Considering how incidental it is to the cost of owning one, car tax packs a hefty punch to the motorist’s mood.

We moan when it’s time renew it, grumble like mad if the cost is hiked, and woe betide anyone who decides to take our tax discs away.

Britain’s current car tax system even managed to nudge a once devout nation of petrol car lovers into a heavy flirtation with diesel ownership.

Fancy a brand new 5.0 litre Ford Mustang V8? The new car tax system from April will reward you after the first year, while some green cars will pay more

These rates, graded on C02 emissions since 2001, hugely favour diesels and aimed to push down car pollution.

Some tinkering with rates and a C02-graded showroom tax later, and they have succeeded in getting us into theoretically greener cars (as long as you ignore the harmful nitrogen oxide pumped out by the 50% of new cars sold that are now diesels).

This was remarkable really when you consider that diesel cars tend to be more expensive to buy new and second hand, when compared to a similar petrol car. They also have some more expensive bits to go wrong.

In many cases, it would take many years and miles to recoup that extra cost through the small savings racked up thanks to fuel efficiency and the £100 or so that you might save annually on car tax with a diesel.

But mis-guided though it may have been, in encouraging people into cars that were better for the environment but worse for our health, the C02-graded car tax emissions system worked and our cars are now cleaner.

The problem is that it worked too well. Currently, all cars producing under 100g/km of C02 are car tax-free - and there's a lot of them.

There are now so many low emissions cars that the vehicle excise duty take has tumbled – and that means changes are afoot.

In a move that we reported at the time but was then largely forgotten, former Chancellor George Osborne revealed some cunning new car tax plans in his post-Election Budget of July 2015.

This was classic Osborne budgeteering, with that signature whiff of something drawn up on the back of a fag packet.

Car tax for new cars from April 2017 will be totally revised. The first-year showroom tax will go up and still be graded on C02, after that the emissions rating gets junked and all cars will pay £140 a year, except 0% emissions cars which will be tax-free.

The coup de grâce is that all cars costing more than £40,000 will incur an extra £310 per year surcharge for five years after the first year.

That will be levied even on zero emissions cars above £40,000, such as Tesla’s Model S.

The tax system now tells us a Tesla manages to be a ‘good thing’ in year one, as evidenced by no showroom tax, but a ‘bad thing’ in years two to six, as it costs more than £40,000 and so is presumably bought by by rich people.

The new car tax system with the first year 'showroom tax' charges and those for further years

New car tax contains more bizarre anomalies. Buy a Ford Mustang 5.0 litre V8 – a wonderful car but not a very green one – and you get hammered for showroom tax but after that you will pay only £140 a year.

That’s the same as a supermini, but less than a far less polluting £42,000 hybrid.

The new car tax only applies to vehicles bought from April, while all existing cars will remain on the old system – so we will also end up with an odd two-tier situation.

Three tiers, in fact, for even older cars. That brand new 5.0 litre Ford, which returned 14mpg when we tested a Mustang V8, will pay considerably less than the £235 car tax on my 25-year-old Peugeot 205 GTI, which as it was registered before the 2001 date for C02 emissions grading is taxed on its 1.9 litre engine size.

It probably sounds a little self-serving to complain about this, but I’m not sure it seems fair for a thumping great V8 muscle car to be cheaper to tax than a 25-year-old modern classic car that does about 3,000 miles a year.

Yes, that Mustang 5.0 litre engine will only incur as much car tax as 1.0 litre Ecoboost Fiesta

It’s safe to say that we will hear a lot more about the daft new car tax system as it approaches.

But perhaps it highlights something else, that it is time to revise an old idea to ditch car tax.

The money doesn’t go on our roads, it simply goes into a general pot. If we’ve decided that the nation can’t do without the cash that car tax pulls in, maybe we should get it another way.

According to the IFS, vehicle excise duty will be worth £5.5billion a year in 2017. That compares to a forecast £27.6billion from fuel duty. In homage to George Osborne, I did some back of an envelope calculations, so bear with me here.

If car tax was axed and the charge was added to fuel duty it would have VAT added to it at 20%. On that basis, to keep the current £5.5billion coming in from car tax, you would need to add £4.6billion to fuel duty (the remainder would come from VAT on that). That equates to sticking an extra 9.7p on fuel duty, taking it from 57.95p per litre to 67.65p.

Factor in the VAT and this would add 11.6p to a litre of petrol. With unleaded at 119.55p, if your petrol bill is currently £90 per month, it would go up £8.70 to £98.70 – a £104 per year rise.

An extra 12p on petrol would hardly be welcomed by motorists, but for many it would be neutralised or outweighed by the removal of car tax – some would save money.

From a green point of view, it has the benefit of taxing those who use the roads most - and more polluting cars also tend to be those that use the most petrol.

It passes the fairness test, as it removes an existing tax and replaces it with one that is based on how much you use something.

So, rather than bringing in this oddball new car tax system, would a better move be to axe car tax altogether, add 10p to fuel duty and pull in the money that way?