I think road tax is a mile away from its origins and that in itself cause confusion. If it was originally a 'road fund licence' with the aims of building and improving the highways, I am pretty certain that has long been forgotten and it is merely another income stream to the already over-large state in the UK.
Personally and politically I would prefer small, very small, almost insignificant government and likewise with tax. I fully agree with the principal that fines punish wrongdoers and taxes punish success. But my personal and political views aside, and much as I agree with sentiments above in that I'd rather see NO taxes, I think we have to accept that really we will be paying some sort of tax for the foreseeable future to drive our cars. Accepting the current way of things as established fact and unlikely to alter soon, it becomes a matter of the best and fairest way of collecting it.
In the past the road tax was based on vehicle engine size. With increasing 'green' pressures it is now based on emission levels. We have moved away from collecting revenue to build roads and into punishment/reward scheme for choosing more or less environmentally challenging travel options. Again, regardless of opinion if this is right or wrong, this is a fact.
As we have gone down this path, then really any levy added to fuel is the cheapest and simplest option - taxed at source. It also by default automatically 'punishes' those with high fuel consumption or higher polluting vehicles as they will be through choice using more fuel and paying more tax. 'Rewards' for lighter users or users of less polluting vehicles would also be by default using less fuel and paying less tax.
Couple this with the drastic reduction in labour and time across government departments issuing, verifying and printing/posting silly little discs, Police time in prosecuting non-payers (which would be impossible under fuel tax - no pay, no go!), etc. and the State would increase actual revenue massively.
Whilst not perfect, it would certainly be much fairer than the current system, far less bureaucratic and far simpler to administer. It may or may not increase costs for rural users, that would be down to each user to decide upon having worked out the amount of fuel used and the savings accrued from not having to pay tax under the current system. I do not have the figures or the data to work out what the increase would be, but scrapping the current system and the savings in bureaucracy may mean a fuel tax would only add pennies to the current litre price. It may even work out that users of many vehicles even save money, who knows?!
But in principle, duty added to fuel re-balanced to cover for the scrapping of the road fund licence as it is now is and accepting the fact we will have to pay some sort of tax, isn't that a better solution?
If it is not, then what is a fairer way without suggesting a scrapping of the tax altogether which whilst everyone I am sure would agree with, is very unlikely to ever happen. Taxes are rarely repealed, only re-packaged.
