Fuel Duty Or Highway Robbery?
Across
the Hudson River from New York, just a couple of miles through the Lincoln
Tunnel, you’re into the State of New Jersey. The Garden State has a Republican
Governor Chris Christie, who four or five years ago I had tipped to be the next
President of the United States of America. But times have changed; Governor
Christie is still as straight-talking and combative as ever, but a scandal also
over transport has hung a cloud over his tenure as Governor. On the orders of a
now-sacked member of his team, two of the three lanes on the George Washington
bridge were closed leading to chaos and gridlock, leading to speculation that it
might have been an act of political revenge against the Democratic Mayor of Fort
Lee, who didn’t support his re-election campaign.
Christie
does things unheard-of in the UK, like running balanced budgets year in, year
out. But the latest controversy shows just how different American politics is
from our own. The cost of a gallon of ‘gas’ (which, it seems to have escaped
every American’s notice, is actually a liquid) is around $2.15-$2.20 a gallon in
New Jersey if you’re prepared to shop around. Even at the current
historically-low exchange rates, we’re talking in the region of 46 pence a
litre.
It’s
possible because New Jersey fuel taxes are far lower than our own. In the United
Kingdom, we pay more in tax than we do for the petrol itself; roughly two-thirds
of the cost is tax.
Governor
Christie is gradually increasing the fuel tax in New Jersey. People in NJ will
still be paying less than half what we’re paying at the pump, yet it’s caused a
political storm. The haulage industry has forced the tax rise to be phased in
rather than introduced immediately, and tax breaks for veterans and pensioners
have been offered in compensation - as has a cut in the state’s Sales Tax
(imagine a much cheaper form of VAT, without the bureaucracy).
Americans
would never stand for the levels of fuel tax that we have in the UK, or VAT, or
Income Tax and National Insurance, yet we’ve become conditioned to expect it as
normal. Yes, in some areas we accept that we pay a bit more; you can only have
an NHS if you’re prepared to pay for it of course. And yes, there’s some
environmental argument for suggesting that fuel taxes aren’t the worst thing in
the world. Indeed, if our petrol were 46p a litre I might be prepared to support
a small increase in tax - to pay for cutting other taxes elsewhere, or a proper
budget for upgrading our roads. But think about how much you spend each week in
petrol. Two-thirds of that is going to the government. Then multiply by 52, and
many people are literally paying over a thousand pounds a year in tax just
driving to and from work. That’s before you think about your vehicle tax, tax on
your car insurance, the VAT you pay when buying a new car, and any road tolls,
bridge or tunnel tolls or congestion charges that you might pay.
Quite
why the British people seem to quietly accept such high taxation levels is a
mystery. Yet whilst in the European Union we’re in a commitment never to reduce
the tax on fuel. Then - in a breathtaking feat of hypocrisy - politicians will
usually blame the big oil companies for high prices at the pump. Don’t get me
wrong, they’re also contributing to the problem, but it’s a case of taking the
plank out of the government’s eye before taking the speck out of the oil
industry’s.
Then
there are the ‘stealth taxes’ for motoring enforcement - for example, my vehicle
tax is £0 per year because I drive a fuel-efficient vehicle. I didn’t receive
any letter telling me my tax was up for renewal, then (a couple of weeks after
it was overdue) I received a ‘fine’ for failing to pay them the £0 promptly
enough.
“Ask
not for whom the road tolls”, Hemingway might well have said were he alive
today, “it tolls for thee”. The Americans would never stand for such highway
robbery.
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