The basic premise behind the car-free tax allowance is the knowledge that each motor vehicle on the road is subsidised to the tune of some £2,500 per year for 'hidden costs'. These include highways repairs, the proportion of the time taken up by the police, ambulances and hospitals on road accidents; the percentage of social security and unemployment benefit costs which are attributable to road accidents; the loss of valuable real estate in urban areas which is taken up by car parking; the loss of taxable value on houses next to busy roads; not to mention the many ecological costs associated with leaded petrol, air pollution, carbon dioxide emissions, and the loss of green space in the countryside.
On average, around 75% of households are car-owners, while 25% do not own or have access to a car: their share of the subsidy is therefore greater. As an alternative to recouping these hidden subsidies through additional taxation on vehicle-users, a car-free tax allowance of £1,000 a year is suggested for anyone over 17 who is not insured to drive a car, with the exception of up to seven days a year car-rental.
The allowance could be policed by a simple 'no car' statement included in the signed tax form, enforced by the honour system, and policed through an automatic penalty for a false claim equivalent to 200% of the benefits derived from the claim. Verification of false claims could be done through computer link-up with the government's Driver Licensing Centre in Swansea. Anyone claiming no-car status would have a computer mark placed next to their license on the computer, 'invalidating' the licence until the status was withdrawn.
A special provision would allow car-sharing clubs of five or more people to receive a 75% tax allowance. Car-sharing clubs may not exist yet in Britain, but there are 45 in continental Europe, and the first has now been established in the USA in Eugene, Oregon, so it's only a matter of time until they become widespread. The allowance would cost the government £300 for each full allowance claimed; this loss of income should be made up by additional taxation on petrol. For the first time, there would be a positive recognition of the contribution made by those who do not drive a car, and a positive incentive created for non-drivers.
Many people have responded positively to the idea of the car-free tax allowance, but a detailed examination of potential snags is required, along with potential enforcement problems. If any readers have professional experience in the fields of taxation, enforcement or bureaucracy, your reactions would be very welcome.
Ecologically, this fits very well into the new ideas that are emerging around ecological taxation and 'green' economic instruments. Ideally, the allowance should cover the full extent of the hidden vehicle subsidy. Realistically, it should be established lower, and increased gradually.
Guy Dauncey, 2069 Kings Road, Victoria BC V8R 2P6, Canada (tel 604 592 4472; e-mail: <gdauncey@islandnet.com>).
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