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Alternatives to the Taxation of Heavy Vehicles Applications Manual I.0 Introduction This Applications Manual presents procedures for evaluating alternative systems of heavy-vehicle taxes and the individual taxes that comprise these systems. The manual is designed to be used primarily for evaluating state taxation systems, but it also may be used for evaluating local and regional taxes, separately or as components of a state tax system; and all procedures presented are also applicable to the Federal taxation system. . . This manual is one of the Products of a study of "Alternative Approaches to the Taxation of Heavy Vehicles." The fun results of this study are presented in a separate Final Report. This Applications Manual presents procedures for the application of six criteria that are recommended for the evaluation of heavy-vehicle taxes and tax systems: · Adequacy; Administrative efficiency; · Equity; · Economic efficiency; · Evasion and avoidance; and · Feasibility. Each of these criteria incorporates several different considerations or issues. Chapter 2 of this manual contains an introductory discussion of the six criteria and related issues; and Chapters 4 through 9 present procedures for applying the six evaluation criteria. These six chapters are preceded by a chapter (Chapter 3) that provides a more technical presentation of procedures for developing revenue estimates that are required for the evaluation of equity (Chapter 6) and that mav also be useful for evaluations of adeauacv and evasion (Chapters 4 and S). ~ ~, The final chapter of this manual summarizes the results of qualitative evaluations of several generic tax systems presented in Chapter 7 of the Final Report, and it illustrates how the results of evaluations for each of the six criteria can be brought together, synthesized, and interrelated to assist decision makers in choosing among alternative tax exemptions. This Applications Manual may be used both: a) to evaluate potential tax-system changes, such as Hose proposed by agency staff or interest groups; and b) to contribute to the development of additional alternatives that may better meet agency goals. For the latter purpose, we recommend a careful review of the evaluation criteria discussed in Chapter 2, of the evaluation procedures presented Chapters 4 through 9, and of tradeoffs among the criteria. Cambridge Systematics, Inc.
Alternatives to the Taxation of Heavy Vehicles Applications Manual The six chapters that describe procedures for applying the evaluation criteria (Chapters 4 through 9) have been prepared relatively independently from each other. Only in the final chapter do we explicitly raise the issue of how to analyze tradeoffs among the six criteria and how to consider improvements in the tax alternatives that wig improve the overall evaluation of an alternative. This has been done to sunplify the presentation of the procedures. However, we recommend that analysts who are organizing studies of tax alternatives give considerable attention to the interrelationships among the criteria, as discussed in Chapter TO, before finalizing the definition of tax alternatives or their evaluation. 2 Cambridge Systematics, Inc.
