2024-2025 Group 2 - 1st Place Essay by Abraham Yeung

Transportation, especially gas-powered cars, are a large source of greenhouse gas pollution and cause global warming. In order to combat this, governments have passed many ambitious laws regarding electric vehicles. The U.S. federal government, for instance, plans to have 50% of all vehicles sold to be electric by 2030 (Electric Vehicles & Rural Transportation). Compared to the 7% of car sales in May 2024, it is evident that this is a very ambitious goal (Montoya). As the number of electric vehicles increases, policies regarding taxes on gasoline will become obsolete, forcing changes to occur. According to current policies, electric vehicles are exempt from or pay fewer taxes when compared to gasoline cars. As such, taxes for electric vehicles should be increased to compensate for the decreasing gasoline taxes along with implementing a road tax and removing tax credits. 

One issue that needs to change is taxes on electric vehicle chargers. The amount of tax paid across the nation on one gallon of gas, including state and federal taxes, is roughly 57 cents (Gasoline Tax). When taking into account the average mileage of a car, 24.4 miles per gallon, gas car users pay around 2 cents of tax per mile (Jaros). Some states do not even have a tax for electric vehicle charging, furthering the gap between gas and electric vehicles (Jaros). The states that do tax electric vehicle charging are charging roughly 3 cents per kilowatt hour (Jaros). With the average electric vehicle being able to travel 3-4 miles per kWh, the average tax per mile is 1 cent for electric cars (How Much). This is a glaring issue, since on average, electric car users currently pay half of what gas car users pay in taxes, even the state they are in has a tax on them. This needs to change. In the future when gas cars are tools of the past, there must be a mandated tax on electric vehicle charging. Otherwise, the government would lose a significant amount of money from the disappearance of the gas tax. This in itself will help recover most of the taxes that are lost in the EV revolution. 

However, merely raising taxes on Evs might not be enough: implementing a road tax may be necessary. A road tax taxes a driver based on the number of miles they have driven in a period instead of implementing a fixed rate (Gas Taxes). This would fix the tax inequity between EV drivers and gas drivers, since it bypasses taxes on fuel. This road tax can also be implemented in conjunction with pre-existing gas taxes to increase government revenue. As the name suggests, a “road tax” requires the driver to report the number of miles they have driven, typically using a GPS. One way to make implementing a road tax more feasible is to use the GPS system that is already present in many cars (Nieves). This, however, raises the question of personal information safety and how it will be managed (Nieves).To combat this, reliable safety laws regarding personal data need to be created, ensuring privacy of GPS data. If the issue with personal data is resolved, then a road tax can be implemented with greater efficacy, since fewer people will oppose it. 

Another method of obtaining more funds would be to remove the existing tax credits on electric vehicles as they become widespread. The federal government allows for a $7500 tax credit for electric vehicles, as an incentive for people to shift to them (Electric Vehicles). A tax credit of some form has been implemented in many states, allowing for thousands of dollars in credit for owning an electric vehicle (Threewitt). Since the main reason for these tax credits is that the government is trying to get people to buy electric cars, this will become obsolete in the near future when all cars are electric. If electric vehicles are the only form of transportation and gas cars do not exist, it would not make sense for people to receive tax credits for following the norm. By removing them, the government can gain some money back from the disappearance of the gas tax. Therefore, the tax credits for electric vehicles should be removed in the near future. 

While many people push for widespread adoption of electric vehicles, few consider the results of all-electric transportation. The transition to sustainable transportation will require many new policies and the cooperation of many. As of right now, many politicians are reluctant to act in favor of policies for sustainable transportation, despite having set ambitious goals (Nieves). In order for sustainable transportation to become a reality, both the people and politicians need to agree on permanent change and long-lasting policies.

Bibliography

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“Gas Taxes Are Unpopular and Insufficient, Here Are Some Alternatives.” State Smart Transportation Initiative, 10 July 2023, ssti.us/2023/07/10/gas-taxes-are-unpopular-and-insufficient-here-are-some-alternatives/. Accessed 28 September 2024. 

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Jaros, Benjamin, and Adam Hoffer. “How Are Electric Vehicles Taxed in Your State?” Tax Foundation, 20 Sept. 2023, taxfoundation.org/data/all/state/electric-vehicles-ev-taxes-state/. Accessed 28 September 2024.

Montoya, Ronald. “What Is the Percentage of Electric Cars in the U.S.?” Edmunds, 12 Jan. 2024, www.edmunds.com/electric-car/articles/percentage-of-electric-cars-in-us.html. Accessed 28 Sept. 2024. 

Nieves, Alex. “The Dark Side of the EV Revolution: Road Taxes.” POLITICO, Politico, 14 Aug. 2024, www.politico.com/news/2024/08/14/ev-gas-tax-drivers-california-00173619. Accessed 7 Oct. 2024. 

Threewitt, Cherise, et al. “Electric Car Tax Credits: State by State.” US News & World Report, U.S. News & World Report, 2024, cars.usnews.com/cars-trucks/advice/state-ev-tax-credits. Accessed 7 Oct. 2024.