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fuel tax for buses

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  • Simon Norton
    When I saw the last posting, at first I misread it as proclaiming the good news that buses would no longer have to pay fuel tax. What is the situation
    Message 1 of 1 , Feb 21, 2012
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      When I saw the last posting, at first I misread it as proclaiming the good news
      that buses would no longer have to pay fuel tax.

      What is the situation regarding this in the US ? In the UK we used to have
      something called Fuel Duty Rebate whereby bus operators would get most of the
      fuel tax they paid in respect of public service workings rebated. In the mid
      1990s the Conservative government introduced a fuel tax escalator whereby fuel
      tax would increase faster than inflation; however this increase was not rebated
      to bus operators. This situation continued under the following Labour government
      until they announced that any future fuel tax increases would be rebated.
      Unfortunately it was at that precise moment that they abandoned the escalator so
      there were no increases to rebate.

      Some time later they replaced Fuel Duty Rebate with Bus Service Operators Grant,
      which had the subtle effect of changing its accounting from a tax rebate to a
      subsidy. This had insidious effects when the Conservatives regained power, as
      they are allergic to subsidies and promptly announced that it would be cut from
      80% of fuel tax to 60%, i.e. an effective doubling of fuel tax, this to take
      effect from this coming April. They seem to believe that this will have no
      adverse impact on services -- well it's a trait of politicians to believe one
      can get something for nothing.

      I think I've for this right, but if anyone in this group knows better please
      feel free to correct me. And there may be differences outside England, i.e. in
      Wales, Scotland and Northern Ireland, though it was recently announced that
      Wales has decided to follow England's lead.

      Simon Norton
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