Surely making the user pay the full costs is a cost play! Even if it was possible to calculate the costs to an individual level, making road users, or the user of any government service pay the true cost of that service is a truly awful idea unless you think only the wealthy should be allowed to use the roads?It's not supposed to be a cost play. By having the user pay the true costs, their behaviours would be changed, as their decisions would be based on the cost to society in general.
If there are more 'external' costs to some vehicles / fuel types over another, it seems reasonable to use the tax system to encourage shift to those with less external costs.Surely making the user pay the full costs is a cost play! Even if it was possible to calculate the costs to an individual level, making road users, or the user of any government service pay the true cost of that service is a truly awful idea unless you think only the wealthy should be allowed to use the roads?
That's the point I made earlier, tweaking of taxation is a tool used to influence consumer choice, it's not intended to recover all costs associated with that choice.If there are more 'external' costs to some vehicles / fuel types over another, it seems reasonable to use the tax system to encourage shift to those with less external costs.
The inclusion of externalities in the pricing isn't to recover all costs, it's to enable the user to make a choice with all relevant factors included, with price signalling the full costs.That's the point I made earlier, tweaking of taxation is a tool used to influence consumer choice, it's not intended to recover all costs associated with that choice.
That's just not the case at all, in fact the exact opposite is the case for petrol versus diesel. If they were to change methodology to reflect externalities, cleaner petrol would not have an excise rate 19% higher than diesel. Same thing goes for motor tax, the dirtier diesel that results in a greater 'external costs' attracts a lower rate.The inclusion of externalities in the pricing isn't to recover all costs, it's to enable the user to make a choice with all relevant factors included, with price signalling the full costs.
The haulage industry lobby have been campaigning for years to keep diesel excise low, or seeking to reduce it. They often cite the risk to inflation of any increase being passed on to consumers in all the goods they buy.The cynic in me would suggest that the excise rates are set to offend the least number of people while at the same time keeping the money coming in.