Business

06.11.13

North Carolina Punishes Owners of Gas Efficient Cars

It’s hard to see why else the state would propose a measure to lay a special tax on owners of hybrid and electric cars, writes Daniel Gross.

For a while there, North Carolina had progressives fooled. In 2008, its voters pulled the chain for President Obama (even if by a very narrow minority). The popular show Dawson’s Creek was filmed there. The ever-expanding Research Triangle drew thousands of out-of-staters who brought their Northeast modes of consumption and values.

But in recent years, the state has taken a few steps backward. Last fall, North Carolina reverted to form and voted for Mitt Romney. Voters also swept Republicans into the governorship and control of the state legislature. And they’ve set about slashing unemployment benefits, and taking a host of other nonprogressive actions. As Mary Curtis notes in The Washington Post, the new regime’s agenda has included: “the decision to reject federal funds to expand Medicaid, the reduction of state unemployment benefits, proposals that would cut funding from public education and provide vouchers for private schools, a voter ID bill, and efforts to restart the death penalty and repeal North Carolina’s Racial Justice Act.”

Now North Carolina’s legislators are going after another progressive favorite: hybrid cars.

What? The state Senate has passed a measure that would single out hybrid and electric car drivers for special treatment. (The House will consider the measure but hasn’t acted yet.) Here’s the reasoning. The state relies on gas taxes to fund highway construction. But gas consumption has been falling, in part because the American auto fleet has been getting more efficient. In effect, people who drive cars that get 50 miles per gallon are contributing only half as much to the upkeep of roads as people who drive cars that get 25 miles per gallon. And so the North Carolina Senate is suggesting that people who drive hybrids pay an extra $50 for the annual registration fee, and that folks who drive all-electric cars pay an extra $100. This Prius tax would raise about $1.5 million each year.

Of course, the government is punishing people who are making more efficient use of a polluting, scarce, and expensive energy source. But even if it were a good to punish efficiency, North Carolina would be missing the target by taxing only hybrids and electric cars. There has been a quiet revolution in the American (and international) auto industry in recent years. Thanks to innovations in materials, engines, and transmission systems, consumers now have a dozens of high-mileage vehicles to choose from: electric cars, hybrids, and plain old sedans and coupes. The manual Dodge Dart, for example, gets 39 miles per gallon. The 2014 Chevrolet Cruze Eco that runs on diesel will get 47 miles per gallon. In fact, there are plenty of hybrids on the market that get worse mileage than regular vehicles. The Ford Escape hybrid gets about 30 miles per gallon on the highway. The Chevrolet Tahoe Hybrid gets only 23 miles per gallon on the highway. The drivers of those hybrids are already paying their fair share for the upkeep of the state’s roads.

If the principle is that those who use less gas to get around should pay a disproportionate amount of tax, then the legislature should single out anyone who drives a car that gets above a certain number of miles per gallon. Or they could go the route of taxing people based on usage—effectively, a toll for the number of miles you drive.

North Carolina’s beef, it turns out, isn’t really with hybrids. It’s with more fuel-efficient cars, or, as others might describe it, with progress.