New Car 'Green' Tax Opposed by Environment Minister Cohen

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New Car 'Green' Tax Opposed by Environment Minister Cohen

Post by Troy McClure on Sun 31 Aug 2008, 11:26 pm

From Channel Online:
Senator against planned new car tax


Plans for an extra tax on new cars is being strongly opposed by Environment Minister Freddie Cohen.

The Council of Ministers want to raise two million pounds through a vehicle emissions duty. The cash will be used to subsidise home insulation and other energy saving projects. It will also pay for more public transport and more recycling initiatives.

But Senator Cohen, who strongly supports those moves, believes funding should come from increasing cash limits. He says that with GST only introduced a few months ago it is not an appropriate time to introduce any new taxes.

Senator Cohen also believes the tax could lead to additional pollution as people would hang on to older, less efficient vehicles. He also points out that the public have already said that if an environmental tax is needed the most effective way would be a small increase on road fuel.

The Senator has put in amendments to the business plan for next year to halt the planned new tax. He gives the following reasons:

1. We have only just introduced GST and this is not an appropriate time to introduce any new taxation.

2. The recently introduced GST on new motor cars will raise approximately £2m per year which is coincidentally a similar sum to the proposed environmental initiatives expenditure. Thus it can be considered that the GST raised on the sale of new cars can notionally be regarded as funding the proposed environmental initiatives. An alternative could be to consider formally hypothecating the GST receipts on new cars for the purposes of funding environmental initiatives.

3. The introduction of the proposed new tax, in addition to the recently introduced GST, would effectively double tax the purchase of new cars.

4. Any well designed environmental tax must satisfy two criteria. The first being that it taxes a genuinely environmentally negative action. The second is that all the funds raised are applied to environmentally positive initiatives.

5. The purchase of a new car is not in itself an environmentally negative action. In fact it can be argued that increasing the price of new cars will encourage the retention of older less efficient motor cars.

6. The current proposal compounds the potentially negative environmental impact of the new tax by proposing that the tax will be discounted by up to 60% on the importation of second-hand cars. This will provide an incentive to import older less efficient motor cars likely to have a more damaging environmental impact.

7. During 2007 I consulted the public on the concept of introducing an annual Vehicle Emissions Duty. Respondents clearly sated that if an environmental tax was to be introduced they would prefer that it be raised by levying a small duty on road fuel.

8. The burning of fossil fuels constitutes the negative environmental impact of using a motor vehicle and therefore if an environmental tax were to be introduced at a future time the most logical for of taxation would be a small duty on motor fuel. In this way the tax paid would be directly related to the negative impact burning hydrocarbon fuel has on the environment.

9. Consideration of the implementation of a new environmental tax based on a small duty of road fuel could be considered later in 2009 and this could be used to fund the proposed and further environmental initiatives. This would depend on the economic circumstances and fuel prices prevailing at the time. At that time if it was felt that economic circumstances could allow this we should consult with the public on the concept of introducing a small fuel duty on the basis that the receipts were hypothecated for environmental initiatives.

10. The JEC have generously agreed to contribute £500,000 to start the environmental fund providing this is matched by the States. The Council of Ministers proposition is to raise £2m to be added to the JECís £500,000 one off grant, making a total fund of £2.5m for the year. The environmental initiatives are laudable and I am fully supportive of the expenditure however I believe they should be funded, at least initially, by increasing cash limits and regarding the £2m likely to be raised through GST as notionally funding the environmental initiatives, with formal hypothecation being an option for further consideration.

11. Funding these environmental benefits by raising cash limits without initially imposing new taxes will enable the public to see the environmental benefits being delivered and allow an informed public debate at a later time on whether or not to consider implementing a small environmental fuel duty.

The financial implications of this amendment are self-explanatory and as mentioned above involve increasing overall cash limits rather than funding this expenditure through additional tax revenues. The amendment does not change the manpower implications of the Council's amendment
On the 11 arguments the Sen. makes I'll comment in order:
1. If any tax is a 'good' tax shying away from it because you've recently introduced a separate 'good' tax seems to me to show you as a weak leader, it's just not a good enough reason.

2. To say that the GST raised on vehicles currently is the same amount an therefore couldn't we just use that money for the purposes the new tax is designed to meet is another poor argument. Is he saying that the money raised by the GST isn't presently needed? then why charge it?

I also have a problem with any argument made using words I have to Google, it shows that he doesn't feel the need to make his arguments in a way to be understood by many of the electorate.

3. So? If both taxes are valid and worthwhile where's the problem? Could it not be said that an extension of this logic could show that me paying duty and GST on alcohol or fuel is double taxation?

4. Is he claiming that car ownership isn't environmentally negative? Well as the Sen. has bought himself a very nice V8 Jaguar I guess he doesn't. But then how can he support duty on alcohol using the same logic; why tax something that does no harm?

5. No, but this is a very similar argument to 4. and it's avoiding the simple notion that the assumption of the new tax would be to encourage people to buy more environmentally friendly cars. Of course the Sen. traded up to his Jag from a Kia.

6. A valid argument, but hardly insurmountable, call for a simple amendment rather than oppose the concept.

7-9. All seem to tackle the same issue, why keep repeating it? Yes, I too think that a consumption tax is better, always have, as has the majority of people I speak to... so why haven't you done anything about it Mr V8 Jag driver?

10. This is just argument 2. again? What's the JEC's donation got to do with anything to do with taxation??

11. Nonsense! "Lets pay for new initiatives through taxes which were never budgeted to pay for them, before informing the tax paying public that we need to introduce a new tax to go on paying for them in the future"



It's not that his decision is flawed that bothers me, I agree that a rise in road fuel duty is the best way to fund any taxation to be used to offset the damage to the environment from the use of road vehicles, it's that he tries to sell it to people in such an insulting way. Why use such ridiculous empty arguments or try to baffle people with impressively long words? Just tell us what you honestly think and why, clearly and concisely.

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Re: New Car 'Green' Tax Opposed by Environment Minister Cohen

Post by GD on Mon 01 Sep 2008, 2:14 pm

"
The rate would range from £0 to £1250, depending on the emission rate of the car. A 2lt Ford Galaxy would pay £1,000 on registration, but a 1.8lt Ford Fiesta would pay only £40."

There seems no logic to the rate at all, from what I beleive the Galaxy gives us less emmissons than the Fiesta.

One day they might get it right?


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Re: New Car 'Green' Tax Opposed by Environment Minister Cohen

Post by Troy McClure on Mon 01 Sep 2008, 2:29 pm

GD wrote:"
The rate would range from £0 to £1250, depending on the emission rate of the car. A 2lt Ford Galaxy would pay £1,000 on registration, but a 1.8lt Ford Fiesta would pay only £40."

There seems no logic to the rate at all, from what I beleive the Galaxy gives us less emmissons than the Fiesta.

One day they might get it right?
The Galaxy is a 5+2seat vehicle, the Fiesta is a 5seat vehicle; both are reasonable vehicles for our island giving different families needs. While I don't think they should be exempt from tax I feel they should be reasonable taxed, and the fairest most reasonable tax would be a consumption tax, a levy on road fuel.

However, from a environmental point of view I see no reasonable case that can be made for a 200mph 2seat sports car that is wider and longer than either of the family cars. I'd like to see importers of motor vehicles have to apply for and obtain a license to import certain models, and if refused as pointless and unnecessary, but somebody still want the vehicle that badly, then the tax should be astronomical.

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Re: New Car 'Green' Tax Opposed by Environment Minister Cohen

Post by st_ouennais on Mon 01 Sep 2008, 4:50 pm

5. The purchase of a new car is not in itself an environmentally negative action. In fact it can be argued that increasing the price of new cars will encourage the retention of older less efficient motor cars.
Thats very dubious at best. It totally ignores the environmental impacts of the production of the new vehicle, and the disposal of old ones. Several car manufacturers have figures suggesting the equivalent of one third of the lifecycle energy, and by implication emissions, of a vehicle are in manufacturing and disposal.

Put another way its probably far more environmentally damaging to buy a new low emission vehicle only to drive 2 miles to the shops and back once a week, than to use your well maintained 30 year old car for the same.


Last edited by st_ouennais on Mon 01 Sep 2008, 4:56 pm; edited 1 time in total (Reason for editing : .)

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Re: New Car 'Green' Tax Opposed by Environment Minister Cohen

Post by Nick Palmer on Thu 04 Sep 2008, 4:53 pm

st_ouennais wrote:
Put another way its probably far more environmentally damaging to buy a new low emission vehicle only to drive 2 miles to the shops and back once a week, than to use your well maintained 30 year old car for the same.

Yup, ignoring the environmental costs of manufacturing, transport etc of new vehicles is leading people to come up with very inappropriate policies. A well maintained older car, used less than a new Prius still has less of an overall energy/pollution impact. If the older car gets to the end of its useful life and has to be replaced anyway, then in that situation a green car could be the way to go
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Re: New Car 'Green' Tax Opposed by Environment Minister Cohen

Post by Nick Palmer on Thu 04 Sep 2008, 4:55 pm

st_ouennais wrote:
Put another way its probably far more environmentally damaging to buy a new low emission vehicle only to drive 2 miles to the shops and back once a week, than to use your well maintained 30 year old car for the same.

Yup, ignoring the environmental costs of manufacturing, transport etc of new vehicles is leading people to come up with very inappropriate policies. A well maintained older car, used less than a new Prius still has less of an overall energy/pollution impact. If the older car gets to the end of its useful life and has to be replaced anyway, then in that situation a "green" car could be the way to go (if you can't face biking everywhere!).
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Re: New Car 'Green' Tax Opposed by Environment Minister Cohen

Post by Troy McClure on Fri 19 Sep 2008, 12:09 pm

Well the Minister got his way, and there'll be no new car tax. The odds are that the tax will be raised against consumption with a tax on road fuel, and in my opinion that is the right result. :)

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