#Taxes

The battle over the Houston, Texas red light camera program returned to the legal spotlight Monday. A majority of voters agreed with Francis M. Kubosh and Randall Kubosh in November that the automated ticketing machines should be removed, but a federal judge intervened earlier this month and overturned the election ( view ruling). The Kuboshes filed a reply brief with the US Court of Appeals for the Fifth Circuit Monday seeking to restore the result of the public vote.

Not satisfied with impoverishing residents and unwary visitors with $500 automated tickets for being a tenth of a second late at a light, California’s legislators are moving a new bill allowing cities to reduce many posted speed limits by 5 mph. The lower limits will, in turn, allow them to shorten yellow lights, which will produce more red light camera tickets (four of the sponsoring cities have red light cameras).

The average price of regular unleaded gasoline was $3.96 this week, an increase of 38 percent over the same time last year. US Senator Rand Paul (R-Kentucky) on Tuesday proposed to temporarily reduce that cost by 18.4 cent cents by suspending the federal gas tax. Under the freshman lawmaker’s plan, the highway trust fund would be replenished by reducing payments made to foreign governments.

“Let’s have a gas tax holiday,” Paul said in a floor speech. “Let’s take the money from foreign aid and let’s give it back to the American people who worked hard to earn it…. That would help people, that would lower the price of gasoline and that would be a stimulus to the economy.”

Speaking at Nissan’s Smyrna, TN electric car factory, Transportation Secretary Ray LaHood noted that his staff is working with Congress to make federal tax credits for plug-in car purchases available as a rebate on the dealer level, saying

We’d like for people to get a $7,500 rebate on the day they buy the Leaf. We’re doing a lot of talking about it. When you give people that incentive to buy a battery-powered car, they’ll do it. We know these incentives help.

Speaking to Automotive News [sub], LaHood even went as far as to argue that the new direction for the tax credits, which were previously only claimable when filing taxes, would be successful for the reason that it would make the credits more like the Cash For Clunkers program. Apparently LaHood has completely forgotten how riddled with waste, inefficiency, fraud, confusion, delays, unintended consequences and all-purpose madness that program was. And that’s just scraping the surface. Foolish as it is to subsidize vehicles during the “fleecing the early adopters” phase of a new technology rollout (perhaps we should be saving stimulus for the inevitable “trough of disappointment”?), making those credits available at the dealer level is even worse, increasing the hype and incurring C4C-like downsides along the way.

Backroom dealing will determine whether speed camera use will become common in Missouri. The General Assembly yesterday agreed to convene a conference committee to iron out differences between House and Senate-passed versions of an omnibus transportation bill that cleared the state Senate on Tuesday. Among the the items up for debate is language that would allow any governmental jurisdiction to set up as many photo radar units as it pleases without any meaningful limitations on use.

Hackles were raised here at TTAC and around the internet this week, when a draft version of the Transportation Opportunity Act circulated, tipping us to the administration’s preference for pay-per-mile road taxation. According to that version of the bill,

section [2218] would establish a Surface Transportation Revenue Alternatives Office within the Federal Highway Administration. The office would analyze the feasibility of implementing a national mileage-based user fee system that would convey prices to users to reflect system use and other travel externalities and serve as a funding source for surface transportation programs.

TTAC has been tracking and criticizing attempts at pay-per-mile taxation (both state and federal) since at least 2007, and because Transportation Secretary Ray LaHood had previously come out in support of pay-per-mile road taxes, we weren’t surprised by the TOA’s inclusion of a move towards pay-per-mile. And because the White House smacked LaHood down the last time he praised pay-per-mile, we aren’t all that surprised to find The Hill reporting that the White House is disavowing any interest in pay-per-mile. Spokesfolks explain:

This is not a bill supported by the administration. This was an early working draft proposal that was never formally circulated within the administration, does not take into account the advice of the president’s senior advisers, economic team or Cabinet officials, and does not represent the views of the president

So fear not, Americans opposed to a GPS tracker in every car: the White House has no interest in tracking your every movement. But until such time as a politician finds the cojones to address the highway fund’s shortfall by raising the gas tax, expect pay-per-mile to pop up again and again.

Ohio’s supreme court has a long history of defending traffic tickets, whether they happen to be issued by police or a machine. The court on Wednesday maintained this tradition in tossing out a constitutional challenge to the photo enforcement hearing process, denying the challengers the chance to present their case in full.

President Obama’s goal of having a million plug-in vehicles zipping around American roads by 2015 faces some serious challenges, as report after report casts doubt on the chances of the hoped-for level of adoption in the hoped-for timeframe. Meanwhile, the president’s defense of his plan’s practicability… leaves quite a bit to be desired. Regardless, the President’s goal is receiving some unexpected support as Automotive News Europe [sub] reports that

Germany’s cabinet plans to commit billions of euros to boost the electric auto sector so that 1 million cars are registered by 2020

One of President Obama’s signature achievements, passage of $812 billion in stimulus funds at the height of the recession, was labeled a failure by the chairman of the US House Transportation Committee, which had jurisdiction over about eight percent of the projects funded. In a hearing yesterday, Representative John Mica (R-Florida) explained that the money did not end up going to needed infrastructure projects.

“This will go down in history as one of the greatest failures of a government program to stimulate the economy that mankind has ever created,” Mica said. “This is a trillion-dollar lesson.”

For Jefferson County, Missouri, it was not enough to force a red light camera company to pack its bags and leave the area. Commissioners last week wiped the books clean, unanimously repealing the ordinance adopted last summer that had authorized the use of automated ticketing machines in the unincorporated parts of the county.

“The old three-member county commission decided to implement a red light camera program using ATS as the vendor,” Councilman Bob Boyer told TheNewspaper. “As is typical, ATS came to Jefferson County and found their problem for them. And then decided the best solutions were red light cameras.”

Editor’s Note: The text of the “Transportation Opportunity Act” with section-by-section analysis can be downloaded in PDF format here [courtesy: bna.com]

The White House last week began circulating its legislative proposal for transportation reauthorization that included provisions to add toll booths to existing freeways and impose a tax for every mile driven. The “Transportation Opportunities Act” for the first time gave the Obama administration’s full approval to the concept of an added charge on drivers for the use of roads throughout the country, including on existing, untolled freeways in major metropolitan areas.

President Obama’s goal of putting one million plug-in vehicles on the road by 2015 has faced serious challenges from day one, with several studies pointing out that the goal probably isn’t achievable without more government action. But up till now, President Obama has forwarded only one actual policy change aimed at achieving his goal, namely turning an existing $7,500 federal plug-in tax credit into a rebate, redeemable at the point of purchase (an idea first forwarded by Michigan Democrat Debbie Stabenow). This plan should help drive a Cash-for-Clunker-style EV buying frenzy, as the rebate would not be dependent on the buyer’s tax burden. But Automotive News [sub] reports that Senate Finance Committee Chairman Max Baucus (D-MT)

is very concerned [about the credit-to-rebate scheme] from an effectiveness standpoint.

Baucus doesn’t make a regular habit of opposing the President, but apparently his concerns about the Obama/Stabenow credit-to-rebate plan are serious enough for him to put politics aside.

An ongoing federal lawsuit against the speed trap town of Ridgeland, South Carolina uncovered internal emails last month that shed light on the motivation behind the state’s only photo enforcement program. Since July 2010, Ridgeland has allowed the private firm iTraffic to operate a mobile speed camera van on Interstate 95, despite a state law outlawing the practice and a pair of attorney general opinions warning that the photo ticketing was not legal ( view opinions).

Users of the Dulles Toll Road in Northern Virginia filed a federal class action lawsuit yesterday seeking refunds from toll hikes imposed to fund a $7 billion mass transit project. Great Falls resident John B. Corr and Hillsboro resident John W. Grigsby argued that the Metropolitan Washington Airports Authority (MWAA) has no authority to set toll rates and that the diversion of over $130 million from motorists constitutes an illegal tax.

American auto enthusiasts often bemoan the lack of diesel options offered on the US market, looking to Europe as the promised land of oil-burning efficiency. But Europe’s love affair with diesel, which has been manifested in a 50%+ diesel sales mix for years, may be coming to a close. The WSJ reports

The European Commission–which has executive powers in the European Union–will propose to levy a minimum EUR20 per metric ton of carbon dioxide emitted on products like gasoline, diesel, natural gas and coal starting in 2013. But it will also propose adjusting the existing legislation by gradually increasing a minimum levy on the energy content of diesel to bring it to the same level as that of gasoline starting in 2018

Here’s the key: in addition to basing taxes on C02 emissions, the EU tax structure shift will result in fuel taxation based on energy content rather than volume alone. Accordingly, diesel’s higher energy content means it will see a more dramatic increase in taxation levels. And this single common-sense proposal is unleashing an intense debate in Europe about energy, taxation and the future of the auto industry.