• Feb 24, 2009
Over the weekend, we heard that the new Transportation Secretary, Ray LaHood (R), was considering implementing a tax on the number of miles people drive each year to raise the funds for road infrastructure. The idea was solidly rejected by our readers - and very quickly by the Obama Administration. One problem with a mileage tax, as Green Car Advisor points out, is that there is then no tax-based incentive to use less fuel. As the Washingto Post reports, the idea was pretty short-lived, with White House spokesman Robert Gibbs declaring: "It is not and will not be the policy of the Obama administration." A higher fuel tax is the most likely option for a way to collect money to repair American roads. We'll see if that idea has got longer legs than Lahood's mileage tax.
[Source: WaPo via Green Car Advisor]


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  • 17 Comments
      • 5 Years Ago
      So far this doofus is pretty unimpressive as our new transportation secretary. For even thinking of mentioning a mileage tax he should be replaced. Surely there are more qualified or at least more intelligent applicants available.
      I am all for a gas tax. Better higher taxes that go to help all of us than higher prices that only help Exxon. But a mileage tax is imbicilic.
      • 5 Years Ago
      1st, yes it would cost, now. But in a few years, when GPS is standard feature in every mobile phone? Chip makers gotta find a new market.

      2nd. Sorry, don't live in Uncle Sam land. And why do you think uncle would know, and be interested, where you have been?

      3rd. Yes that works for now, but mileage tax is for future.
        • 5 Years Ago
        1. No, not yet. Just when the next depression comes:)

        2. A little.

        3. Mmyes on My part, but Mr LaHood seems to think that it's allready time for first iniative.

        The evil tax/boogeyman is coming, save yourselves!
        • 5 Years Ago
        1. What? Do we need to bail out the GPS chip makers already?

        2. English much?

        3. Tell ya what, we can start worrying about it once a little less than 99% of our vehicular transportation runs on dino juice, mmk?
      • 5 Years Ago
      Worrying about how we tax the electric cars that barely exist tells you have far from reality this policy is. for now we should raise the gas tax. why? well for one we have to go to a great deal of trouble securing the supply of oil to make the gas. that cost, $2-3T should be included in the price at the pump - currently it is not. That is a much bigger problem that capturing the road use tax for a very small number of EVs on the road today. I calculated that if you took the cost of the war in Iraq and divided it by the number of gallons or gas we will buy over the next ten years, the cost per gallon is $2.10. That is the big issue. We need to internalize that cost and in real terms it never will be internalized, so please get off your high horse about worrying about EVs paying their fair share.

      Will we need to come up with a regime to have non-gas powered vehicles pay their share of road taxes? Yes, someday. Should that be a priority now? Not really since we want to go out of our way to incentivize these vehicles.
        • 5 Years Ago
        What, actual numbers? That's too logical. I agree completely.

        Cost:
        Gas tax is a system that is already in place. The administrative costs of raising the gas tax are near zero. The administrative cost in setting up a mileage tax would be huge, and administering such a tax would be labor intensive (= expensive). If you don't want MORE government workers... the ones needed to check you odometer every month/year, then you want a system that is simple to implement. The cost of 250,000,000 GPS tacking units would be billions just for the hardware, billions more to install them all, and hundreds of billions more each year to monitor and bill. How much higher would the tax have to be to cover the cost of the system?

        Correlation to road wear:
        The correlation between gas consumption to road wear is not perfect, as pointed out by "dhoffman", in effect giving heavy vehicles a subsidy. A straight mileage tax on the other hand is even worse, giving heavy vehicles a much bigger subsidy. This could be overcome by including vehicle weight in a mileage tax, but that would increase the complexity of that system, and its cost, dramatically.

        Accuracy:
        Gas tax built into the pump price is very hard to cheat. Checking odometers once a year makes mileage tax very easy to cheat. Removing the GPS from your car would probably be pretty easy to do as well for anyone with any mechanical acuity.

        The choice is clear to me.
      • 5 Years Ago
      This is what happens when a Democratic President hires a Republican to be the Transportation Secretary. The Republican parrots the talking points of a Republican think-tank that wants to take away financial incentives for green cars.
      • 5 Years Ago
      Owned.

      Fire him.

      I'm glad my tax dollars are spent on jackasses like this sitting around with their thumbs snuggly up their ass, dreaming up useless ideas.
      • 5 Years Ago
      Why does everyone think that with mileage tax: "there is then no tax-based incentive to use less fuel"? If a GPS chip, that monitors your driving, is installed in car, it is surely recorded in which exact car which chip is. Easy. Now that evil "tax man"-person can tax you, per mile of course, on any criteria what ever. Model, make, engine size, fuel, weight, colour, upholstery material...
        • 5 Years Ago
        the mileage tax is a terrible idea. 1st, it would cost ALOT to put it into place, just think of the cost to install millions of these chips; then the cost of monitoring millions of these chips, and billing each driver differently. Completely wasteful.

        2nd, do you really want uncle sam tracking you wherever you go? I sure don't.

        3rd, there is already an infrastructure in place for gas tax; its simple, and it works at the pump. Now just increase the tax %.
      • 5 Years Ago
      I know a mileage tax has it downsides but what are you going to do about funding roads when folks start going to electric cars? If the typical Chevy Volt owner with a sub 40 mile round trip commute uses gas only on the weekends where are you going to make up for the lost revenue from the prime source of revenue for transportation infrastructure?

      I suppose you could tax the electricity used to recharge EVs, but how do you separate that from electricity used within the home?

      One thing we do not want is a tax that has no relation to the amount individuals use our road infrastructure, e.g. county bonds for roads paid via home property taxes. Either a gas tax or mileage tax is a more equitable way to the same ends.
        • 5 Years Ago
        I know a mileage tax has it downsides but what are you going to do about funding roads when folks start going to electric cars?

        Well, that's a problem, isn't it? But then again, current fuel and other fees don't even cover road maintenance and construction costs.

        http://pubs.its.ucdavis.edu/download_pdf.php?id=1139

        But the money has to come from somewhere...

        One thing we do not want is a tax that has no relation to the amount individuals use our road infrastructure, e.g. county bonds for roads paid via home property taxes

        Can't the same thing be said of almost any government operation?

        Why should anyone be forced to pay for military adventures they disagree with? If you want the military to invade someone, why don't you just contribute to the fund?

        Some people find it morally reprehensible that portions of taxes taken from them -- by force -- are given to people who aren't working.

        People without children are forced to pay for schools. How is it possible?!

        Since I am not at these corporate parties, baseball games, or high-end restaurants, enjoying the food and experience, is it right I am forced to indirectly pay for all this "business entertainment" through the tax system?

        Can any of us "opt out" of the system they don't use or disagree with? If we can, then let's get busy, since mere road work is but a tiny blip in the grand scheme of things. If we can't, then I don't see why road construction should be any different than, say, the military.
        • 5 Years Ago
        Gas taxes can easily viewed as user fees where your other example cannot. As far as foreign wars, it would be impossible to tax each individual according to their benefit. If you disagree with a war then it was b/c you voted with the minority that is not in charge of the war policy, so better luck next time (e.g. Bush yielding to Obama). As far as schools this is a benefit to society as I would not want to live in a place - and I have spent time in countries like this - that is mostly illiterate. City governments have to vote to approve taxpayer support of stadiums for professional franchises, so if you don't agree with their decision you can vote them out.

        Gasoline or Mileage taxes, like airport taxes, are targeted at the user in proportion to the amount they use the infrastructure. These things are not necessarily for the public good , like schools, and are easy to quantify their usage, unlike a foreign war.

        Also the fact that the gasoline tax does not pay for all the new roads and maintenance of existing roads has to do with two things. One is that this set amount, 18.4 cent a gallon federal, has not been raised since 1993 and two is that inflation has eroded its value by one half. If the gas tax had been indexed to inflation there would not be the infrastructure deficit we have today.
      • 5 Years Ago
      I work in the transportation world as an environmentalist. I live and breath this every day: shortfalls in money, mass congestion (I live in a very large metroplitan area), air quality issues (air quality is one of my specialities), and various environmental problems.

      Solutions about increasefuel tax etc. will not work, they are short term. THIS IS THE BEST SOLUTION. It may not seem that way, but working in this industry it is the only way. As cars use less and less gas, and even no gas, we are lossing money. Congestion = more air pollution, more noise pollution, and loss of money fo businesses; as our population grows we must solve congestion. Is it fair that your prius neighbor pays so much less than you even though its doing the same amount of damage to the road and to fix these congestion problems? What about a guy that owns a Tesla? He pays nothing.

      The simple fact is its a usage fee, we pay for the amount of electricity we use right? We pay for the amount of water we use right? Why not pay for the amount of "road" we use. Its a pure usage tax. You, as a homeowner do not get charge more on your water bill for having more faucets or less efficient facuets, even if you use the same amount of total gallons as your neighbor who has low flow everything. Its the same idea.

      For all you people who think this is not an incentive to drive fuel efficient cars, what is the incentive now (besides wanting to be green)? Money. John Smith car owner saves more money at the pump because he buys less gas. Without a fuel tax, its the same way, a person who drives a hummer will still pay more in gas for the same distance. Its the SAME situation as it is now.

      The total solution is to add a usage tax, you pay what you use and to totally remove the gas subsidy in america. So I put to all your naysayers, if gas was at its price in Europe (fyi it topped 14 dollars a gallon when it hit 4 dollars here), 100% unsubsidized, would that price make you want to drive a prius or volt? Of course it would, and that will still remain the driving factor to purchase and use fuel efficient cars. The usage road tax would make sure everyone, prius owners, truck owners, tesla owners pay an equal share on the same amount of road usage, exactly how a usage fee works.
      harlanx6
      • 5 Years Ago
      That was no republican idea. I am very impressed that Obama rejected it outright, probably because he pays attention to public opinion. That's what he is supposed to do. It might make a difference if road tax funds were used more for road projects and less for funding a huge, inept, and inefficient bureaucracies.
      • 5 Years Ago
      Why should a Hummer, which weighs 4 times as much as a Smart car and therefore causes 64 times as much road wear, not have to pay 64 times as much in taxes to repair the roads?
        • 5 Years Ago
        A Hummer (assuming you mean H2) which weighs 6,000 lbs, compared to a Smart car 2000 lbs doesn't do 64x the wear.
        Tire pressure has a lot to do with it, and so does unsprung weight. (which means semis primarily do all the wear to the roads)

        The government has taken SO much money (look into CAFR scam) that the interest on all the monies taken should pay for perpetual upkeep of the roads.
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