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Fuel Duty Or Highway Robbery?

14/11/2016 11:36

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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