Apparently raising taxes on drivers makes Republicans say really silly things. When Governor Daugaard wanted to raise our gasoline tax, he had to say silly things like “restore the purchasing power of the gas tax.”
Yesterday it was Republican tax-hiker Mary Duvall who had to euphemize. Pitching her new $100 annual tax on electric cars and $50 tax on hyrbids (House Bill 1241), the Pierre Representative told House Transportation that we charge drivers 28 cents per gallon of gasoline or diesel to obtain 58% of our road funding. Alas, “a subset of vehicles”—electric and hybrid cars—”are not making this contribution to the state’s infrastructure.” Rep. Duvall says she wants to “provide an opportunity for those electric vehicles to contribute….” Stung by an opponent’s charge that HB 1241 penalizes electric car drivers, Rep. Duvall said, “The single opponent used the word penalize; I prefer to use the word equalize. This is an issue of fairness. There’s a group of cars that are using our roads but they’re really not helping pay their fair share of the way.”
Now I get it: when I advocate a trust tax and a progressive state income tax to replace our regressive sales tax on food and other necessities, I need to reframe it as an opportunity to contribute: “A certain subset of our population is not making a contribution to the state’s transportation, education, public safety, and regulatory infrastructure commensurate with the benefits they receive. My reforms provide an opportunity for those trust beneficiaries and other millionaires to contribute and pay their fair share of the services they use.”
Rep. Duvall averred that her electric-car tax is not “capricious or punitive but… a measure of fairness.” Senator John Wiik (R-4/Big Stone City) testified that it’s not fair that he buys all sorts of gas for the big heavy four-wheel-drive truck he chooses to drive everywhere because it might snow while electric car drivers bypass the gasoline tax.
Matt McCaulley, lobbying for the Alliance of Automobile Manufacturers, offered a brilliant, detailed rebuttal that destroyed Duvall’s arguments on both practical policy and philosophical grounds. Firing up his slideshow, McCaulley noted that a Tesla driver already pays more taxes (via the excise and licensing taxes) to support our roads than does a driver of a standard gasoline-powered Honda CRZ. He said some all-gasoline cars get better mileage than similar hybrid models, meaning the drivers Duvall targets with this bill are already paying their fair share compared to drivers of similar cars. He said that electric cars made up 0.004% of the 922,000 vehicles registered in South Dakota in 2016 and thus aren’t putting any disproportionate drag on our road budget. (Earlier, DOT Secretary Darin Bergquist said HB 1241 would have raised just $276,000 last fiscal year.)
Most interestingly to me and to my fellow aficionados of Lincoln-Douglas debate, McCaulley appealed to the principle of “technology neutrality.” He said HB 1241 singles out one specific automotive technology for a tax while ignoring a variety of other technologies that automakers use to improve fuel efficiency (and thus evade fuel taxes). For instance, automakers are replacing steel with aluminum to make their cars lighter… so should the state impose a tax on vehicles with higher aluminum content? McCaulley said the government should not pick winners and losers in automotive innovation; instead, the government should adopt “technology neutrality” and allow automakers to decide what technology is best for maximizing fuel economy.
Rep. Duvall took rebuttal time but offered no real rebuttal. Instead of digging into the specific points McCaulley made, Duvall simply dismissed his data-driven analysis as a “distraction.” House Transportation rolled right along with her, merrily disregarding McCaulley’s superior policy argument, “technology neutrality,” and their own Republican low-tax party principles and voted 8–3 to advance HB 1241 to the House floor. (To their credit, Republicans Drew Dennert and Tim Goodwin joined Democrat Shawn Bordeaux in voting against this punitive tax.)
Matt McCaulley usually represents the corporate overlords whom I loathe and Republicans love. But yesterday’s committee vote on Duvall’s electric car tax shows Republicans will ignore corporate lobbyists and vote for higher taxes if it gives them a chance to punish South Dakotans who adopt green technology.