US Utilities Have Finally Realized Electric Cars May Save Them (qz.com)

Pity the utility company. For decades, electricity demand just went up and up, as surely as the sun rose in the east. Power companies could plan ahead with confidence. No longer. From a report: This year, the Tennessee Valley Authority scrapped its 20-year projections through 2035, since it was clear they had drastically underestimated the extent to which renewable energy would depress demand for electricity from the grid. But there is a bright spot for utilities: electric vehicles (EV), which make up 1% of the US car market.

For years, that market barely registered on utilities' radar. As EVs find growing success, utilities are building charging infrastructure and arranging generous rebates. Pacific Gas and Electric, Southern California Edison, San Diego Gas & Electric, and New Jersey's PSE&G have partnered with carmakers to offer thousands of dollars in rebates for BMW, Nissan, and other brands. Now utilities are asking Congress for help as they attempt to keep tapping into EV demand. A collection of 36 of the nation's largest utilities wrote a letter (PDF) to congressional leadership on March 13, asking for a lift on the cap on EV tax credits. The signatories' include California's Pacific Gas & Electric, New York's Consolidated Edison, the southeast's Duke Energy Company, and others covering almost every state. At the moment, Americans who buy electric vehicles receive a $7,500 federal tax credit (along with some state incentives) for each vehicle.

Comments

End of Petroleum Taxes

[Oswald McWeany]

Most of us around the world pay taxes on every liter or gallon of petroleum our cars consume. In some countries it's a pretty high tax. If electric vehicles start making up a larger and larger % of vehicles on the road will there come an end where to be fair you need to drop the tax on fuel and instead tax electricity- take a certain % of your electricity usage and put it towards maintaining roads and public transportation?

We all benefit from roads and bridges, even those that don't drive.

Obviously we're still at the stage where most governments are still trying to encourage more electric vehicles, but eventually if electric takes off like planned, it's going to become unfair to place all the burden of taxes to maintain roads on drivers of ICE vehicles. Especially since it will most likely be the poor and impoverished who will be the last to adapt to the new electric-vehicle age.

Re:End of Petroleum Taxes

[hipp5]

While fuel is taxed, it doesn't come close to covering all road costs (at least in the jurisdictions where I know the details). Most road construction and maintenance funds come out of general funds raised by property and income taxes. So while the EV driver (an the cyclist) do pay less in taxes towards the road, it's certainly not accurate to say they don't share at least some of the burden.

Re:End of Petroleum Taxes

[Anonymous Coward]

While fuel is taxed, it doesn't come close to covering all road costs (at least in the jurisdictions where I know the details). Most road construction and maintenance funds come out of general funds raised by property and income taxes. So while the EV driver (an the cyclist) do pay less in taxes towards the road, it's certainly not accurate to say they don't share at least some of the burden.

Given that an 18-wheeler requires about 1,500 times the road maintenance one car does, the amount of maintenance required to maintain a road for a year if it were used only by cyclists could probably be paid for by the sales tax you paid on your donut this morning.

Because from eyeballing the charts in that document, it looks like the damage a vehicle does to a road is proportional to about the third or fourth power of the weight of the vehicle - which means the damage a cyclist does to a road is literally negligible.

Cyclists are paying a lot MORE than their share of road maintenance.

Road damage is pretty much entirely caused by trucks, unless there are lots and lots of cars and almost no trucks.

Re:End of Petroleum Taxes

[Rei]

Almost makes me wonder if the taxes should be on tires, relative to their expected lifespan and predicted road damage. Then you're taxing the object that directly does the damage. If someone does something that will increase the road damage - driving aggressively, carrying large loads, etc - they'll correspondingly burn out their tires faster. Kind of silly that a person can drive around on studded tires (which are very popular here) but pay the same road taxes per unit distance as someone driving around in the same vehicle on soft tires.

Re:End of Petroleum Taxes

[bluefoxlucid]

income tax (which primarily impacts lower and middle classes)

So, a 20% tax on someone who makes $10,000 is $2,000. It's a big part of income (which is why there's a $6k/$12k 6.2% bracket and a following $10k-wide 16.2% bracket), but it's small in dollar amount. Because it's so small, making the system progressive by lowering taxes on the lower income classes doesn't much impact revenue at all; however, lowering income taxes on the middle-income classes impacts revenue massively, and is tricky.

As you move toward the upper income classes, the impact of an income tax increases in terms of raw dollars. The impact on their standard-of-living is smaller, so a progressive tax increases that because it's safe. Part of that is because upper income earners tend to store more in savings--and so you can take some of that without impacting them, unless you take so much as to deprive them of a stabilizing emergency fund.

This is important.

The difference is, they can't hide as easily from a consumption based tax as they can from a income tax.

By keeping your money in savings (and investments), you effectively evade any and all sales tax. This means your effective tax rate falls immensely.

A sales based tax (especially if placed on non-essentials only) means that we don't have this ridiculous system we have now where the poor and middle class pay a higher percent of their wages than the rich do

In 2014, the top 1% earners paid an effective income tax rate of 27.16%, carrying 39.48% of total income taxes paid. The top 5% paid a rate of 23.61% and carried 59.97%. The top 10% (income above $133,445) paid 21.25% and carried 70.88%. The top 25% ($77,714) averaged 17.83% and carried 86.78% of the total taxes paid.

Altogether, the top 50% (above $38,173) averaged an effective tax rate of 15.52%, carrying 97.25% of the tax load. The bottom 50%, meanwhile, averaged a rate of 3.45%, and paid 2.75% of all income taxes.

People between $133,445 and $188,996 income paid 13.73%, while people with income above $188,996 averaged a 23.61% rate. As you span down the middle class, the effective tax rate falls dramatically. Between the top 10% and 25, the average tax rate was 10.37%. Between the top 25% and the top 50%, the average rate was in fact 7.48%.

You seem to be operating on a false premise.

It gets better.

For all income levels below roughly $118,500 up to 2016, we can add an extra 6.2% by considering the OASDI FICA tax directly on incomes. This ignores the additional backshifting of the 6.2% payroll tax into lower wages. That means our 10.37% number becomes 16.57%.

With that logic, implementing a Universal Dividend at just 12.5% would bring the net effective tax rate at $6,300 in 2016 to -94.04%: the Government is paying this person $5,924. That is for a single earner, not a joint filer--who is getting roughly $11,000 instead.

The earner at $97,000 sees an effective tax rate drop of about 1.33%, while the earner at $196,000 sees an increase of 0.11%. We can easily adjust that increase out: the earner at $420,000 sees an effective tax rate decrease of 0.37%, and the top tax bracket falls to 36.2% from 39.6%. Obviously, that 3.4% marginal cut is going to decrease the effective rate cut on the wealthiest, and adjusting it back out will thus leave them with taxes no lower than whence they began, while allowing us to adjust the upper-middle-class back to a net-positive outcome.

We can move the OASDI payroll tax to the top to keep retirement and disability benefits funded--and solvent. Altogether, this produces a 42.2% top tax bracket, plus any adjustments to patch up that slight dip in the upper middle class and generally smooth out our effective tax rate progression. Alternatively, we can just wait, as that dip all but vanishes by 2017, and is net-positive well before 2020.

In case you're curious, we can fully fund univers

Re:But I Don't WANT One.

[Rei]

Not as flexible as gas or diesel.

I have no clue what you mean from that. You can charge an EV from any source of power, delivered from any socket, anywhere. The comfort of your own home. A campsite. A farmhouse in the middle of nowhere. You name it.

Shorter Range.

Model 3 LR goes further in city driving than its performance and size equivalent from BMW, the 340i. Furthermore, unlike gasoline vehicles, EVs start every day "filled up". A gasoline vehicle at any point in time will average only slightly more than half a "charge", and some days you'll start out with very little "charge" remaining at all.

Tied to a credit card

Huh? One, every charging network has its own payment method, and two, how do you pay for gasoline? Are you still one of those cash people who walks into the station every time?

And they sound like vacuum cleaners.

Now I have to doubt that you've ever even been in an electric vehicle.

Why the snark?

[cascadingstylesheet]

Pity the utility company.

Why the snark?

Humans work for utility companies, and humans own stock in them.

Why shouldn't those humans be concerned about making enough money?

Re:But I Don't WANT One.

[Rei]

That's why I've always used gasoline-powered phones (the vibration on them isn't that loud, manufacturers have gotten good at muffling it). I just drive down to the store at regular intervals and wait outside while they fill it up, it doesn't take long. You'd think it'd be annoying having to go out of your way to fill it up your phone, but you get used to it. People say, "Oh, but you can't charge in the comfort of your home, like you can with a battery-powered phone", but I can't see why that's so appealing.