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Alternative Approaches to the Taxation of Heavy Vehicles Applications Manual (1997) / Chapter Skim
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4.0 Adequacy
Pages 27-32

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From page 27...
... If tax rates have varied, the forecasts should be based on trends in normalized yields (e.g., Cambridge Systematics, Inc.
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From page 28...
... Major changes in enforcement activities may also have an effect on tax revenue that warrants some consideration In the forecasting effort. If such a change were to reduce a current five percent evasion rate bv half.
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From page 29...
... Furthermore, there is some concern that, in the future, fuel-tax revenue may fall as a result of increased use of alternative fuels, such as gasohol which receives tax breaks, and electricity which currently is untaxed and is difficult to taxi Registration fees are relatively stable, but even vehicle registrations (anc! particularly truck registrations)
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From page 30...
... If desired, the responsiveness of a tax system to inflation can be quantified using the formula: Inflation Responsiveness = A + FB R Where: R = Total revenue; A = Revenue that is fully responsive to inflation; B = Revenue that is partially responsive to inflation; and F = Responsiveness factor for B - i.e., the estimated percentage change in partially responsive revenue that would be generated by a one percent increase in prices. We suggest that 0.5 is an appropriate value for F for ad valorem sales taxes on fuel and for per-gallon fuel taxes that are fully indexed to the price of fuel.
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From page 31...
... Political limits reflect both a general unwillingness to pay higher taxes and a desire on the part of various interest groups to limit increases In taxes that particularly affect hem in favor of increases in taxes that fall disproportionately on others. Practical limits result primarily from the potential effects of higher tax rates on evasion, avoidance and traffic diversion.
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From page 32...
... Alternative Approaches to Heavy Vehicle Taxation Applications Manual - Adequacy 32 Cambridge Systematics, Inc.
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Key Terms

  • tax rates
  • ten percent
  • tax rate
  • revenue base
  • registration fees

  • highway usage
  • valorem taxes
  • minimum tax
  • gross revenue
  • normalized yields

  • user charges
  • price index
  • partially responsive
  • estimating gross
  • fuel prices

  • practical limits
  • require estimates
  • fuel sales
  • oartialv responsive
  • assessed values

  • base ant
  • significant opportunity
  • taxes frequently
  • political limits
  • requires information

  • fall disproportionately
  • enforcement activities
  • nchrp report
  • five percent
  • enforcement costs


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