This tax is set to expire in 2022 but this year voters get to decide whether to make it permanent. WebIn order to calculate your total speeding ticket costs do the following: 1. See Congressional Budget Office,The Highway Trust Fund and the Treatment of Surface Transportation Programs in the Federal Budget, June 11, 2014,http://www.cbo.gov/sites/default/files/45416-TransportationScoring.pdf. Toll payments are excluded from the calculation. While 36 states have increased motor fuel tax rates over the last decade, the federal government has not updated the gas tax since 1993. Tolls [13] Laura Bliss, Should Electric Vehicle Drivers Pay Per Mile? Bloomberg, July 23, 2019, https://www.bloomberg.com/news/articles/2019-07-23/why-charging-electric-cars-for-road-use-is-tricky. To solve the issue, some states find other funding sources outside motor fuel taxes. WebHighway Use Fee and Mileage-Based User Fee Program Chapter Create a Report Print Search Chapter Chapter 7. Like most laws passed in Virginia, it will take effect on July 1. Many cars are not using gas at all, such as electric, so that system of highway finance has been coming apart for a long time, said Jonathan Gifford, director of George Mason Universitys Center for Transportation Public-Private Partnership Policy in Arlington. This has the effect of reducing the value of a nations gas tax levy in American dollars, making reductions in gas taxes across the OECD look larger in magnitude than they were. Americas highways are largely funded by state, local, and federal motor fuel taxes. WebVirginia Toll Calculator Looking to calculate tolls for a road trip on Google Maps? Despite inflation, the federal gas tax rate has been locked in at 18.4 cents per gallon since it went up from 14.1 cents in 1993, meaning theres less money to fund highway improvements. The amount of state and local road spending covered by gas taxes, tolls, user fees, and user taxes varies widely among states. Virginia If we look at a simple metricstate tax collected per VMT, illustrated belowit shows that revenue has been relatively flat for the last two decades but has decreased sharply since the 1970s. ISSUE BRIEF: EDITION 3 UPDATE 3. This is, however, not the case, as shown in Table 3: Almost every state spends more on highways than they collect in dedicated revenue from federal, state, and local sources. Excise taxesare commonly levied on cigarettes, alcoholic beverages, soda, gasoline, insurance premiums, amusement activities, and betting, and typically make up a relatively small and volatile portion of state and local and, to a lesser extent, federal tax collections. [49] Federal Highway Administration, Why Does the Interstate System Include Toll Facilities? Sept. 8, 2017, https://www.fhwa.dot.gov/infrastructure/tollroad.cfm. 0000004009 00000 n
The future of funding for Americas highways has been the topic of much political discussion for decades. At the same time, the sale of cars dropped from above 60 percent to under 45 percent. The Virginia Department of Motor Vehicles is currently fielding requests from private contractors to operate the program, which it anticipates rolling out in July 2022. 0000039786 00000 n
[36] United States Government Accountability Office, Highway Trust Fund: Pilot Program Could Help Determine the Viability of Mileage Fees for Certain Vehicles, December 2012, 19, https://www.gao.gov/assets/660/650863.pdf. In the contiguous 48 states, Tennessee could wholly cover spending with dedicated transportation revenues (100 percent), while North Dakota only raises less than a quarter of the revenue required to pay for transportation spending (23 percent). On average, VA speeding tickets cost between $350 to $400 if you include taxes and other fees. [51] Ballotpedia, Arkansas Transportation Sales Tax Continuation Amendment (2020), accessed July 27, 2020, https://ballotpedia.org/Arkansas_Transportation_Sales_Tax_Continuation_Amendment_(2020). In 1994, a passenger car averaged 20.7 miles per gallon (MPG) and drivers paid 3.2 cents in state and federal tax per VMT. [8] Amir El-Sibaie, Electric Vehicles Will Have a Long-Term Impact on the Gas Tax, Tax Foundation, Feb. 12, 2018, https://taxfoundation.org/electric-vehicles-gas-tax/. On board unit measuring and transmitting VMT, Given the difficulties surrounding a universal VMT tax, one short-term solution may be to levy a simple VMT tax on commercial vehicles and EVs. A vehicle-miles-traveled or mileage-based user fee approach ultimately makes a lot of sense, Stanford said. E-ZPass $4.00. The tax base is the total amount of income, property, assets, consumption, transactions, or other economic activity subject to taxation by a tax authority. 0000001643 00000 n
Toll payments are excluded from the calculation. 5, 2015. https://taxfoundation.org/options-fix-highway-trust-fund/. In addition to a vehicle's combined MPG rating, two other factors are considered when calculating highway use fees: (1) the fuels tax rate at the time the vehicle is registered, and (2) the average number of miles traveled by a passenger vehicle in Virginia. That means the rest of the expenditures are covered by non-transportation-related tax revenues (see Table 3) collected from people who may not use the roads, or activity not related to road use. This is no new idea; it simply represents a return to tradition. [31] This system requires motorists to keep receipts for fuel purchases to guarantee the accuracy of the tax credit, though it is not mandatory. If you need help with the Public File, call 540-512-1558. As vehicles continue to improve in fuel economy and EVs become more common, a VMT tax represents a natural solution to funding highway projects in the future. Another issue arises if a state imposes a VMT tax but does not have a federal VMT tax system to piggyback on. Determine court costs. JavaScript must be enabled in order for you to use DMVNow in standard view. Given that highway spending has not declined in line with revenues, motor fuel tax revenues are no longer matching expenditures. These measures are more critical now than ever as we move into the Commonwealths economic recovery from the COVID-19 pandemic and build our shared future together.. For more details, please visit the Highway Use Feeinformation page. [37] Use of GPS in Oregon is voluntary to alleviate privacy concerns, though a voluntary system can only work in parallel with a gas tax, which is not a permanent solution. Drivers frustrated by highway use fee in Virginia As an example, Washington, D.C. welcomes hundreds of thousands of daily commuters from neighboring states (mainly Maryland and Virginia) and should be compensated for the wear-and-tear on their infrastructure. Exemptions from Highway-Use Tax DMV officials said that some may now start to see the additional fee because its also a part of getting your vehicle registration in the Commonwealth. [41] Kentucky has a flat rate of 2.9 cents per VMT for combination trucks weighing above 60,000 pounds. Duke Carter returned to 10 News in January 2022. This could potentially be accomplished by using standard traffic data to approximate the amount owed by commuter states to destination states. Note: Revenue includes motor fuel taxes, motor vehicle taxes, and highway fees. A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates. Figure 8 is a map showing the percentage of state highway spending that could be covered by dedicated funds. [17] United States Environmental Protection Agency, The 2019 EPA Automotive Trends Report, 8. Cash/AET $4.00 Electric vehicles pay a flat fee ($88.20 go from $45.75 to $35.75, Pickup and panel trucks 6,501 to 10,000 lbs. 0000010812 00000 n
Itis sometimes referred to as a hidden tax, as it leaves taxpayers less well-off due to higher costs and bracket creep, while increasing the governments spending power. The motor fuel tax is a relatively well-designed tax which acts as a user fee by raising revenue to fund the highway system. The following vehicles are exempt from the HUF: See Code of Virginias Highway Use Fee page for a full explanation. [11] The U.S. Energy Information Administration estimates that gas consumption will decline 19 percent through 2050.[12]. [36] Nonetheless, there may be ways to mitigate this. For vehicles you first use on a public highway in July, file Form 2290 between July 1 and August 31. Location tracking would also allow states to levy taxes on all driving within the stateregardless of the home state of the vehicle. The federal motor fuel excise tax has been levied since 1932. [38] United States Government Accountability Office, Highway Trust Fund: Pilot Program Could Help Determine the Viability of Mileage Fees for Certain Vehicles, 19. To address the latter, a paper from the RAND Corporation, a nonprofit think tank, suggested making a third party responsible for the mileage data or having multiple vendors offer metering devices to give customers a choice. [3] Congressional Budget Office, Highway Trust Fund AccountsCBOs Baseline as of March 6, 2020, Mar. In fact, according to the CBO, in real terms, public maintenance purchases decreased 9 percent between 2003 and 2014 even though nominal spending increased 44 percent. Such a system could potentially also be levied on EVs by taxing battery charges based on the minimum distance an EV can drive on a full charge. Then, multiply the car price by the 0000015208 00000 n
Externalities can be caused by either production or consumption of a good or service and can be positive or negative. Virginia The average tax rate is the total tax paid divided by taxable income. Implementing a rate schedule as in Table 2 would represent a tax increase on consumers and businesses, since it is calculated to cover all transportation funding, which current transportation taxes fail to do. For instance, if every single motorist is liable to pay their own taxes to the government, the effective number of taxpayers would grow considerably compared to todays system. Effective July 1, 2020, Virginia Code 46.2-772 authorizes the Highway Use Fee (HUF) to be charged to electric and fuel-efficient vehicles, and is collected at the time 0000004286 00000 n
While many states have increased motor fuel tax rates over the last decade, the federal government has not updated the gas tax since 1993. This paper explores a potential long-term solution for redesigning transportation taxes to embody the user fee principle once again. Carpenteri was surprised to receive a notice for a $150 highway use fee when he had to renew his car registration last month. Highway Use Fee and Mileage-Based User Fee Program [6] American Petroleum Institute, Gasoline Taxes, July 2020, https://www.api.org/~/media/Files/Statistics/State-Motor-Fuel-Taxes-Charts-July-2020.pdf. While maintenance costs of driving in the city or in the country may not differ substantially, the externalities connected to urban travel may be higher: contribution to air pollution and congestion in particular. Any customer whose credential expired between March 15 and May 31 gets 90 days from the expiration date to renew, and credentials expiring from June 1 to July 31 have until August 31 to get renewed. Heres a breakdown of the new registration fees that will go into effect on July 1: Passenger Vehicles 4,000 lbs. While marginal tax rates show the amount of tax paid on the next dollar earned, average tax rates show the overall share of income paid in taxes. 901 0 obj
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States have an added complication regarding out-of-state drivers if no federal system exists. 0000006132 00000 n
[18] U.S. Energy Information Administration, Annual Energy Review 2012, Sept. 27, 2012. https://www.eia.gov/totalenergy/data/annual/showtext.php?t=pTB0208. How to Calculate Virginia Sales Tax on a Car. Led by the DMV, a workgroup tasked with developing the program is slated to deliver an interim report to the Commonwealth thisDecember. "Fuel-efficient vehicles" are defined as vehicles that have a combined fuel Source: Bureau of Transportation; authors calculations. The highway use fee (HUF) helps make up for the fuel taxes that drivers with fuel-efficient and electric vehicles spend less on, because theyre not using as much fuel. Figure 7 is a graph showing the MPG by vehicle type by year that illustrates the big jump in the late 1970s. [45] According to the CBO, a 1-cent increase in the gas tax increases revenue by $1.5 billion over 10 years. President Ronald Reagan once observed that [o]ur countrys outstanding highway system was built on the user fee principlethat those who benefit from a use should share in its cost.[4] The technological developments, mentioned above, mean the time may have come for lawmakers to revisit who should pay for the roads, and how they should do so. If a state is alone in levying a VMT tax, a number of other issues appear. [5] The average state excise tax rate in 2020 is 25.6 cents, but gasoline is taxed at an average rate of 36.4 cents per gallon when other taxes are included. [16] Additionally, MPG in new cars actually declined between 1985 and 2005. Information from E-ZPass, an electronic toll collection system, has been used by divorce lawyers to prove unfaithful spouses.[39]. [46] Kyle Pomerleau, Options to Fix the Highway Trust Fund, Tax Foundation, Mar. xref
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Any customer who has a vehicle registration expiring in July and later will see the fee reduction reflected in their renewal notices, though, due to COVID-19, all driver's licenses and identification cards expiring on or before July 31, 2020, get extensions, to August 31 at the latest. WebThis can be done using our updating tool, by email, by phone at 703-222-8234 [711 TTY], or in person at the Government Center. Officers with the Fairfax County Police, Live Fairfax is a bi-weekly column exploring Fairfax County. Virginia car registration renewal fee -- Highway Use Fee 0000010450 00000 n
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https://www.dmv.virginia.gov/vehicles/#HighwayUse_fee.asp. Virginias program will be modeled off of the approaches adopted by those states. Adjusted for inflation, that would be approximately $17.7 billion in 1994 (the first year after the last gas tax increase). [33] A solution would need to be devised for at-home charging stations. One report has EVs making up 17.5 percent of sales in the U.S. by 2028, and this could be devastating to tax collections. 31, 2020. https://www.nhtsa.gov/laws-regulations/corporate-average-fuel-economy. WebThe Virginia Department of Transportation (VDOT) is responsible, under 56-468.1, for calculating the monthly fee per access line and reporting it to all affected localities and DMV Fees [9] This means that the motor fuel tax would ideally tax drivers based on the proportionate damage they do to the roads, among other externalities. One potential solution that would reestablish the user fee systemis to levy a taxon vehicle miles traveled (VMT). Note: Passenger cars includes both smaller vehicles as well as SUVs, vans, and pick-up trucks. Those expiring in June are extended for 60 days and those expiring in July are extended for 30 days. The regional transient occupancy tax is raised from $2 to $3.The bill authorizes the use of transportation bonds to complete the final section of Corridor Q of the Appalachian Development Highway System, and authorizes a bond issuance for improvements in the Interstate 81 and Interstate 66 corridors.The bill establishes a new A driver must only pay this if they are registering a fuel-efficient vehicle or an electric motor vehicle. If the VMT tax would fund the transit account, as the gas tax has, expenditures would total $55 billion, and the rate would have to be 1.7 cents per mile. Motor fuel taxes also act as a user fee where the amount of fuel purchased acts as a rough proxy for a drivers contribution to road wear-and-tear. According to a statement from the Virginia Department of Motor Vehicles (DMV), the transportation package was meant "to create sustainable funding for transit, rail, and roads, invest in systemic safety improvements, and support a multimodal system in Virginia.". [32] Congressional Budget Office, Reauthorizing Federal Highway Programs: Issues and Options, May 2020, 6, https://www.cbo.gov/system/files/2020-05/56346-CBO-Highway-Reauthorization.pdf. Use The Toll Calculator For A Specific Trip Toll Calculator Otherwise, if you are traveling the full length of the Chesapeake Expressway, these tolls currently apply for the following vehicle classes: Toll as of May 1, 2021. In 2018, a passenger car averaged 24.4 MPG and drivers only paid 2.1 cents per VMT. The next section makes a case for why motor fuel taxes require an update by analyzing the development of motor fuel tax revenue expressed in cents per mile traveled. [29] Basing the rate on weight per axle encourages commercial truckers to limit weight per axle. [30] That means the state continues to collect gas taxes on all motorists and offers a tax credit for fuel taxes paid. Drivers could opt into the voluntary system in lieu of paying a mandatory highway use fee that first took effect on July 1, 2020. See OReGO, Get started FAQ.. Enrollment now open for DMVs new Mileage Choice Virginia Speeding Ticket [1] Liz Malm, When Did Your State Enact Its Gas Tax? Tax Foundation, July 30, 2015, https://taxfoundation.org/when-did-your-state-enact-its-gas-tax/. The actual rate per vehicle should be differentiated based on weight per axle. The bill also lowered vehicle registration fees by $10 and repealed an annual $64 fee for electric and alternative fuel vehicles. The higher rates for buses and commercial traffic represent the greater road damage caused by these vehicles, similar to the existing differentiated rates on gasoline and diesel. Look to your summons to determine code section. These taxes are levied in a few ways, including per-gallon excise taxes, excise taxes imposed on wholesalers, and general sales taxes that apply to the purchase of gasoline. The fee schedule for the mileage-based user fee program shall be calculated by dividing the amount of the highway use fee as determined pursuant to subsection B of Suite 950 2020. https://taxfoundation.org/cigarette-tax-revenue-tool/. The HUFs calculation is based on: The vehicle's fuel efficiency The fuel tax rate at the time the vehicle was registered The average number of miles driven See Code of [28]. [2] With the current funding program, the Fixing Americas Surface Transportation Act (FAST Act), expiring this year, Congress must decide how to pay for the Highway Trust Fund in the years to come. For instance, having a private third party gather and own the data would keep personal data at an arms length from the authorities. The Tax Foundation is the nations leading independent tax policy nonprofit. Tractor trailers and heavy-duty trucks also contribute significantly to overall road damage given their weight. Heres a breakdown of the new registration fees that will go into effect on July 1: Motorhome registration fees stay the same. The following table presents VMT tax rates for each state which would raise the same amount of revenue as the current state and local motor fuel taxes, motor license taxes, and highway fees. The According to a press release from Transurban, the study is being funded by the U.S. Department of Transportation, and the company is currently looking to recruit 400 participants for the three-month pilot. The picture is not as bleak for state highway funds. Absent these adjustments, income taxes are subject to bracket creep and stealth increases on taxpayers, while excise taxes are vulnerable to erosion as taxes expressed in marginal dollars, rather than rates, slowly lose value.
[19] U.S. Energy Information Administration, Light-Duty Vehicles, Short Wheelbase Fuel Economy, Annual, accessed July 2020, https://www.eia.gov/opendata/qb.php?category=711246&sdid=TOTAL.PCFRRUS.A. In total, 25 states divert a significant amount of revenue raised from motor fuel taxes to unrelated spending programs like education (Kansas and Texas), tourism (Utah), or wildlife conservation (Florida). Specific drivers must pay additional fees, like those who own electric vehicles or cars that get 25 or more miles to the gallon. All rights reserved. Looking at total gas tax collections illustrates this decline. The only exceptions are Hawaii, Idaho, and Tennessee. [18] In 2018, a passenger car averaged 24.4 MPG, and drivers paid 2.1 cents in taxes per VMT. Dulles Greenway (Route 267) Dulles Toll Road (Route 267) Powhite Parkway Extension (Route 76) RMA Expressway System Pocahontas 895 (Route 895) George P. Coleman Bridge (Route 17) Chesapeake Bay Bridge Tunnel (Route 13) Chesapeake Expressway (Route 168) According to the CBO, returns on private investment will be twice as large as federal investments. Mileage-Based User Fee Program When the new fee system was implemented last year, that worked out to $109 for electric vehicles and about $19 for a typical fuel-efficient vehicle, based on the 11,600 Vehicle Miles Traveled (VMT) Tax | Highway Funding | Tax .) jhh{v$Fyw3?0$OEY
0\4!yl7R [49] Hence, they can also be structured with regular payments from government to the private company financing highway projects. The consultant KPMG previously estimated that Virginia would lose nearly 33% of its gas tax revenues by 2030 due to fuel efficiency, or approximately $260 million. WebVirginia Speeding Ticket Court Costs Court costs for Speeding tickets (also known as Processing Fees) are $62.00 for the first traffic ticket and $11 for each additional charge with the same court date. how to calculate virginia highway use fee Based on Figure 1, states have done a better job of keeping rates in line with inflation than the federal government. [13] However, one forecast suggests EVs may comprise 17.5 percent of U.S auto sales by 2028. For instance, in a non-tracking system, drivers that live in Michigan but work in Illinois would only pay the tax in Michigan even though they drive in both Michigan and Illinois. In 1956, the rate was increased to 3 cents and the Highway Trust Fund was established to fund the new Interstate Highway System. [1] Today, a combination of increased fuel economy, growth in sales of electric vehicles (EVs), and inflation has raised questions about the sustainability of these taxes as a funding mechanism for the transportation system of the future. Vehicle registrations that expire in March, April, and May are also extended for 90 days. This year, I introduced a bill that Virginians arent forced to buy an electric vehicle, this entire idea of alternative tax for these individuals is just wrong, Newman said. When fuel prices started to rise, I thought maybe it was the right thing to do, Carpenteri said. New law means lower vehicle registration fees in Virginia, but added highway use fee, Passenger Vehicles 4,000 lbs. 4. Private investment can be designed in several ways, including as toll roads, that guarantees the investor a revenue stream. The first levy was 1 cent per gallon and was originally a deficit-reduction measure following the Great Depression. 0000001016 00000 n
[28] Garrett Watson, Americas Gas Tax Falls Further Behind OECD Peers When Controlling for Exchange Rates, Tax Foundation, May 24, 2019, https://taxfoundation.org/federal-gas-tax-falls-behind-oecd-peers/. The development of state tax revenue per VMT indicates that most states have continuously increased their gas tax rates to keep up with inflation since the mid-1990s. Oh, but they just raised taxes on fuel - quite considerably I might add. 0000024572 00000 n
A Pigouvian tax, named after 1920 British economist Arthur C. Pigou, is a tax on a market transaction that creates a negative externality, or an additional cost, borne by individuals not directly involved in the transaction. There are sort of workarounds where you plug a device into the data port of your car, Gifford said. [26], When compared internationally, and controlling for exchange rate fluctuations, Americas gas tax has fallen, since 2013, behind its peers in the Organisation for Economic Cooperation and Development (OECD). Thirty countries experienced declines in their gas tax levies in U.S. dollars. [20], Breaking those numbers down at the state and federal level, the federal tax burden per VMT totaled 1.51 cents in 1994 versus 0.75 cents in 2018 , and the average state tax burden totaled 1.72 cents in 1994 versus 1.38 cents in 2018 (all in 2018 dollars).[21]. 0000012903 00000 n
Official NCDMV: Exemptions from Highway-Use Tax Exemptions from Highway-Use Tax Vehicles titled in North Carolina may be exempt from the highway-use tax under the following circumstances: An insurance company is obtaining a salvage title for a vehicle on which a total loss claim was paid 2 Axles - Car, Motorcycle, SUV, Van, Pickup E-ZPass $4.00 Invoice $4.00 3 Axles - includes any trailer E-ZPass $8.00 According to the CBO, a federal 5-cent per mile tax on commercial trucks would have raised between $4 billion and $13 billion in 2017 depending on type of trucks and roads taxed. Increased fuel economy is a positive development, but we should acknowledge that it undermines the current road funding regime and requires that policymakers adjust that regime moving forward. The highway use fee is calculated based on the gas tax rate at time of vehicle registration and average VMT in Virginia. Code of Virginia Code - Chapter 7. Highway Use Fee and To address these concerns, any increase in the gas or VMT tax would be best offset by a tax cut of an equal dollar amount.[46]. Virginia hits gas pedal on plans to fund infrastructure with These increases do not happen in a vacuum and would hurt the economy as a whole as well as disproportionately tax the bottom quintiles of income earners. The same paycheck covers less goods, services, and bills. Click here to take a moment and familiarize yourself with our Community Guidelines. taxes.js?container_id=buzzsprout-player-5817529&player=small" type="text/javascript" charset="utf-8">. While including more parameters into the calculation of the tax rate could yield some positive results, it should probably only be pursued up to a point. Maximum speed limits in highway work zones; penalty 46.2-878.1; 1325 G St NW WebA vehicle registered under the International Registration Plan (IRP) How is the HUF calculated? 0000009761 00000 n
[2] Carl Davis, How Long Has It Been Since Your State Raised Its Gas Tax? Institute on Taxation and Economic Policy, Feb. 26, 2020, https://itep.org/how-long-has-it-been-since-your-state-raised-its-gas-tax-maps/. They do not estimate the appropriate differentiation between heavy and light vehicles. A sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. HA @s 0000008863 00000 n
On the contrary, it is likely to get worse, driven by technological advances and regulation like theCorporate Average Fuel Economy (CAFE) standards. A VMT tax could be implemented by either levying a flat fee per VMT or developing an advanced tracking system with different rates for different locations. This behavior is consistent with other narrow-based excise taxes like cigarette taxes. On both a federal and a state level, imposing a VMT tax does require lawmakers to make some hard decisions on trade-offs. Tax revenues per vehicle mile traveled (VMT) are decreasing in real terms while expenditures are increasing in real terms. [51] If Arkansas lawmakers want to adhere to the benefit principle, it would be appropriate to raise the revenue through transportation-related taxes instead. [34] From 2022, Virginia plans to implement an optional VMT tax for vehicle owners subject to the Highway Use Fee. The working group is identifying all requirements to Virginias mileage-based user fee program with a priority on consumer privacy protection and equity, DMV spokesperson Jessica Cowardin said in a statement. Utah also has a program where electric and hybrid vehicle users can pay fees based on their road usage instead of a flat alternative fuel vehicle fee instituted in 2018. WebThe annual highway use fee will be updated yearly on July 1. In fact, it climbed from 15 percent to 46 percent between 1996 and 2018. Va. Code 46.2-770, 46.2-771, 46.2-772, and 46.2-773. Discrepancies between tax revenues and highway expenditures will get worse as fuel economy improves, if tax rates are not indexed to inflation, or if share of electric vehicles (EVs) grows.