Should we drop the gas tax altogether in favor of a mileage tax?
From this article, "U.S. Transportation Secretary Mary Peters says that the federal highway trust fund will lack sufficient funding from taxes beginning in 2009. She has been pressing states to look for alternatives to gasoline taxes. 'The bottom line is that we are spending more than we take in, and we have nearly run through the balances that had built up in the fund,' Ms. Peters told Congress in February. 'The highway funding problem is not going to go away, nor can we put it off until the last minute.' The highway-fund shortage could be exacerbated if Congress raises fuel-economy standards to curb pollution and reduce reliance on foreign oil. Cars with higher fuel economy can travel longer without refueling."
Basically, what is happening is that states are trying to figure out a way to make more money in an effort to keep up their existing roads and to continue to expand on what is already there. The worry is that as cars get more fuel efficient, less money will come in from the gas tax. One potential solution that Oregon and other states are considering is to track the amount of miles a vehicle is driven and tax the vehicle on those miles, not on the amount of gasoline used to refill the tank. While that seems to make a certain amount of sense, opponents to this plan are concerned that consumers will be less inclined to purchase fuel efficient vehicles if it costs less to fill them up, as it would if the gas tax were dropped altogether, as it would under the mileage-based option. Perhaps instead, we should raise the gas tax? Any takers on this one? Here is one! And below you'll find a post with some other ideas about the highway system in America.
Related:
[Source: The Wall Street Journal]
Reader Comments (Page 1 of 2)
James 11:25AM (2/03/2009)
idk what the thinking is here? Whats to stop people from just ripping them out?, or hacking the system? This can only go into new cars, unless the force install them into old ones (which would cost money!)... so who wants to buy a new car?!?!? no one. so them the auto companies go out of buisness for good with the billions we dumped into them?! And i heard the want to charge different rates for time of day?? what is that? thats insane.... i'd rather just drive on umaintained dirt roads and through fields than pay these insane taxes just to drive on pavement.
Reply
rgseidl 2:00PM (4/27/2007)
A number of European countries levy road tolls, in addition to very high fuel taxes and annual license fees. Anyone thinking of turning US freeways into toll roads should look at what others have tried and apply the lessons learned.
All of the examples cited below apply to vehicles registered in the respective country as well as foreign cars and trucks.
France, Spain, Italy: privately funded motorways with manned toll booths every so often.
Switzerland, Austria, Czech Republic: vignette (sticker) required for driving on motorways.
Austria, Italy: commercial vehicles must be equipped with an cheap RFID device that transmits the vehicle VIN to permanent transmitters mounted by the roadside every few km on the motorways. Operators are sent a bill for cumulative km driven once a month.
Germany: commercial vehicles must be equipped with an expensive on-board computer that tracks the vehicle's position using GPS (later, using Galileo) and regularly communicates with the TollCollect service via mobile data link. More accurate than the RFID system but more than 12 months late and universally reviled for the high fees. HDV drivers often uses A- and even B-roads to avoid tolls, which are currently only levied for motorway usage.
London, Oslo: congestion charge for entering into the city center
UK: some form of road pricing likely
Bottom line: logistically, it would be much easier to just adjust fuel taxes and license fees. Btw, dedicating any given source of public revenue to a specific type of spending, such as road maintenance, is generally a bad idea. Just elect politicians who share your priorities.
Politically, especially in the EU, raising fuel taxes is hard because tax harmonization measures still require unanimous decisions by 27 member states. There is, however, a minimum tax rate that must be levied - the latest proposal is to raise that to EUR 350 per 1000 liters of on-road diesel.
Reply
Howard Lee Harkness 2:01PM (4/27/2007)
I'm seeing a definite increase in toll roads, which I regard as superior to any tax, because it affects only the people that use the roads, and it affects them in direct proportion to the amount of that use.
With the new toll-tag in common use here in north Texas, you don't even have to stop at the toll booths. I use a toll road for commuting, because the toll cost is more than offset by the savings in time and gasoline over the alternatives available to me.
If most roads were supported entirely by tolls, people would be made aware of the actual costs of building and maintaining roads, and could modify their behavior accordingly. Plus, EV drivers would have to pay their fair share.
The only problem is getting government to reduce or eliminate taxes, which doesn't happen very often.
Reply
Andrew 7:51PM (4/29/2007)
The wear and tear on a road from a given vehicle is proportional to the weight of that vehicle. (Of course, this discounts the effect of freeze/thaw cycles causing additional damage.) Why not have the "road tax" be based on miles driven multiplied by weight of the vehicle? It could also be adjusted for commercial vehicles based on the types of items they carry.
Reply
ronilateral-registrations 2:42PM (4/27/2007)
You could adjust gasoline taxes upward to make up for revenue lost to efficiency, or you could allocate a portion of a general carbon tax. A carbon tax allocation means even a portion of the cost of electricity for plug-in hybrids would help pay for roads. Personally however, I agree with Mr. Harkness that directly paying for use of roads is the smartest way to go. The simplest way to do this is embed an RFID tag in auto license plate registration stickers. Then put transponders on the roads. Take snapshots of vehicles without tags. Instead of yearly registration fee you have a monthly subscription for road use in the state.
Reply
MikeW 2:54PM (4/27/2007)
Once the bonds are paid off, scrap the tollways.
http://www.motorists.org/issues/taxes/badidea.html
How would milege be determined. (GPS tracking) If you are driving off road on a dirt road, that isn't causing wear to the pavement so that shouldn't be taxed.
The cars already subsidize the trucks (which cause the wear) so start shifting some trucks (intact) to rail.
Reply
Environmentaly Minded 3:12PM (4/27/2007)
As I see it there is a two fold problem. We need more efficient cars or at least have people buying more efficient cars so that we have a lower impact on the environment and less use of a depleating asset (oil). Second we need the Highway department to achieve more funds from taxes or some other source. If you make the roads toll roads, then your charging everyone the same whatever they drive. Upping the strait gas tax is only a stopgap measure. We've all noticed that when gas prices go up there is a temporary cessation of non neccesary trips. I believe a betteer methode would be to allocate a certain number of gallons per driver. Once you attain said number of gallons per month your gas price increases exponentially with the number about the proscribed limit. This would have two effects; one it would make people be more conciouse of their car buying proferences and the same of cars on the road would drastically increase in fuel efficient cars. Second, those individuals that just can't part with their gas guzzlers would fund the extension of the highway system. Business or individuals that use there cars for work would have to have their own problems.
Reply
Howard Lee Harkness 2:58PM (4/27/2007)
"The simplest way to do this is embed an RFID tag in auto license plate registration stickers." --ronilateral-registrations
The idea of RFID tags in you license renewal sticker has some merit, but you might want to put them into something harder to steal. Imagine somebody stealing a tag, with the usage bill going to the theft victim.
Hmmm... on second thought, being able to locate stolen tags in near-real-time might be another benefit.
There are some additional unintended consequences possible, though. For instance, with the information available (location, time, etc.), it would be trivial to mail tickets to people who were obviously speeding (with a little more technology, that could be extended to running red lights, etc.). In a similar vein, Big Brother could probably start tracking everyone more effectively.
Reply
Joseph 4:47PM (4/27/2007)
A tax on how far you drive is an excellent idea! MPG in the U.S. is really quite good considering the size of the monsters called
SUVs that people drive.
The other side to the equation of using less gas, is simply driving less.
A small tax, like one to four cents a mile, would be good. A more fuel-efficient vehicle could be charged less, and a less-fuel efficient one more. At this cost, the tax would be about $100-$400 a year, which is reasonable. Such a tax though, should only apply to any new car bought after the day such a law would be enacted.
And a car that runs w/o gas could have no tax!
Reply
Felkster 4:16PM (4/27/2007)
What if your annual registration renewal included a component where you reported vehicle mileage (either via a visual check or something electronic and more secure). While it's not an exact science (you may have driven in Canada), it would be a simple, annual method for paying a tax based on the amount you've driven your car.
While as a hybrid driver I of course want to say "up with the gas taxes", I do agree that those who drive more should pay more. I'm opposed to RFIDs because of "big brother" like Howard said and tolls because they congest already congested roadways.
Reply
PeakVT 7:49PM (4/29/2007)
I think the gas tax is far easier to implement because it already has been, and that a RFID-based road use tax would be far too intrusive and big-brotherish. I am not against transport and travel per say, I am against the excessive use of fossil fuels for transport and other things. If fossil fuel as a major source of transport energy is elminated then clearly some other kind of revenue scheme will be necessary. For instance if electricity becomes the main source of motive power then the annual road safety inspection could be used to record miles driven as measured by an on-board computer and thus assess taxation. Until then greens should focus their efforts on raising the gas tax (or a broad-based carbon tax) to much higher levels.
Reply
kballs 5:00PM (4/27/2007)
Just increase the gas tax if fuel efficient vehicles are lowering revenue.
Fuel efficient vehicles are generally lighter and do less wear to the roads so they should pay less than big trucks and vans. Most of the miles driven inside each state will be while burning in-state gas with the corresponding gas taxes.
Per-mile taxes are a slippery slope at best, and big brother tracking your every move at worst. With a GPS tracker, you would have to retrofit millions of vehicles (high cost), and people could rip them out and leave them at home while they rack up miles (so then you'd have to audit everyone at the end of the year to match the odometer to the GPS data).
Toll roads with RFID have similar privacy issues and theft issues. Also, toll roads when used should be kept in public control, handing them over to private companies is bad because then they have to make a profit (meaning everyone will pay more than just the cost to build and maintain the road).
Increasing the gas tax is so simple and can be done virtually overnight. GPS and RFID Transponders are complex, have privacy issues, can be stolen, are costly, and would take years to implement.
Politicians just don't want to utter the words "raise taxes" even though that's exactly what they would be doing with per-mile taxes (they would set rates to generate more revenue than they are now with gas taxes since they don't have enough through gas taxes).
Reply
George Krpan 6:48PM (4/27/2007)
Increase the tax on gas to compensate for the higher average MPG.
The more miles driven, the more gas used, the more tax paid. Just like it's always been.
Drive a gashog, buy more gas, pay more tax. Pay for the luxury.
Drive a fuel miser, buy less gas, pay less tax. Enjoy an economic benefit.
Taxing on miles driven would not work. People would find a way to cheat. It would have to be enforced, monitored, which would cost the taxpayer. There's no way to cheat the current system. No enforcement or monitoring needed.
This is my dream. A smart gas pump would recognize the model of vehicle being fueled and would adjust the tax based upon the fuel efficiency of that model of vehicle. The less fuel efficient, the greater the rate of tax. The more fuel efficient, the lower the rate of tax. If you want to get people out of big cars and into small ones just keep increasing the rate on the gas hogs. Sooner or later even the most obstinate will get the picture.
Take it a step further and the pump would know the specific vehicle. It could analyze the driving habits of the driver. If it's getting less than the EPA rating, up goes the tax rate, forcing the driver to drive in a more moderate fashion. If it senses inordinate annual miles driven, up goes the tax rate, forcing the driver to cut down on their driving. Conversely, people who get EPA or better or have shown a decrease in their annual miles driven get a break, are rewarded.
Ultimately the goal would be to get people out of their cars and into public transportation. If people used public transportation there would be no need for new roads and the roads we have would last much longer because they would not be used nearly as much.
That brings me to the topic of trucks. Greatly increase the road tax on trucks. Use the money to fund the rebuilding of the railway system. Nothing wears out the roads more than trucks. Trucks are also a major cause of traffic congestion. If trucks were off the road traffic would flow much freer and everyone would get better MPG. Trains move cargo much more efficiently than trucks. The rail system could also serve for public transportation.
I have not yet read the articles referred to in the post or the comments. I just blurted out my opinion as it is. I'll read the articles and comments now.
Reply
Steve 8:02PM (4/27/2007)
If the objective is to reduce energy usage (hence reduce dependence on foreign oil), then increase tax on energy usage (gas, electricity, natural gas ...etc)
If the objective is to reduce congestion and raise funds for road maintainance. Put up toll roads.
If the objective is both then do both. There's no need to study or debate, both of these systems have been implemented in many countries in the world to meet these objectives. People will not conserve energy without monetary disincentive. The question is do we or our leaders have the will to do this. What's the worse that can come from it... people whining?
Reply
UncleOxidant 2:44AM (4/28/2007)
No, we shouldn't move to a mileage tax. It won't encourage people to buy more fuel efficient vehicles, it's expensive (each car needs a transponder), and it's invasive.
As an Oregonian, I had hoped that this idea would die a few years back but they seem to resurrect it every year.
Raise the gas tax if need be and impose a hefty tax on SUV sales - base it on gross vehicle weight like they do in Washington state. Maybe a carbon tax, but really it would be easier just to raise the gas tax.
The main problem which causes road deterioration in Oregon is studded snow tires. Maybe we should outlaw studded tires in favor of other traction tire technologies? The fact is that in Western Oregon (where most of the population is) you really only need traction devices 3 or 4 days per winter, but people keep studded tire on from November till April.
Reply
John Rowell 12:59PM (4/29/2007)
I'm with Felkster. It would be so simple to just have your odometer read once a year and taxed accordingly. Plus there can be different rates for different categories, for instance a hybrid can have a lower rate than a gass-guzzler.
Reply
wiha 3:43PM (4/29/2007)
"It would be so simple to just have your odometer read once a year and taxed accordingly."
Your state can not charge you for the miles you drive outside of their borders or on private property. This is why these proposals are always coupled with mandatory GPS tracking of all your movements.
Reply
Owain Ozymandias Buck 7:40AM (4/30/2007)
Not a good idea. As many have pointed out, some sort of tracking system would be needed to assess this tax. A simple mileage reading isn't going to do it--what about off-road and out of jurisdiction travel?
Also, a gas tax already is much more fair--heavier vehicles tend to cause proportionally more wear to the roadway and generally get lower mileage. This encourages efficiency across the board. If you haul on a regular basis, the most efficient 3/4 or one ton diesel is in your interest. If you want to drive an RX-8 every day, you'll certainly pay for the pleasure. Those of us who can't avoid the commute and have sought out efficient transportation for the mission still pay our share, but are rewarded for efficiency.
A higher gas tax would do the job, and if it's high enough, maybe we will demand more accountability from our state D.O.T.'s and the swindling bastards who let out construction contracts. Off-topic: I don't know about your states, but here in Georgia, it's friggin' criminal the way our recent big construction projects have been executed.
I don't even want to start in about our state legislature. I think the Iraqi legislature is more effective than our state house right now...
Reply
Chet 12:01PM (4/30/2007)
Raise the fuel tax. A mileage tax unfairly punishes more efficient vehicles. Heavier vehicles cause more road wear; as heavier vehicles tend to consume more fuel, a fuel tax is a better distribution of cost than a mileage tax.
Raise the fuel tax. Everything else is a political dodge.
Federalize and simplify fuel formulations while we're at it. That'll lower cost and reduce supply (and price) fluctuation.
Reply
lawtrainee 2:46PM (4/30/2007)
the more fuel efficient cars will do less wear and tear on the roads because they are going to be lighter so why worry about tax revenue when the cost of repairing the roads is going to go down?
Because heavy trucks still are being subsidized to provide cheap cargo and quick transportation.
ALL Tax Revenue is FUNGIBLE, so called money from gas to go to roads is not true, the same for lotto revenue to schools. It all goes into one big pocket and then split up from there. Calling it a way to fund something is just another way of getting people to accept another tax, and another way for the government to milk more so they can spend more.
It cities worry about gas tax revenue they should remember that they have milked any money not spent. In California for example gas tax money is spent elsewhere, obviously because the amount of money taken in and then not spent on roads.
Reply