Should We Impose an Excise Tax on Large Vehicles?



By Dom Nozzi


Should we impose an excise tax on large vehicles? The idea makes some sense if we believe large vehicles are a big part of our traffic congestion “problem.”


But actually, it may not be.


On average, a person consumes 19 times more space (!!) in an average-sized car than a person sitting in a chair. That is an enormous, unsustainable consumption of space. Helps explain why (a) It only traffic-congestion2takes a tiny number of people to congest a road; (b) Why we can’t build our way out of congestion; and (c) Why it is counterproductive for transit/bike/ped advocates to state that their solutions will reduce congestion—the size issue makes it essentially impossible to reduce congestion.


Yes, gigantism is killing America, as it killed the dinosaur and the Roman Empire. And yes, we need to be concerned about over-sized vehicles.But I don’t believe that a big part of the congestion problem is over-sized motor vehicles, because nearly all motor vehicles used today are detrimental to the human scale that makes for pleasant neighborhood and community design.


Even if we all drove “subcompact” cars, we’d still have traffic congestion.


No, the key is to design communities so you can avoid congestion if you don’t like it (alternative routes, living close enough that you can walk, congestion fees, etc.).


So an excise tax on large cars will not help much to reduce congestion or other transportation issues. The problem, in my opinion, is our underpricing of all car travel/parking, which leads to overuse of car travel, and an inducement of “low-value” (video rental at rush hour) car trips.


Gas taxes are slightly better, as is pay-at-the-pump car insurance—both of which send a price signal to people that driving less means lower costs, thereby incentivizing less driving (particularly less “low-value” driving). The problem with both of these tactics is that they are not differentiating between car trips. Trips at non-rush hour and on little-used roads are more desirable from a societal point of view than trips at rush hour on heavily used roads.


Because of this, congestion/toll fees tend to be best, as they can be calibrated to charge more or less, based on where and when you are driving. In the end, we need market-schooled economists to fix our transportation system (and elected officials with the wisdom and leadership willing to let them).

Yes, there are important reasons to charge a special tax on larger vehicles (such as the safety problems they create, the larger road dimensions they induce, and their tendency to suffer from poor fuel efficiency), but when it comes to congestion, the problem is mostly due to how we inefficiently price and manage all vehicles.



Visit my urban design website read more about what I have to say on those topics. You can also schedule me to give a speech in your community about transportation and congestion, land use development and sprawl, and improving quality of life.


Or email me at: dom[AT]

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