of GPS to tax the use of roads.

That's quite an achievement.

[Knife]

That's actually a fascinating idea. Granted, I don't see it happening here, though I'd think I'd like it. It is clear to me that not much will stop the car culture and utter sprawl of our urban cities until the death of car culture; not that I think we need to get rid of cars, rather just culture. I could see a progressive tax depending on type of car driven as well, less for small economical cars and a shit ton more for big SUV's.

[White Haven]

So rather than impose a beefy fuel tax, which effectively taxes distance driven while ALSO encouraging fuel-efficient cars, they impose a distance-tax directly. Seems...unwise and redundant.

[The Duchess of Zeon]

The utterly retarded thing is that it would be basically cheaper than the current tax structure on cars in the USA--for big, fat, road-hogging, gas-guzzling SUVs.

7 cents a mile at, say, 20,000 miles of driving in one year is $1,400.00.

Now, $50.00 license and registration fee yearly + 10% sales tax on a vehicle worth $25,000.00, divided over a 10 year average service life is $250.00 a year, and then we have the gas tax, which in Washington State is at 50 cents per gallon. My car gets about 40mpg, so... another $250.00 a year in taxes. So someone with a small and efficient car normally pays $550.00 a year in tax, and would now pay $1,400.00 -- nearly three times as much. Someone with a gas-guzzling Ford Excursion that gets 12 mpg on the highway, however, would have already been paying... Twice as much in initial purchase price tax (50k is a reasonable price for a loaded V-10 Ford Excursion), double the license and registration fee for a large vehicle (trucks cost more to register in Washington), but most importantly the gas tax they pay would go up hugely, from $250.00 a year to $833.33 a year. Add in $500.00 per year equivalent in purchase price sales tax, and $100.00 a year in vehicle license and registration, and this person is paying $1,433.33 a year in taxes already.

Whereas under the Dutch scheme they would pay only $1,400.00 a year in taxes.

So, that's right--this tax literally punishes people driving fuel efficient cars and rewards people driving massive gas-guzzlers.

That is more than sufficient demonstration of how utterly, almost impossibly retarded this policy actually is.

[Bounty]

So, that's right--this tax literally punishes people driving fuel efficient cars and rewards people driving massive gas-guzzlers.

Note that gas a lot more expensive in Europe. Gas guzzlers are a lot less popular here anyway, and fuel efficiency is the main selling point in new vehicles.

[The Duchess of Zeon]

So, that's right--this tax literally punishes people driving fuel efficient cars and rewards people driving massive gas-guzzlers.

Note that gas a lot more expensive in Europe. Gas guzzlers are a lot less popular here anyway, and fuel efficiency is the main selling point in new vehicles.

Yes, but a lot of that expense is taxation, which will be eliminated here, if I understand the article correctly.

[Bounty]

Taxes on ownership and sales will be abolished, not tax on fuel. That will still scale with usage. Also:

The tax would vary by the type and weight of automobile.

[[R_H]]

So rather than impose a beefy fuel tax, which effectively taxes distance driven while ALSO encouraging fuel-efficient cars, they impose a distance-tax directly. Seems...unwise and redundant.

No, the fuel tax is still in place, if I'm not mistaken. The road and purchase tax are replaced by the distance tax (cost per kilometer being dependant on how much the vehicle pollutes). Why not implement tolls where the roads are overburdened and invest more money in public transit. I wonder how hybrid and electric vehicles will be treated under this tax scheme.

[Bounty]

Why not implement tolls where the roads are overburdened and invest more money in public transit.

It basically is a road toll, it just automates payment and spreads the cost.

I wonder how hybrid and electric vehicles will be treated under this tax scheme.

Less or not at all, I'd imagine, as the tax is calculated on carbon emissions.

[The Duchess of Zeon]

Okay, that makes a lot more sense. And I guess that means for a small (subcompact, by American standards) two-door coupe like the one I drive the fuel tax per kilometer might actually be lower than that quoted for a sedan.

[Bounty]

Okay, that makes a lot more sense. And I guess that means for a small (subcompact, by American standards) two-door coupe like the one I drive the fuel tax per kilometer might actually be lower than that quoted for a sedan.

Nono - the fuel tax is added to fuel prices; you just pay more per litre at the pump. This road tax is separate from that.

Basically, in the past the amount of tax at you paid was calculated on the size and economy of your vehicle, and you paid extra tax per litre of fuel used. Now your tax is calculated based on a combination of its efficiency and the number of miles driver, but you still pay the same tax on fuel.

[The Duchess of Zeon]

Nono - the fuel tax is added to fuel prices; you just pay more per litre at the pump. This road tax is separate from that.

Basically, in the past the amount of tax at you paid was calculated on the size and economy of your vehicle, and you paid extra tax per litre of fuel used. Now your tax is calculated based on a combination of its efficiency and the number of miles driver, but you still pay the same tax on fuel.

I meant " tax per kilometre" , that was just a blonde moment. Yeah, I get how it works now, though my point is still the same, I think, that the tax per kilometre should be lower for a small car?

[Atlan]

Nono - the fuel tax is added to fuel prices; you just pay more per litre at the pump. This road tax is separate from that.

Basically, in the past the amount of tax at you paid was calculated on the size and economy of your vehicle, and you paid extra tax per litre of fuel used. Now your tax is calculated based on a combination of its efficiency and the number of miles driver, but you still pay the same tax on fuel.

I meant " tax per kilometre" , that was just a blonde moment. Yeah, I get how it works now, though my point is still the same, I think, that the tax per kilometre should be lower for a small car?

Yes.
Tax per litre of fuel stays the same.
Tax per kilometre is dependant on how clean/efficient your car is, but NOT on it's size, as in the previous tax.
The smaller and cleaner your car, the less you pay.
Obviously newer models will also pay less, because cars tend to become cleaner as far as carbon emissions go.

[Master of Ossus]

Why do they bother with GPS systems, rather than just using odometer readings when people go in for smog checks? The GPS idea seems needlessly expensive to implement, to me.

[Stark]

Why do they bother with GPS systems, rather than just using odometer readings when people go in for smog checks? The GPS idea seems needlessly expensive to implement, to me.

I remember in the 90s a lot of truck drivers freaking out their odos to get around laws regarding maximum driving times and distances (because xyz was set as a safe level but employers still forced drivers to meet deadlines that required them to exceed these limits), so perhaps odometer readings aren't considered reliable?

[Pelranius]

Isn't it illegal to tamper with the odometers? Though a lot of penny pinching companies wouldn't really care, considering the peanuts that white collar criminals get punished with.

[Stark]

Of COURSE it's illegal; ESPECIALLY when you're doing it to conceal your own lawbreaking. That was the point.

[Siege]

Why do they bother with GPS systems, rather than just using odometer readings when people go in for smog checks? The GPS idea seems needlessly expensive to implement, to me.

Another thing to remember is that this system doesn't just register how many kilometers you drive, but also where and at what time. If you drive X kilometers across a jam-prone road at a particularly busy time of the day, you pay more than when you drive the same number of kilometers across a road in the middle of nowhere in the depth of night. An odometer wouldn't register this difference. The system is supposed to stop the busiest parts of the highway system from jamming up completely. It's a good idea at least, I'm eager to see if it'll work.

[Broomstick]

So, that's right--this tax literally punishes people driving fuel efficient cars and rewards people driving massive gas-guzzlers.

Did you miss this?

with higher charges levied during rush hour and for traveling on congested roads. Trucks, commercial vehicles and bigger cars emitting more carbon dioxide will be assessed at a higher rate, the Transport Ministry said.

Looks like small, efficient, and clean cars will be taxed at a lower rate than gas-guzzlers.

Between that and exempting buses, taxis, and motorcycles this tax does seem designed to encourage mass transit, doesn't punish taxi drivers which actually reduce congestion in urban areas (as instead of needing to park a car people just use the taxi), and exempts the most high-mileage of vehicles.

I also like that the cars of the disabled are exempt, as the disabled have fewer alternatives for getting around.

[[R_H]]

[
Tax per litre of fuel stays the same.
Tax per kilometre is dependant on how clean/efficient your car is, but NOT on it's size, as in the previous tax.
The smaller and cleaner your car, the less you pay.
Obviously newer models will also pay less, because cars tend to become cleaner as far as carbon emissions go.

Is the tax per kilometer also dependant on the physical dimensions of a vehicle? If one of the motivations is to reduce congestion on certain roads, then all vehicles should be taxed (because they all contribute to congestion, to varying degrees), even motorcycles, hybrids, electric vehicles and those being used by the disabled.

[Siege]

Motorcycles won't pay the new tax, because installing the GPS-transmitter is supposedly too much of a hassle on bikes. They will continue to pay the old vehicle tax. Classic cars (built before 1987) are completely exempt from the taxes. The kilometer tax itself will be calculated on basis of fuel type and CO2 emissions (diesel engines without a particulate filter pay more). Presumably this means hybrid cars will pay taxes, just less. Electric vehicles might not, but they're a non-factor anyway and will most likely remain that way for years to come.

[CmdrWilkens]

So rather than impose a beefy fuel tax, which effectively taxes distance driven while ALSO encouraging fuel-efficient cars, they impose a distance-tax directly. Seems...unwise and redundant.

Not to get picky this just seemed the best starting point for my statement which is that use of the road IN AND OF ITSELF is much more of a determinant of harm to both fellow drivers and the environment. That is a decrease of 10% in VMT versus an increase in 10% of MPG will favor the decrease in VMT (Vehicle Miles Traveled for those who have never seen the acronym).

The reason is rather simple, by driving a car regardless of size and composition occupies space and time within the road network which is in limited supply particularly in peak periods. In turn this creates congestion which slows traffic, leads to idling and longer durations of running engines at less than peak capacity even before one considers the financial cost of congestion (The DC region alone lost something like $19 Billion just in lost productivity due to congestion). This is also without going to deep in to the fact that road maintenance is based more on total number of vehicles traveled (and thus reflected in VMT) so more efficient vehicles taxed based on fuel alone will contribute less for repairs but still cause just as much wear.

[[R_H]]

Motorcycles won't pay the new tax, because installing the GPS-transmitter is supposedly too much of a hassle on bikes. They will continue to pay the old vehicle tax. Classic cars (built before 1987) are completely exempt from the taxes. The kilometer tax itself will be calculated on basis of fuel type and CO2 emissions (diesel engines without a particulate filter pay more). Presumably this means hybrid cars will pay taxes, just less. Electric vehicles might not, but they're a non-factor anyway and will most likely remain that way for years to come.

What about using RFID-transmitters for the motorcycles? Why are classic/older and electric cars exempt from the taxes? They still contribute to congestion, even if there aren't many of them relative to other vehicles on the roads. I'm still trying to wrap my head around the proposal's use of GPS-transmitters instead of something more conventional and wide spread like RFID or DRSC.

[Simon_Jester]

They contribute to congestion, but in small enough numbers that the aggregate effect of the tax on them isn't enough to matter? Remember that what's really going on here is a change in how taxes are levied. Neither the actual goal nor the approximate cost of the tax is changing much, as I understand it. If it's not practical to levy the tax that way on a certain small fraction of the population, there's nothing wrong with the old style, and you still get, say, 95 to 99% of the desired effect.