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Vehicle Taxation v. Road Costs
Page 123
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How to Compare the Yields of Motor Taxation with the Costs of Related Highway Maintenance.
By Edward S. Shrapnell-Smith, C.B.E., IPLInst.T.
YEARS of study and contributory effort by interested parties now show promise of bringing to a head a practical method of evolving from existing and new data a reliable basis of comparison between tax yield
and highway cost related to the motor traffic passing. It was my pleasure, jointly with the county surveyor and engineer for Surrey, Mr. W. Robinson, A.M.I.C.E., M.Inst.T., to present the then available factors in course of a paper which we read at the Birmingham Congress of the Institute of Transport in May, 1927. We there advanced the considered opinion; based upon various groups of averages, that the mean tax yield throughout the whole range of commercial motor road transport, both goods and passengers, was 0.18d. per gross ton-mile.
Taxation Calculated per Ton-nliIe.
Important support was forthcoming at Birmingham for the correctness of the suggested average of 0.18d. per gross ton-mile. Many estimates entered into the stages by which we were led to adopt this as a correct figure of incidence and yield, as well as many observations. Average loading throughout the year for goods vehicles was taken by us to be one-half of the unladen weight, and for passenger vehicles to be 36.5 per cent, of the seating capacity. It must he admitted that the averages are means of far-removed extremes. As regards goods vehicles, it may surprise some readers of The Commercial Motor to know that the average loading for all registered British commercial goods motors
is precisely one ton. This mean loading figure is worked out as an average throughout the total running mileage, and does not represent the total number of tons moved. It compares with 25 cwt. for America.
Annual mileages presented a still more difficult element in the case. We had available to us proofs that annual mileages for goods vehicles fell as low as 6,000 a year in some cases and went as high as 25,000 in a few exceptional cases at the other end of the scale. As regards buses and coaches, many of which are only used seasonally, our working papers covered examples where allowances had to he made both in respect of part-year receipts from licences and limited or intensive use of the vehicles during the periods covered. The extremes of yield per gross ton-mile were wider apart for goods vehicles than for passenger vehicles, yet some licensed buses and coaches were found to run as few as 4,000 miles during their 16 or 17 weeks of active life per annum, whilst others covered as many as 20,000 in the same period. Every owner does not take the trouble to surrender his licence, and the Road Fund obtains six-months' licence fees as a general rule from seasonally used hackney vehicles. When one comes to the full-year licences the mileages fell in some cases to 12,000 a year and in others went as high as 40,000, with comparatively few records above that total in 1927. .
Correctly. Forecasting Taxation Receipts.
On the basis adapted at Birmingham in May, 1927, for goods vehicles, the then calculated figure for 1927 receipts in motor licence duties upon them was i7,506,000. When the final Ministry of Transport and Treasury returns were available early in 1928 the actual receipts proved to be £7,695,598. Taking the same basis as that adopted at Birmingham, the 1928 calculated receipts should have been 18,192,660. The official records proved them to be £8,360,000. These results show that the 0.18d. per gross ton-mile was on the safe side. It has not been possible to establish a similar cross-check in repect of hackney vehicles, owing to the combined effects of taxicab licences and running. Tax revenue from all types of motor hackney is lumped together in official returns.
There have, since 1927, been various modifications of the tax basis. Eight months of 1928 bore the petrol tax, representing practically an average addition 0.07d. per gross ton-mile to the average incidence of the 1927 scale of vehicle-licence duties alone.
On reaching January 1st, 1928, modifications became necessary to compensate for the 20 per cent, allowance in respect of vehicle-licence duties upon machines equipped with pneumatic tyres on all wheels. An additional factor of modifying effect during 1928 proved to be the higher average daily mileage of both the buses and goods vehicles so converted to pneumatics. The accompanying table is my own effort to construct one of related data.
Precise figures are still lacking to show the average traffic passing over particular highways throughout the year. The Ministry of Transport census of 1925 was taken for one week only in the month of August. So far as the observations can be relied upon, traffic averaging 2,130 tons per day was noted on Class I roads at 4,392 points on 24,329 miles of highway. Similarly, in respect of Class H roads in 1923, an average of 537 tons per day was found to be passing as the outcome of observations at 3,393 points on 14,638 miles of highway. I am in a position to state that, as a general rule, a more elaborate census taken by the Ministry of Trans" port during 1928 shows the average tonnage figures of the one-week census of 1925 now to be considerably lower than the true averages for 1928. The results, I am well satisfied, will show that the costs 'of Class I roads are in every case met by the tax yield from the traffic .passing,-whilst the costs for Class-II roads are not met to a greater average extent than, 'perhaps, 70 per cent., taking into account in bothcases Only the tax yield from the vehicle-licence duties, and not including the produce of the petrol tax. When it is noted that the yield of the petrol tax per 1,000 tons gross of traffic passing per day represents £150 per mile of highway per annum, the extent to which that tax (at 4th per gallon) affects the issue will be obvious.