Oregon has had a $15 tax on all new bike purchases for almost six years now. It passed as part of the House Bill 2017 transportation funding package and went into effect January 1st, 2018. At a meeting on Tuesday that included state lawmakers, Oregon Department of Transportation staff, and leaders from various interest groups, there was an that made it seem like a change in the tax is imminent.
The Bicycle Excise Tax was a political compromise stuffed into HB 2017 in order to lessen the blow of other taxes targeted toward car owners, buyers, and sellers. It was not strongly opposed by advocacy group The Street Trust, who wanted to pass a bill in order to garner set-aside funding for Safe Routes to School and it hoped it would give cycling and active transportation advocates an answer to the perennial bad faith argument that, “bikes don’t pay their fare share.” The tax raises an average of about $833,000 per year on sales of about 51,000 new bikes purchased in Oregon (or by Oregonians from online sellers). The $5 million raised so far has been put into a grant program that funds off-highway paths.
The tax was discussed at the final meeting of a workgroup convened by the Oregon Legislature’s Joint Committee on Transportation that is setting the groundwork for a new transportation spending package that will be proposed in the coming session. In that meeting, Oregon Department of Revenue Policy Coordinator Xann Culver shared a presentation about the tax to inform the lawmakers and advocates in the workgroup.
In response to Culver’s presentation, Duke Shepard, a workgroup member and senior policy director for Oregon Business & Industry (a nonprofit advocacy group based in Salem) said, “It struck me as puzzling that it’s a $15 fee regardless of the price of the bike.” It’s a good point, given that the tax begins at bikes costing as little as $200. That triggered a conversation about the tax.
House Representative Susan McLain (D-Hillsboro) was one of the architects of HB 2017 and is now a co-chair of the Joint Committee on Transportation. She responded to Shepard by saying that, essentially, there wasn’t enough time to analyze the fairness of the bike tax and $15 was just the number they came up with. “We hadn’t had a bike tax before,” McLain said. “And so the idea of even having a bike tax was a big lift.” McLain added that they wanted a number high enough to make the tax worth it, but not high enough so that it discourages bike use.
But what we’ve been left with is a regressive tax that is much higher than a similar tax on new cars that was also passed in HB 2017.
State of Oregon Senior Economic Mazen Malik was also in the meeting. He called the $15 the “least acceptable compromise at the time” and that a 7.5% tax on the retail price of new bikes was also considered. “The idea was primarily to start this process [of a bike tax] and see if it sticks, and then if the progressivity element needs to be injected into this subsequent legislatures would look into that.”
For Oregonians who purchase a $200 bicycle, which is about the cheapest you’ll find even at a big box retailer, the $15 bike tax equates to 7.5% of the total purchase price. By comparison, Oregon’s “vehicle privilege tax” (also passed in 2017) that’s charged to car dealerships, is just .05% of the retail price of a new car. For a $20,000 entry-level car, sellers pay tax of just $100. If they paid at a rate similar to the bike tax they’d pay $1,500.
Put another way, in the current system, the tax rate on an entry-level bicycle is 15 times higher than that of an entry-level new car.
That point was made by Oregon Trails Coalition Executive Director Steph Noll at Tuesday’s meeting. “That $15 tax is such a higher percentage that what our vehicle privilege tax is,” she said. “So if we’re looking at making it more progressive, even if we were to double the current bike tax, it really doesn’t do much towards filling the revenue gaps that we are looking at.”
House Rep (and now Senator-elect) Khan Pham, who was facilitating the meeting, echoed Noll’s sentiment. She said that even if a bike tax raised $1 million per year it would be an almost unrecognizable amount amid the multiple billions Oregon needs to raise. Changing the bike tax is, “Something that we definitely do need to address in the coming up, the upcoming session,” Rep. Pham said. “Because you’re right; those are very different price points, and we want to make sure we’re being equitable.”
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7.5% is a crazy tax especially for a vehicle that does significantly less damage to our roads, environment, and health especially compared to the vehicle rate. The fact that it was even discussed in 2017 is absurd. The flat tax is equally absurd. To be charged the same rate as the vehicle tax you would need to buy a $3,000 bike anything less than that and you’re paying a higher percentage.
If I remember correctly the justification was so that we’d have skin in the game. So based on that drivers have stopped complaining about new bicycle infrastructure and cyclists being “in their way” right? No that didn’t happen? Well then perhaps we should get rid of it.
I’d be totally fine with 7.5% IF we taxed other vehicles at proportional amounts. For a typical sedan that would likely end up at a 200-300% tax if not higher.
But yes, we should just get rid of the bike tax. Should have never existed.
We should be paying people to bike
Regressive taxes are a social ill and if anything we should give incentives to bike purchases and perhaps even to bike shops. At the same time, I’d like to have some voluntary channel for contributing to a fund for bike infrastructure, on the order of duck stamps (which were required, but never mind that) so that a concerned person can move public policy by just writing a check. I’m not made of money but I could find $100 right now that I’d put in the pot.
I’ll likely never buy another new bike, so the state of Oregon will continue to interpret my need for bike infrastructure as zero.
Well, we’re gonna give rebates to ebike purchases. Meanwhile, cheap normal bike purchases are taxed.
Calling regressive taxes a “social ill” is a bit dramatic. Sure, they hit the poor harder, but sometimes they’re just the easiest way for governments to rake in cash. Flat taxes on things like gas or cigarettes may seem unfair, but at least they make it simple to fund stuff we all use—roads, emergency services, etc. The real issue is not the tax, but if it’s the only tax. A good tax system balances things out. It’s not like a flat tax is going to single-handedly ruin society—unless, of course, we let it.
Point taken. We put ‘sin taxes’ on things like cigarettes which are clearly harmful, have high costs to society, and not needed for survival. Regressive taxes on things like food are a different case.
A regressive tax on bicycles doesn’t look like a good policy. The shoe is on the other foot if a bike purchaser is asked if they want to make a voluntary donation at the time of sale. I might buy a spare tube and decide I could use $20 worth of bike lane, or perhaps just round up the purchase to $10.00, if tubes are still less than that.
Taxing something you want to encourage is absolutely insane. We should be doing the exact opposite, applying a negative tax to anyone who walks, bikes and/or takes public transit while applying at least a 100% tax on cars.
You tax the things you want to discourage and give rebates on the things you want to encourage. We’re just fighting basic logic with the status quo and slapping ourselves in the face.
Yes — the larger taxation issues make this $15 just bitter icing on a poisonous cake of false incentives. It’s galling that my coworker got a tax rebate (or credit, I don’t know) for purchasing an electric car, but I got nothing for purchasing an electric (pedal-assist) bike. We each commute using these vehicles, but with vastly different impacts on public health as well as individual health.
It’s not really the same thing… we have a very strong public interest in getting drivers to switch to electric cars when they buy a new vehicle. We do not have a similar interest (maybe even a negative interest) to get bicycle riders to go electric. It makes sense to subsidize one and not the other.
That said, I would happily subsidize (even up to 100%) bikes for people who gave up driving to ride. (I have no idea how to do this in practice, but I agree with the principle.)
You’re talking apples and oranges here, Watts. The e-bike significantly extends most riders’ range and ability to bike at all. Lois’s analogy is apt.
Why is that a public good that should be subsidized, the way reducing burning of fossil fuels is?
Or are you talking about people giving up driving for biking, which I said I would happily subsidize?
Because it reduces burning of fossil fuels? This is obvious, you are being obtuse. If someone can’t (or won’t) reach their destination by pedaling only, and they can’t afford an e-bike, they will drive. This is an exact 1:1 analogy with subsidizing electric vehicles. Only, e-bikes are much better for the environment and should probably be subsidized even more.
So yes, we are talking about exchanging a car for a bike. As I said, I’m on board with that.
I should get money back for not having kids
Only if your kids were going to grow up to be serial killers.
But wait: if your goal in not having kids is to control population growth, then having kids who become serial killers is even better, achieving not just zero population growth, but NEGATIVE population growth!
I like how you think!
It’s Oregon. Land of good intentions and terrible policy analysis.
The tax was a dumb idea, and was primarily a political stunt. It doesn’t generate much money and it is very inefficient.
It’s hardly surprising that The Street Trust supported it.
“Skin in the game”
Street Trust hasn’t seen a tax they don’t like, because they know how their bread is buttered.
Gee, I wish I could have paid just Oregon’s tax when I just bought an ebike here in NC and paid a bit over $158 in sales tax on it.
Is that a tax targeted only to ebikes? Or only to bikes?
Or are you just complaining about a sales tax? Oregon is the only state with a stupid bike tax; most states have a sales tax.
No, just I’m gently pointing out that soon you too will be paying sales tax, but in a form that Oregon voters will go for (instead of voting 80% against as usual.) Essentially y’all in Portland have given your state the very tempting option of making the Portland CES (as in PCEF tax) statewide and for all businesses of any size – you’ve accidentally opened a Pandora’s Box that you’ll likely regret.
According to Portland city language:
For tax years beginning on or after January 1, 2019, the Clean Energy Surcharge (CES) is a 1% surcharge on Retail Sales within the City of Portland imposed on Large Retailers.
All businesses that report total gross income of $1 billion or more and Portland gross income of $500,000 or more on their Business Tax Return must file a CES return.
Large Retailers. Hmm. So the stores poor people often shop at like Target and Walmart will get taxed first, and people buying $199 Walmart bikes not only pay the $15 fee, but the store will raise prices by 1% to cover the CES tax, so $15 + $1.99 = $16.99 sales tax (bike fee + CES tax). But why stop there, why not tax smaller businesses too? Nobody will care, all business owners are evil, right? So soon your new 12-member city council will extend the CES tax to smaller businesses.
Now extend this statewide and encompass all businesses of any size, and what do you get? Yup, an indirect sales tax. And since liberal well-educated Portlanders bought it (or got suckered into it), you can bet most people in Oregon will vote for it too.
The Portland rate is “only” 1% of gross retail sales, but you can bet the state will ask for at least 3%, which then would make it 4% total, so about $8 for a $200 bike and $40 for a $1,000 bike, and for my $2,300 ebike it would be $92, far more than your current measly $15 fee, which likely they’ll keep as well.
And once you have such an indirect sales tax, you can bet that every city, county, and the state legislature will raise the tax as much as they can, often, because Oregon voters will be fooled into thinking it’s not a sales tax, but a tax on those greedy businesses, who will then charge more for the stuff you buy to cover the tax.
Way to go Portland. Now every community in the USA wants to do it too.
David is correct: OR needs a sales tax, like every other state, and will have one eventually. Maybe even in the upcoming legislative session!
Why??? If we keep getting a kicker then it shows that they don’t need a sales tax, they are collecting more than they need now.
Don’t get me started on the kicker, which uses a completely arbitrary number to “kick.” You may as well say that XYZ Corp should also give back their profits.
Plus you are comparing apples and oranges. If OR had a sales tax, you’d pay less in income tax, which has nothing to do with the total amount of tax collected.
If we knew then what we know now, I highly doubt Portland would have supported PCEF. If someone puts repeal on the ballot, it will pass.
I don’t see it rolling out statewide.
McLain : ‘essentially, there wasn’t enough time to analyze the fairness of the bike tax and $15 was just the number they came up with.’
So instead of even pretending to do any sort of due diligence as one would expect of a politician (I kid, I kid, man I crack myself up), they just pulled a number out of their ass…?
Ugh. Seems about right.
A lot of folks have always purchased used bikes, and always will. This tax did not affect them.
(Anecdotally, the prices on used bikes have tanked for all but the fanciest makes and models. A mountain bike that sold on Craigslist for $300 in 2017 is now fetching half of that or less, depending on condition and location. Some prices on mid-range bikes are coming back up but it’s not definitive for the whole used bike market.)
This was a stupid idea meant to quell the specious and inaccurate “bikes don’t pay their fair share” argument. I wouldn’t be surprised if the cost-benefit analysis was anything other than marginal at best.
“She responded to Shepard by saying that, essentially, there wasn’t enough time to analyze the fairness of the bike tax and $15 was just the number they came up with.”
The transportation committee has some incredibly careless people on it. The best option was to say that a tax that is sufficient to cover admin costs without being unfair or an undue burden on bike purchasers or sellers was not possible. So, let’s be adults and not enact a silly tax for political reasons. She is such an embarrassment for Oregon.
What I’ve noticed from following these committees for a long time is that they are indeed careless sometimes and unserious… But that carelessness is more of a problem when dealing with things they care less about – like bicycling. If it’s a policy about the state highway fund, they are very very serious and careful. It’s another way that biking and active transportation is marginalized.
Also, I am a firm believer that we need to pay legislators a lot more money so we get real ambitious professionals.
Good point, Jonathan. You’ll pay your heart surgeon a lot of money b/c you want her to do a good job. Your legislator who determines SO MUCH of importance in your life? Not so much – they can essentially be “volunteers.” Ridiculous.
Nevermind the math and fractions. Can we just agree that, as a basic economic principle, that we should tax the things we wish to discourage and not tax the things we want to encourage? The article fails to mention that the Street Trust administers the Safe Routes to School program. Their support of the tax was a clear conflict of interest.
No. I do not want to discourage earning money or property ownership or retail transactions, for example, but I still think it’s reasonable to tax them. I do want to discourage shoplifting, but I don’t think taxation would be an effective mechanism for doing that.
Of course there are plenty of cases where what you say is correct, but as a general principle, I don’t think it holds.
Yup, we could fix an immense amount of problems in this country if we simply taxed negative externalities. It’s a basic economic principle so doesn’t surprise me our political system totally failed at applying it.
You’d be surprised how much pushback I got right here in this forum proposing a carbon tax, a very straightforward externality tax with existential consequences.
No, we cannot agree that government should be in the business of attempting to control its citizens via taxation.
Good luck, taxes on alcohol, cigarettes/cigars/vaping/pot, gambling, etc. are not even close to accounting for their negative externalities, yet because those are moderately regressive, there is little push for them to go higher. We’ll just keep pretending that the taxpayer of means (i.e. relatively high income individuals, buyers of newly constructed properties and large corporations) will just continue to cover the bills in perpetuity.
I work at a bike shop in town and always mention the tax when adding to an invoice for anyone’s new bike. A lot of people don’t know about or have forgotten its existence, but judging by folks’ most common responses: everyone finds it very silly. We all joke that the $15 pays for a few inches of bike lane paint (which we all know is highly effective at providing safety for cyclists).
If a lawmaker proposed a 7.5% sales tax on new motor vehicles they would be rounded up by an angry mob and dumped into the ocean. This is an insane double-standard.
So, how much does the Oregon “system” propose to credit the bicycle tax from Federal money received for Oregons infrastructure?
There was an What, now?
Just get rid of the tax.
How about getting rid of all unnecessary taxes?
Art Tax
Day Care
Tax on Bottles (yes that 10 cents is a tax)
etc.
Can you expand on how those are unnecessary taxes? Is it because you don’t think we need the services those pay for? Should we close all public schools too? Or are you implying we should just pay for those out of the general fund and raise the taxes slightly (I agree with that – we shouldn’t be doing stupid one-offs).
Can’t raise general local taxes (i.e. property taxes) without repealing Measures 5 and 50 (which isn’t going to happen), so special taxes it is!
finally, someone else in here is commenting about property taxes
No, it isn’t. It’s a surcharge that distributors charge to stores, and that stores then charge to consumers. Then, when consumers return bottles to stores the stores can send them back to the distributors for a refund of that 10c surcharge. There is no tax collected by any state agency that is then disbursed out or anything like that. Just because it’s a surcharge doesn’t mean its a tax.
The word “tax” has a specific meaning, it’s not just “cost of thing you don’t want to pay enforced by the government”. Is the government requiring automotive insurance a tax? What about health insurance? How about a driver’s license?
Also the bottle bill is good policy, and so is preschool for all (assuming that’s what you mean by Day Care). The arts tax is dumb though, and its made worse by the way its administered
I just returned from the Midwest where bottles and cans littered every sidewalk, ditch, river, creek, pond, lake, and roadside.
The Oregon bottle bill is one of the best things we have in Oregon. Is it perfect? No way – it needs to be updated so it doesn’t support addiction (put the value on an Oregon-Trail-type card that can be used to buy food only).
But does it keep millions of tons of metal and plastic out of landfills, natural areas, and waterways? Yes, it does.
I’ve soured on the bottle bill a bit in recent years, but this comment has reminded me of why we need it. Thanks!
This would be stupid. I drop off cans and don’t qualify for EBT and I’m sure I’m not the only one. It’s needless administrative overhead and paternalistic. People who rely on the bottle bill funds to eke out an extraordinarily marginal living have far more needs than just food. To say that people returning bottles for money works, and then making a suggestion to make the program worse in every conceivable way to treat a societal ill better addressed via almost any other mean is just silly.
Does having a floating 10c return available give people with little means access to a bit of cash? Yes. Is that money sometimes used to buy drugs? Yes. But what’s the alternative? Almost certainly something far less savory. People who are dealing with debilitating drug addictions and living on the streets tend to be desperate, removing the little means they may have to earn a bit of cash would make a bad situation worse for everyone.
One big problem is people use EBT to buy bottled water, go to the parking lot, dump the water, then return for the deposit. $1 of food gone for 10¢ of cash and all the associated environmental waste.
The fix for that is, literally, trivial. Don’t allow paying for bottle deposits with EBT, collect them in cash instead. People will get their cash back when they redeem their containers, just like the rest of us.
Sure, that’s a fine fix to the problem you outlined which seems to be a different problem than the one I was replying to
Sounds good to me.
Reason prevails, maybe.
I didn’t think I’d be paying this tax, but my 40 year-old bike broke, and I had to get a new one. But I’ve paid it more often for my kid than for myself. Kids periodically outgrow bikes, and it’s harder to find the right-sized kids bike used. So I guess this tax is mainly to discourage people from buying their kid a bike? And to discourage from shopping at local bike shops.
“It was not strongly opposed by advocacy group The Street Trust”
I don’t think there’s ever been a tax that Portland nonprofits don’t like.
Making the tax even more illogical and silly is the fact that the proceeds go (as the article states) to funding off-highway paths, not street infrastructure.
That wouldn’t necessarily be bad. But it is when the tax was created for the purpose of showing bike riders have “skin in the game”.
Bike opponent: “Get off the road. You don’t pay for it.”
Bike rider: “I paid the bike tax, which is FIFTEEN TIMES HIGHER than car taxes”.
Bike opponent: “How much of that went to paying for that lane (or bike lane) you’re in?”
Bike rider: “None. It went to building off-road bike paths”.
Bike opponent: “Then go ride there.”
If anything, the tax gives CONFIRMATION to people who think bike riders have no skin in the game that they don’t, and that since it only pays for off-road paths, that that’s where bikes belong.
So the tax achieves exactly the opposite result from what it intended to do.
That’s a really smart take that I would have never considered.
This is made even worse by the fact that state law already required 1% (I think) of highway proceeds to go towards bike/ped projects. Given that there’s no way this tax ever was going to exceed that 1% figure, it’s just displacing tax money that would have been spent on bike infrastructure anyways. So if it brings in $1M, and ODOT had to spend $20M on those projects, they’re just going to have $1M floating to spend on whatever they want. So there’s almost no way it makes a difference, other than to direct some of the 1% money specifically into off-street paths while also functionally giving the state more flexible funding to spend elsewhere. If everyone in the state bought a bike and the tax brought in $50M, maybe then it would make a difference but it’s just not serious or useful policy as it stands imo.
Where is the tax money spent? I live in Coos Bay and I would love it to be more bikeable, but we barely have any bike infrastructure. Not even on complete bike lane. If all pay the tax, who determines where it goes to?
Hi Rebecca,
The tax money goes into a grant program that is dedicated to building biking and walking paths statewide. The program is called Oregon Community Paths. https://www.oregon.gov/odot/programs/pages/ocp.aspx
Grant awards are determined by a process that a run through the Oregon Bicycle and Pedestrian Advisory Committee.
Have you done an article on the work on this body? I’d love to read more about it. I’ve always thought grants are problematic b/c they usually reward people for doing more of what they are already doing; they do little to help people like Rebecca in Coos Bay get even ONE path to cycle on since political leadership for cycling in Coos Bay is at ZERO.
I’m all for those paths, and that they serve people walking also, and I also understand that walking and biking uses on paths are typically intertwined.
But when the “let’s show that bikes have some skin in the game” was such a driver behind the tax, there’s some irony and lack of logic in spending the bike money on walking infrastructure.
Someone could argue that well, since we’re building the infrastructure that benefits bikes, it only makes sense to let people walk on it, too, since it’s already there and useful to them, even though people walking have “no skin in the game”.
And it’s a valid argument, but it’s also valid in regard to bike riders using streets, and that’s exactly the situation the people who created the bike tax thought was untenable.
The obvious solution is either a) fix the bike tax, or b) SHOE TAX!
qqq you are trying to make sense of something that is inherently lacking in it.
That’s why I loved Lisa’s land use articles!
Cars don’t even pay their fair share. If they had to, no one would drive them.
How do you define “fair share”?
Oregon roads are funded almost entirely by vehicle related taxes and fees.
C’mon now, Watts! You know you are repeating a falsehood.
As someone has already noted in this space, you are being willfully obtuse.
We’ve been through this so many times. I’ve produced an accounting of where the money comes from; there is a small amount now or in the future coming from general funds at the federal level, but the vast bulk is vehicle derived.
As I’ve said before, if someone can actually show why this statement is wrong, I’ll modify it (as I have, I no longer claim 100% of funds are vehicle derived, because they aren’t, but most of it is, and what isn’t is mostly paid by taxpayers who are drivers.)
Let’s try this: what is the strongest statement I could make on this topic that you would accept?
Which is why the state is leveraging $1B in general fund bonds to pay for the IBR right? $1B + interest will be ~10% of ODOT’s budget over the lifespan of those bonds
Bond payment for transportation bonds comes from ODOT’s budget. This could always change in the future, but that’s how it currently works.
Again you are being willfully obtuse. General tax revenue that pays for bonds administered by ANY agency – ODOT included – comes from taxpayers generally, not from drivers specifically.
And how about the billions of dollars that come from the Federal gov’t for highway projects of all kinds? Please show me how any driver provided those billions and I will be happy to entertain your claim that drivers specifically pay for all roads.
Yes — but only if general tax revenue is used to pay those bonds, and it’s not deducted from ODOT’s other funds. There’s a line item in the ODOT budget, which I’ve showed you before, for paying this interest.
Just because there’s a line item in ODOT’s budget does not mean that it’s not coming from the general fund. ODOT is not solely funded by highway fund (or other auto related taxes).
It’s true that I cannot prove the state is not paying for ODOT’s bonds and that the bond payments in ODOT’s budget are for something else. Proving negatives is hard.
This is not true for the $1B general obligation (GO) bonds promised by the legislature for the IBR. They are bonds backed by the State of Oregon’s general fund, and are paid by that. Here is further reading on GO Bonds in Oregon; a GO bond means that the issuer will pledge any/all of its resources towards debt service, including an unlimited property tax levy. The full $1B coming from GO bonds is so that ODOT can spend the $700M in highway fund money that was originally supposed to augment $300M of GO bonds (reported by the Columbian here). A GO bond is a different category than a highway fund bond (a type of revenue obligation bond).
The repayment of the bonds may be allocated to ODOT’s budget later on by the legislature, but that’s just accounting. If the state takes out a $1B loan, promises to repay it via the general fund via a $100M payment for 20 years, then allocates ODOT $100M a year to make that payment then sure ODOT is “paying for it” but that’s $100M/year not going towards other services.
If the state starts paying for the IBR from general funds (either directly or indirectly), that will be a change of facts. And if the facts change, my characterization of them will change accordingly.
But just because the state is guaranteeing a bond does not mean it’s actually paying it, just like a cosigner on a loan may never write a check.
And I’ll add that it really doesn’t matter, except to people who like to say “you didn’t pay for that”. Roads are like any other service the government provides, and while paying for them with vehicle fees seems tidy, it’s ultimately unimportant.
They have promised a $1B GO bond!! And that $1B package was specifically crafted to free up $700M in highway fund money for other projects. Where do you think that is coming from if not the general fund??? ODOT is very much not increasing the gas tax, or registration fees, or anything else to raise money to pay this bond.
They are not guaranteeing a bond, they are issuing a bond. Which is secured by “the full-faith-and-credit and taxing power of the [state]”. Issuing a bond is very different than being a co-signer on a loan. The state has a legal obligation to repay the debt from the bond, so yes the state is actually paying it.
The legislature could choose to allocate the budget in a way that ODOT was solely responsible for the ~$100M/year that this bond will cost with highway fund dollars. But given the state of the ODOT budget, this would have to mean a drastic increase in taxes that fund the highway fund, and that is not considered to be a realistic option.
I generally agree, and a general obligation bond is an important debt instrument for the state. But $1B is a very significant amount, and that’s money that could be spent better elsewhere. Especially when you considered that the primary benefactors of decreased roadway congestion are Clark County commuters, it makes very little sense for Oregon to take on debt. A significant share of Clark County commuters represent lost revenue for the state of Oregon, taking out debt to reduce the future tax base is mind-numbingly bad policy.
None of this has yet come to pass, so has no bearing on the veracity of my claim. Ultimately, the question of what is “fair” in road spending is a pointless one, and it’s only in that context that the question we’re discussing is even relevant.
I agree the money for the IBR could be better spent elsewhere. I strongly oppose the project as it now stands, and have backed up my views with action.
Yes! – let’s have a 7.5% tax on the sale of bikes. The Dem supermajority can make it happen now, and while they’re at it they can extend the tax to ALL OTHER SALES. Oregon can join the grown-up states that have a sales tax, like all of our neighbors (CA, WA, ID, etc). Quit taxing income at the exclusion of everything else.
Sales taxes place an undue burden on those who make less money, while income taxes can be set up progressively to have the opposite effect. The lack of sales tax in Oregon is good, and introducing it would not be a positive.
What about eliminating the externalities the lack of sales tax imposes on transportation?
Yesterday I talked with a co-worker who had driven from Washington State to Portland to pick up a package she had shipped to a locker in Oregon to avoid paying sales tax. Many thousands of Washingtonians do the same thing to avoid paying taxes. How is that good for transportation, climate, pollution, etc?
This is tax fraud, especially if it’s being shipped to a locker. I would advise my co-workers committing tax fraud to not do that, or at least to not tell me about it.
I think that the income tax evasion arbitrage in Clark County is a much larger point of concern than the sales tax evasion. Having thousands of Oregon employed workers live across the river to pay less in income tax is worse for the transportation network than the existing sales tax arbitrage. So we should rectify that with an income tax in Washington 🙂
The bike tax brought in $700k in FY 2023 (2024 Forecast), the vehicle privilege tax brought in $34M. The forecast for the next 10 years doesn’t ever have the bike tax going over $700k, while the privilege tax goes above $50M.
Eliminate the bike tax and the discussions on being equitable, because that is just absolutely being presented in bad faith.
In other words, the tax on cars is not high enough. That’s the elephant in the (ODOT) room. In the EU, the vehicle tax is approximately 20%, however that’s often offset to the point of an actual price reduction if the vehicle is electric.
We should be doing everything we can to disincentivize carbon emissions. that includes supplementing the gas tax with a percentage mileage tax that varies depending on vehicle weight.
That also, presumably, means doing everything we can to convince people to never again buy a new gasoline powered car, which probably means we should exempt EVs from a mileage/weight tax, at least until we’ve fully converted.
I had thought that part of the argument for a mileage/weight tax was to more fairly spread the cost of road maintenance among those who use heavier vehicles more often. Should we really exempt the heavier (on average) EVs from the damage they do to the roads until the the electric grid collapses from the worsening climate crisis as the odds of full EV integration are getting lower by the day and will almost disappear here in the states come 20JAN.
It depends on the policy goal, obviously. I was responding to a comment that said “We should be doing everything we can to disincentivize carbon emissions.” If that’s the goal, then yes, EVs should be exempted.
Other goals, like incentivizing lighter vehicles, might suggest a different policy.
My personal view is that getting rid of gasoline powered vehicles is a more pressing public interest than just about anything else in this neck of the policy woods, but reasonable people might disagree.
Car companies have a strong incentive to keep selling EVs even once Trump is in office, so I expect some policy may change, but vehicle availability and uptake will remain strong. People who drive them tend to like them so it’s not quite like feeding people cod liver oil.
Ford, GM, Mercedes and VW are all scaling back or delaying production of EVs and the $7500 credit is going to disappear so I don’t where you get your info that car companies have a strong incentive to keep making them.
Car companies know the EVs are here to stay (even if the rules are temporarily weakened under Trump), and if they start retooling for gas car production now, they’ll just about be done when a new administration takes power. Furthermore, any car company that wants to be competitive internationally needs to be good at making EVs. Finally, weakened federal rules do nothing for large markets like CA, and no one wants to continue investing in 2 completely different technologies when the future is so clear.
I expect demand will fall somewhat if the tax credit disappears, but the future direction seems pretty clear.
EV deployment continues apace:
https://www.coxautoinc.com/market-insights/q3-2024-ev-sales/
https://www.eia.gov/todayinenergy/detail.php?id=62924
https://news.gm.com/home.detail.html/Pages/topic/us/en/2024/nov/1104-evsales.html
etc.
The coming administration I would think highlights the concern of having ones vehicle tracked at all times by a government agency. Is there another way you are thinking of collecting a mileage tax besides knowing where I’ve driven?
I completely agree on the weight variable and I also agree with the idea that the weight scale should start at just above the heaviest Ebike or Etrike which would be……300lbs maybe.
Yes.
1) A unified national or regional tax policy might allow you to use odometer readings, then let the states sort out who gets how much based on statistical measures. No need to track if the fee per mile is the same everywhere.
2) Or Oregon could just say screw it, we’re taxing every mile, just like the US taxes income earned anywhere in the world, even if you are living abroad.
3) Or you could go off the odometer reading and let people attest to their out-of-state mileage (perhaps supported by charging/filling receipts somehow). This has some obvious problems, but it is an option.
4) Or you could trust that the dongle the government installs in your car really doesn’t track location, just accumulations of miles. This could be aided by using an open source solution (one or several) with transparent data transmission, perhaps only sending data to your phone in plain text and letting you show that at payment time.