Filed under: Legislation and Policy
Guido Reinking: Germany should Just Say No to a CO2 tax
What makes the most sense to encourage sensible and environmental driving habits in Germany while not punishing people who buy high-end cars? Guido Reinking, the editor of Automobilwoche, writes in Automotive News (subs req'd) that vehicles should not be taxed when sold/bought, but that each liter of fuel should be stuck with a higher levy. Reinking writes: The burning of every liter of gasoline emits 2.32 kilos (about 5.1 pounds) of the presumed greenhouse gas CO2. The person using that liter should be charged accordingly. Benefits would accrue to anyone who may have a high-performance car in his garage but who uses his bicycle to go to the bakery or post office. The full-throttle fraternity pays extra, but anyone who drives reasonably and economically saves. This also could promote the purchase of second and third cars. Go shopping in the city in your Mini; go on vacation with the family in your 5 series or S class.
Is this guy working both sides of the car/environment debate or what? Give the environmentalists a little something while encouraging more car purchases. He also says that fuel in Germany, at about $6.75 a gallon, is still too expensive. There's much more in the original article. Check it out if you've got a subscription.
[Source: Guido Reinking / Automobilwoche]
Reader Comments (Page 1 of 1)
Scatter 2:21AM (8/31/2007)
"presumed greenhouse gas"? Strange way to put it. There's nothing presumed about it! Maybe some subtlety was lost in translation...
Reply
rgseidl 8:07AM (8/31/2007)
"He also says that fuel in Germany, at about $6.75 a gallon, is still too expensive."
I don't have a subscription to the article but the rest of your summary implies that Mr. Reinking actually feels fuel in Germany is still not expensive enough.
His proposal appears to be scrapping the vehicle license fee, which is currently based on engine displacement. There have been calls to base it on certified CO2 emissions in the NEDC instead. Mr. Reinking's argument is that this is essentially the same as taxing fuel consumption, in which case you might as well cut the bureaucratic overheads and switch to a tax strategy based on actual fuel consumption alone.
There are two things he glosses over:
(a) in Germany, vehicle license fees are one of very few taxes that the individual states (Laender) levy directly. By contrast, fuel tax revenue accrues to the federal ministry of finance.
(b) consumption-based taxes, by their nature, tend to hit poorer sections of the population hardest. Wrt fuel, the situation is not as extreme in densely populated Europe as it is in the US, where low-cost housing is often far removed from the jobs those living there have to commute to. However, German authorities did recently eliminate a tax break for commuters.
In summary, a politically more feasible and socially more neutral approach would be to cut general sales tax (currently 19% in Germany) while raising fuel taxes. Consumers could then "earn" a net tax cut by driving less, driving more efficiently and/or choosing a vehicle that gets better mileage.
Reply
rgseidl 8:08AM (8/31/2007)
"He also says that fuel in Germany, at about $6.75 a gallon, is still too expensive."
I don't have a subscription to the article but the rest of your summary implies that Mr. Reinking actually feels fuel in Germany is still *not expensive enough*.
His proposal appears to be scrapping the vehicle license fee, which is currently based on engine displacement. There have been calls to base it on certified CO2 emissions in the NEDC instead. Mr. Reinking's argument is that this is essentially the same as taxing fuel consumption, in which case you might as well cut the bureaucratic overheads and switch to a tax strategy based on actual fuel consumption alone.
There are two things he glosses over:
(a) in Germany, vehicle license fees are one of very few taxes that the individual states (Laender) levy directly. By contrast, fuel tax revenue accrues to the federal ministry of finance.
(b) consumption-based taxes, by their nature, tend to hit poorer sections of the population hardest. Wrt fuel, the situation is not as extreme in densely populated Europe as it is in the US, where low-cost housing is often far removed from the jobs those living there have to commute to. However, German authorities did recently eliminate a tax break for commuters.
In summary, a politically more feasible and socially more neutral approach would be to cut general sales tax (currently 19% in Germany) while raising fuel taxes. Consumers could then "earn" a net tax cut by driving less, driving more efficiently and/or choosing a vehicle that gets better mileage.
Reply