One problem with taxing fuel is that the government is mandating that our fleet of vehicles get better fuel mileage each year, so tax revenues naturally go down in the process. If each vehicle was taxed based on miles driven, the money brought in would theoretically equal the amount of damage being done to road surfaces. Problems with the mileage-based tax come up when discussing how best to track a driver's habits. Plus, some believe that drivers of fuel efficient vehicles, which are likely to do less damage to their surroundings, should be rewarded by paying less in taxes than drivers of heavier, thirstier vehicles.
Newly appointed Transportation Secretary Ray LaHood (R) says that there isn't enough money being collected to keep up with the required maintenance on roadways, but increasing taxes in a recession is a non-starter. Instead, he's considering instituting a mileage-based tax; a decision could be made as early as this week.
[Source: Detroit Free Press]