
Soon, Cars in Denmark Will Only Be Taxed at 100% (2017) - andys627
https://www.bloomberg.com/news/articles/2017-08-29/soon-cars-in-denmark-will-only-be-taxed-at-100
======
charlesdm
Now, I don't live in Denmark, but am I the only one here who wouldn't like
(excessive) tax policies like that? A 180% tax (now to be lowered a bit) on a
vehicle seems madly excessive.

It's like a ban, without actually having the guts to call it a ban. I'm
assuming most normal people are unable to afford a car then.

I'm not a car nut (don't even really like cars, though I do own one and don't
use it often) but wouldn't want to live in a country with that line of
thinking. The same applies to alcohol etc. Let people be free to decide and do
what they want to do.

~~~
andys627
They're not excessive - they're more in line with true cost of car dependent
society. In the US we shower subsidies on car owners. Some examples: using
general fund money to build highways, charging low gas taxes that don't cover
cost of maintenance of roads, providing free/underpriced parking in every
downtown in the US, undercharging for pollution and other negative
externalities of driving, requiring minimum amounts of parking in new
developments (instead of capping parking quantity or letting developer choose
how much to provide), qualifying infrastructure using car centric metrics like
Level-of-Service, federal gov't providing automatic 10-to-1 match for highway
projects but 1-to-1 (in good cases) for transit projects to name a few

~~~
raverbashing
> using general fund money to build highways

You're forgetting about trucks (and other service vehicles), and though trains
are better, you can't have trains everywhere

> providing free/underpriced parking in every downtown in the US

Downtown is predominantly paid parking, and not underpriced either

~~~
hrasyid
> Downtown is predominantly paid parking, and not underpriced either

Yes but the vast majority of American cars don't park in downtown.

~~~
reaperducer
The message he was replying to included this:

> underpriced parking in every downtown

------
zackmorris
I noticed most of the comments in this thread were about not wanting a high
tax rate of 100%. I just want to offer a counterexample where people are all
for it: in Costa Rica there is a similar import tax on luxury and technology
items and is roughly 50-80% on cars:

[http://www.costaricatax.com/import-
tax.htm](http://www.costaricatax.com/import-tax.htm)

[http://www.costaricatax.com/luxury-tax-
cars.htm](http://www.costaricatax.com/luxury-tax-cars.htm)

One of the main reasons for this is that everyone wants to go to Costa Rica
because it's one of the nicest places in the world. So in a very real sense
their import tax is a "pay to stay" tax. As Denmark is also one of the nicest
places in the world, they do this as well.

Everyone forgets that in the end, the people are the beneficiaries of these
taxes by way of government services like free healthcare and education.
Eventually benefits will come as universal basic income (UBI) as well.

Now for the opinion part - I find it sad that the United Stated of America no
longer has any appreciable tariffs, so in a way doesn't think of itself as a
really nice place to go anymore. 40 years of so-called conservative thinking
on this (that government of/by/for the people is somehow the enemy) has done a
great injustice to our culture and global image as a beacon of democracy. I
was born in 77 so just barely remember that it didn't always used to be this
way. I fear that young people today are experiencing their cultural worth
being stolen and that their feeling of ineffectualness is being amplified by
divisive political tactics that will never pan out. Low taxes generally cause
these sorts of problems; lower taxes will make them worse. And taxes just got
lower, supposedly, even though the US already pays some of the lowest taxes in
the industrialized world. The very fact that the US is unlikely to raise taxes
appreciably anytime in the foreseeable future does not bode well for our
quality of life IMHO.

~~~
vinni2
I used to live in Northern Denmark and I have experienced their healthcare
first hand and witnessed social welfare which helped my friends and
colleagues. And I still do think this is excessive tax not well justified for
the following reasons:

1\. I would expect a state of the art public transport in the whole country.
The rail system connecting different cities in Denmark is pretty dated and
slow. Even using diesel engines in some parts. Now I would expect some part of
that 180% tax to be invested here. But the fact is people are often forced to
drive with car due to poor public transport connectivity in many places.

2\. Even electric cars are not exempt from these high taxes anymore. This
eliminates the benefit of the doubt that this was for the good of the
environment.

3\. The high tax for cars has historical roots. Many in Denmark believe it is
no longer necessary today to fund the welfare state.
[https://www.thelocal.dk/20151120/whats-the-deal-with-
denmark...](https://www.thelocal.dk/20151120/whats-the-deal-with-denmarks-car-
registration-tax)

4\. These high taxes are also defeating the purpose of keeping the environment
clean by creating a huge market for used really old cars which are often the
worst polluters. [https://mereconomics.com/2016/02/09/on-the-efficiency-of-
dan...](https://mereconomics.com/2016/02/09/on-the-efficiency-of-danish-car-
taxes/)

5\. Opinion: It all boils down to having free health care, free education,
really good welfare system and not being able to afford a car. Other European
countries like Germany seem to have worked out a model which can make all of
them affordable to most people.

I can go on but got bored.

~~~
ljf
Car ownership in Denmark is only marginally lower than here in the UK. And not
that far behind the rest of Europe. So it obviously doesn't put off those who
want a car.

~~~
vinni2
I am not saying people are not buying cars but the 180% or 150% or even 100%
tax is not justified. From what I read it is now down to 85% tax which is much
better. Dont know about UK my baseline for comparison is Germany (I lived
there for 4 years) and I would move back to Germany any day if I can find the
same job there. Cost of living, social welfare everything is a good balance
between socialism and capitalism there.

~~~
ljf
Why is it not justified? What you you replace it with, or cut from current
government spending. Most Danish on this thread and the few I know have been
in support of the tax, which I find interesting.

~~~
vinni2
If it is so critical for the welfare state why is there even a debate about
cutting it? Why was it cut down to 85% from 180%? Also historically the taxes
weren’t always this high and the welfare system did just fine.

None of the Danes here have given any convincing answer on why they support
the higher taxation on car registrations.

~~~
ljf
I'm not saying it is critical, I'm just asking how we best cost the external
impact of people owning and running cars. But as I've said in previous posts
on other threads, I'm a boring lefty in favour of high taxation, and I don't
expect others to share my bug government viewpoint ;)

~~~
vinni2
> I'm just asking how we best cost the external impact of people owning and
> running cars.

I am not sure what you mean by "external impact" here. You should clarify that
first before I can answer your question. Also I hope you will forgive me for
not reading your previous posts on other threads!

I get that you are in favour of high taxation. I am not against taxation
either. But the question is how much higher is acceptable? 200% is acceptable
for you? 300%? where do you put the upper limit? How do you measure the cost
of driving cars on the society and environment? was 180% by the Danish
government justified in this regard? What was the rationale behind that? I
haven't gotten answer to this question from any Danes here or in Danish news
papers or in person after talking to many Danes while working in Denmark for 8
months.

May be it is the whole Scandinavian model to blame. Therefore, I am giving you
the example of Germany where taxes on cars are significantly low but at the
same time salaries (at least in the tech sector) are comparable to
Scandinavia, education is free, healthcare is affordable and cost of living is
one of the best in the western world.

------
martin_bech
This is an article from this summer. The negotiations ended at a tax rate of
85% for cars priced up to 185.000 DKK about 30.000USD. And 150% tax for the
rest.

There are som deductions for safety ratings, mileage etc. but these are now
the current taxrates for cars. Beware before the car tax, the cars are subject
to 25% sales tax. So expensive cars are +25% + 150%. (it used to be even
worse)

~~~
reaperducer
Once you pay that tax at purchase, is there also annual registration fees?

A few of the American states I've lived in have charged annual taxes based on
a car's worth (decreasing over time). I hope you don't get nailed every year!

~~~
colde
Yeah, there are an annual registration fee as well. Spread over to payments a
year. It isn't much though, and it depends on how environmentally friendly
your car is. I think the lowest rate is approx 200 USD pr. year.

~~~
andys627
> Isn't much... $200/yr.

For comparison: California $83/yr. Nevada $33/yr.

~~~
reaperducer
Nevada isn't exactly $33/year.

When I lived there, even a small economy car, it was well over $400.

It's how many counties pay for schools instead of property tax. It's also why
so many Nevadans get mad at the thousands of people from California who move
to Nevada and don't register their vehicles, then complain about the schools
that they send their kids to but don't pay for.

This web site shows that a two-year-old $25,000 car will cost $406:
[https://dmvapp.nv.gov/dmv/vr/vr_estimate/vrestimationinput.a...](https://dmvapp.nv.gov/dmv/vr/vr_estimate/vrestimationinput.aspx)

~~~
tzs
Dealing with people who don't register their cars seems like a problem that
should be reasonably solvable, if enough people are pissed off by it.

Authorize police to issue tickets to cars with expired out of state
registration. Make the tickets dismissible if you have lived in Nevada less
than whatever the grace period is they give for new residents to register and
you get the car registered in time. Make it so the dismissal happens
automatically upon registration. Provide a way for officers to quickly check
to see if a car already has a pending ticket for this so that a given car only
gets ticketed once.

There should not be many people who are living in Nevada and driving around
Nevada with expired out of state registration and are not trying to cheat.
About the only such people that come to mind are people who moved to Nevada
near when their registration was going to expire in their old state, so did
not renew it, and are still in the grace period for registration in Nevada.

Some of those people will have the slight hassle of receiving one ticket, but
since they are not trying to cheat, and therefore are going to register by the
deadline anyway they don't have to do anything about it. It will automatically
go away when they register.

The above should catch a lot of the cases, especially if police are authorized
to pull over people to issue these tickets, as opposed to just allowing them
to issue these tickets to parked cars they come across or issue them
incidentally during pull overs for other issues.

Of course there might be people who decide to fake it. In many states the
indication of current registration is just a sticker with year of expiration
on it stuck onto the license plate. It would not take a master forger to make
a fake sticker. (Heck, if someone's home state is sufficiently cheaper for
registration, they might even not let their home state they have left, and
keep registering their car there!).

It would be going too far to try to crack down on non-expired out of state
plates directly, because a large number of those are going to be visitors, not
residents (especially for a state like Nevada that has a large number of
automobile tourists visiting).

To deal with the people who fake it (or keep registering in their old state),
they would probably have to limit it to checking only when they pull someone
over for some other violation like speeding or drunk driving where they can
check ID. Unless the driver has kept a current (or fake current) out of state
driver's license matching their out of state plates with them, the jig will be
up. Make it so that these people get hit with a very large fine.

------
ansgri
I understand the viewpoint that _less_ cars = better cities. But _worse_ cars?
Because this heavily penalizes buying better cars. I understand the need to
segment the tax burden by income level, but it seems reasonable to make the
maximum tax level so that, e.g. you pay flat €50k in taxes if your car costs
more than €50k. You can play even the safety card here: more expensive cars
have more advanced automation and safety features, so their use should be
encouraged.

~~~
ucaetano
> you pay flat €50k in taxes if your car costs more than €50k.

That would be the same as capping income tax: you pay a 20% rate up to $100k
of taxes, after that, no incremental taxes.

It's the opposite of progressive, actually taxing rich people less than poor
people.

I'd even go and propose that cars over €50k should be taxed at a higher
marginal tax rate than lower-priced cars.

~~~
ars
There's a difference between taxing income and taxing spending.

They are opposites, so the tax rate should also be opposite - the higher the
spending the lower the tax.

After all, you want to encourage wealthy people to spend and spread the
wealth, not encourage them to hoard it.

~~~
ucaetano
> you want to encourage wealthy people to spend

Not on cars.

~~~
ars
Why not? In what way is a cheaper car socially better than an expensive car?

~~~
ucaetano
You don't want cars overall to start with.

And as wealth increases, the negative utility of a 1% increase in price of a
certain good decreases for that buyer, requiring higher taxes to have the same
disincentive than for lower income buyers.

Also, cars (especially luxury ones) are highly unproductive assets.

~~~
ars
> You don't want cars overall to start with.

So you punish those who have/want one? Ouch, I wouldn't want to live in your
world.

Work the other side, make people want to not have one. Making people's life
miserable is not a good way to manage your citizens.

> And as wealth increases ... lower income buyers.

Except that the wealthy person just buys a cheaper car. They still have a car,
and you have not accomplished your goal.

Your mistake is you taxed spending, without even checking income.

Your scheme does not make people not get a car, it causes people to get a
cheaper car, that's all.

~~~
ucaetano
> So you punish those who have/want one? Ouch, I wouldn't want to live in your
> world.

No. Cars have negative externalities to society, so you tax them to account
for those externalities.

This is the same reason why governments subsidize infrastructure and
education, as those generate positive externalities to society, and most of
the value generated is in those externalities, you need a negative tax on
those items to incentivize them.

Or the same reason why governments subsidize electric cars.

> Except that the wealthy person just buys a cheaper car. They still have a
> car, and you have not accomplished your goal.

Sure, but you're providing the same economic disincentive as you are for a
poor person (in relative utility), which is a fairer way to do it.

> Your mistake is you taxed spending, without even checking income.

You don't seem to understand the concept of positive and negative
externalities.

I'm not proposing to tax spending, I'm proposing to tax a good so that its
price accurately reflects the negative impact on society it causes.

~~~
khedoros1
> I'd even go and propose that cars over €50k should be taxed at a higher
> marginal tax rate than lower-priced cars.

> I'm not proposing to tax spending, I'm proposing to tax a good so that its
> price accurately reflects the negative impact on society it causes.

It seems like you're proposing taxing based on the price of the good, not the
cost of the negative externalities. It would make more sense to tax based on
some combination of the car's weight, footprint, engine size, fuel efficiency,
and emissions metrics, based on use of the vehicle, as well as at purchase
time.

A vehicle that's a luxury item, but otherwise comparable in relevant
statistics, doesn't necessarily need to be taxed more heavily than a basic
version of the same thing.

~~~
ucaetano
> It seems like you're proposing taxing based on the price of the good, not
> the cost of the negative externalities.

Wrong. I'm proposing that to have the same economic incentive on a luxury
version of a certain good you need a higher proportional tax to account for
the flattening of personal utility curves.

And that's before we get into the fact that luxury vehicles have even higher
negative externalities due to increased engine size, lower fuel efficiency,
larger size, etc.

~~~
khedoros1
> Wrong

Then I think you're being very unclear in what you're saying. The
externalities aren't necessarily related to the price of the vehicle.

------
mortenjorck
I was quite surprised to click through and read that this is a _decrease_ and
not an increase in the tax rate on cars. Which makes me wonder: What about the
Danish political climate enabled the original 180% rate to make it into law?

~~~
martinmunk
Had to check up on Wikipedia. It was set to 180% in 1977, with no real reason.
I'm pretty sure it was meant as temporary.

But yeah the fact that we have no real lobby apart from dealers and the car
owners association. That and the fact that quite a lot of people hate cars.
Being from the rural parts of Denmark where cars are a nessesity and moving to
the second biggest city in the contry was quite a shock to me.

The 180% tax is not that big a mystery to me any more. I don't talk taxes with
many of my old dorm friends as they simply can't see the need to lower it. But
that is easy to say when they live within biking distance of everything they
need.

I still see them. At least when they need a car for moving.

~~~
charlesdm
Should charge them a moving fee, with a 180% tax on top. :)

------
reacharavindh
I moved to Denmark in 2017.l from south east USA. Writing this message from my
hour and half long train+bus commute to work(72 km away from the city of
Aarhus,DK). To me. It sucks big time! I can't afford a decent car here. True,
I can get a shitty old used car that can breakdown wherever for the cost of a
decent car elsewhere in the world. I'd rather save my money and take this long
commute. This is one thing I absolutely hate about Denmark from the bottom of
my heart. I might consider moving out of Denmark just because of this as soon
as my girlfriend finds a good job opportunity elsewhere.

There are so many good things I see about Denmark. But this one shitty thing
trumps all the good for me!

Edit: NO. Used cars are not that much cheap unless you get to the shitty
category with a ton of mileage in them.

~~~
rando444
As someone from a neighboring country to Denmark, this to me is a sign that
their system is working.

~~~
reacharavindh
Eager to hear why you think so?

I'm a young person taking a 1.5 hour train+bus commute because I cannot afford
a 45 minute car ride. Why do you think the system is working right?

Or, in your view, what am I doing wrong?

------
olivermarks
TLDR Registration duties of up to 180 percent mean Denmark is one of the most
expensive countries in which to buy a new car.

Proposal to lower tax rate to just 100 percent. Currently a Porsche 911
Carrera sports car is $306,600 versus $117,900 in Germany.

"We will still have some of the highest car prices," Economy Minister Simon
Emil Ammitzboll told a press conference in Copenhagen on Tuesday. At the same
time, it’s "not fair that we, living in one of the wealthiest countries in the
world, are driving worse cars than our neighbors in Sweden and Germany."

------
lumberjack
Private vehicular taxation is really unjust when done in this way. Not
everyone has the same usage patterns.

For example, I commute by bicycle. I would love to have a street legal van, in
the eventuality that I want to move something bulky. I would use it once a
month at most. Probably less. But I would have to pay thousands of Euros of
road taxes just to own a street legal vehicle that is parked in my own garage.
Why? Fuel is already taxed a lot to limit usage. Parking permits in cities are
expensive to prohibit ownership and congestion. Why am I being taxed, exactly?

BTW, I know this is not a road tax in the article but same nonsense of
assuming that ownership is the same as usage.

~~~
KitDuncan
If you are using a car once a month, shouldn't it be far cheaper, even without
taxes, to just rent one?

------
martinmunk
Some additional information: The yearly tax on cars are heavily affected by
the milage of the car and ranges from $40/y for cars above 75mpg to $5260/y
for cars below 12mpg (diesel figures)

------
therealgimli
As an urban dweller (nyc) who would love to see fewer autos on the road, I
view this as a positive development.

But I can't help but wonder if there is an automakers lobby in Denmark. If so,
why wouldn't they oppose/ shutdown such a measure?

I can only imagine the insane backlash a similar ruling would have in the US,
in spite of the long term benefits to society from having fewer cars.

[edit: should have read the article in full before commenting-- I see now it
is about _lowering_ the tax rate]

~~~
ChrisClark
This is the other way around, they are lowering the tax from 180% to 100%.

So I'm sure if there is an automakers lobby, they approve of this.

~~~
alkonaut
There are no auto makers in denmark, so likely not much of a lobby (this is
Northern Europe, so “lobby” is more likely to mean unions of the manufacturers
than lobbyists paid by multinational corporations).

------
iddan
In Israel they do this without any good reason.

~~~
Zekio
make cars cheaper without any good reason? after all they are decreasing the
taxes

------
expertentipp
I just derive some perverted pleasure from seeing Scandinavians hitting
themselves in the name of their self-righteousness.

~~~
dang
Nationalistic swipes will get you banned here. Please read
[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)
and post civilly and substantively, or not at all.

