The Mileage Tax Genie Is Out of the Bottle

Last week, Obama DOT Secretary Ray LaHood caused quite a buzz by discussing, in an interview with an AP reporter,
the idea of taxing motorists on the number of miles they travel rather
than the amount of gas they burn. White House Press Secretary Robert
Gibbs quickly came out and publicly contradicted LaHood, saying a miles-driven tax "is not and will not be the policy of the Obama administration."

2412864382_422c656585_m.jpgPhoto by kbaird via Flickr.

That hasn’t stopped members of the Streetsblog Network from debating the idea and analyzing whether it has any prospect in the foreseeable future. As The Transport Politic said:

problem with the gas tax system is threefold: for one, it hasn’t
changed since August 1993, meaning that its relative value has declined
over time as inflation has taken its toll; second, people started
driving less beginning last year;
and third, as people drive more and more fuel efficient cars — and
eventually electric ones — the fund will lose a large percentage of
its revenue since people will not be buying as much gas as before. Mr.
Gibbs’ quick response, then, doesn’t answer the United States’
long-term transportation-funding dilemma…[it] seems less thought out
than we should expect from an administration that claims to be concerned about the steadily increasing deficit.

The National Journal
has opened the question to its panel of transportation professionals,
and it should be interesting to see how that thread develops.

Other highlights from the network: WalkBikeCT notes an experimental solar-powered radar camera that snaps pictures of speeding drivers in West Hartford, and The Urbanophile sings the praises of Chicago. Plus, Hub and Spokes writes about "Where Things Are, from Near to Far,"  a children’s book for budding planning geeks.

  • I think taxing based on VMT is a great idea – but would require a massive investment to create a system for capturing and tracking that data. Why not just started tolling major roadways – seems a lot more straightforward and quicker to implement.

  • Wad

    It doesn’t have to be massive. There are several places this data could be gathered easily: service shops, the DMV and insurance companies could make some policy changes and gather this data.

    The problem is people don’t really want to know what the costs of driving per mile are, even if the mandate would be to make taxes revenue-neutral.

  • Charging by VMT is a stupid idea this disincentivizes the use of more fuel efficient vehicles and alternative fuel vehicles. The proper way to deal with reduced revenues is to keep raising the gas tax by a consistent amount so that enough reveue comes in, not by creating yet another bureaucracy devoted to the collection of mileage. If electric cars need to be taxed for their usage, then charge them a fixed registration fee.

  • I don’t like the idea of taxing miles travelled instead of gas usage. The environmental and geopolitical problems of car use mainly come from the amount of gasoline used, and gasoline would be the easiest thing to tax.

    If more people drive more fuel efficient cars, then yes they will be paying less for gas. It’s an incentive to buy cars that pollute less and use less gas. If we tax them for movement, however, then you might as well go out and buy a 10 mpg cheap american truck, because there’s no longer as strong an incentive to save on gas: you’ll be taxed the same as a prius driver for VMT.

    All that said, I predict that VMT taxing will NEVER become politically viable in this country, let alone in L.A.. Just try convincing 10 of your friends that it’s a good idea for the government to put GPS tracking devices on their cars so the gov can watch their every move and charge them for it. Let me know how many of your friends think that sounds good to them. And even if you can convince more than 50% of them, now you have to somehow raise enough revenue to plant a GPS receiver on every single car.

    It’s expensive, it’s not good for the environment, and it will make people worry about Big Brother. This is never going to happen here. And it shouldn’t. (Obama already shot down the rumor, so I’m not going to spend another minute thinking about it.)

    Gas tax is simpler.

  • Alan

    David has a good point.
    In Europe, the cost per litre of gas is 4-5 times the cost of gas here in the USA. That has done a good job of funding transit, as well as providing an incentive for bicycling and walking. Some people who can afford it drive their big engined cars, while others drive more fuel efficient models. Voila, the market at work.

    When gas was over $4/gallon here, many people started to use other methods of transportation.

    The difference is that in Europe, profits (taxes) are reinvested in transportation infrastructure. In the USA, the profits go to shareholders and R&D for more oil.

  • Peter

    The real point is that gas tax will not be a viable or fair source of revenue to support the nation’s transportation infrastructure in the long term. We need to tax carbon emissions, which needs to be tracked by VMT.

    People who drive very little or very fuel efficient or electric vehicles would be taxed less than those who drive gas guzzlers. If the tax were set appropriately, a carbon tax could incentivize the travel mode that produces the lowest carbon footprint – making train/transit travel less expensive than flying or driving for example.

    How to do this poses many questions. I personally like the Fastrak (toll collection) model. In-vehicle transponders could be used for many really good applications, including one’s that drivers find convenient, such as paying for parking or electric car charging and of course gasoline. Another proposal is to have insurance companies collect the info about the vehicle and annual VMT. Yes, collecting “personal” information makes people paranoid, but GPS isn’t even necessary for this technology, only a means to transmit info on a regular basis.

  • Wad

    Calwatch and Dave, where does it say that a new bureaucracy and “Big Brother” GPS systems are needed to collect VMT data?

    Yes, if a new bureaucracy or GPS devices need to be plugged on cars are needed to gauge VMT, then it will fail.

    None of these things are needed.

    The DMV, car companies, service centers and even insurance companies gather odometer information. This can easily be transmitted across the ‘Net. So David, try telling 10 of your friends about my straw-man idea and scare them out of registering, insuring or repairing their cars. ;>

    The VMT and the need to reduce oil are complementary but different goals. It was the price of gasoline that prompted people to seek more efficient cars. However, there is something called Jevons paradox, which states that any attempt to increase efficiency only leads to increased consumption of a resource. If you press for increased fuel efficiency, you are only enabling people to drive farther.

    If there should be some measure to manage the consumption of fuel, another alternative to the gas tax would be to index the tax as a percentage of the price, rather than a fixed amount. Another alternative would be to tax cars at the time of purchase and grade them on a curve. The higher mileage a car gets, the less tax is required.

  • People lie on their insurance company mileage forms all of the time. While the dealer might not lie, there are enough shady auto repair outfits that will be happy to take a cut of your “savings” in exchange for writing something else down on the invoice. The DMV only collects mileage information at the time one buys and sells a vehicle. Odometer fraud, which is currently not that lucrative unless you want to sell a very high mileage vehicle, will become more prevalent.

    The reason you need GPS is because states can’t charge VMT tax for cars that go out of the state, or out of the country. If I choose to drive to Phoenix, or Las Vegas, why should the government tax me for the miles I travel in another state? And if it were limited only to California vehicles, I would buy a condo in Vegas for $50,000 and establish residency there for the principle of it all.

    And what if people drive farther, on less fuel? More efficient vehicles will result in less fuel being consumed, much like air pollution has declined since the 1970’s despite twice as many cars and people in Southern California. You keep saying that as if it is a problem, and that’s only if they drive during peak hours. For curbing congestion during peak hours, congestion pricing, increased transit on dedicated right of way, and improved pedestrian and bicycling amenities provide more bang for the buck. If my car gets 100 mpg, and I want to take a Sunday drive through the mountains, I’m not adding to congestion. Therefore, I don’t see how that’s a problem.

  • Ok, well, I guess I can spend another minute thinking about it.

    Wad, frankly, I don’t really see how they could get an accurate dataset without GPS. What if someone changes their own oil and rarely takes their car in for maintenance? When are they going to tell someone the mileage on their car? Once every couple years? If that were the case, why not just increase the annual vehicle registration fee, and forget about VMT?

    I get that with more fuel efficient cars, the gas tax won’t be enough to pay for the services, but I’m not convinced that VMT taxing could be implemented in a way that doesn’t waste a lot of money on bureacracy to produce an incomplete data set. Toll roads, increased annual registration fees, gradually increased gasoline tax, and higher taxes for gas guzzlers at time of purchase all sound like more effective and easily implemented options than VMT tax to me.

  • Alan

    Peter, you state the gas tax is unsustainable for the long term. That assumes that the paradigm for travel (the individual automobile) doesn’t change, just the source of energy. This also assumes the costs for alternative powered cars is reduced. Toyota loses money on every Prius sold. (I assume it is to subsidize the building of the battery infrastructure). The Tesla, a fully electric car, costs over $100,000.

    By increasing the US gas tax to the European model, then alternative modes of transport will be brought up to the same level of service as the highway system, and reduces the need to build and expand more highways, whether for gas autos or electric autos.

  • Alan

    In addition to my previous post,
    By following the European model, this delays the time necessary to think of an alternative funding source, provides incentives (in the short term) to buy fuel efficient vehicles as well as investments in transit.

    In essence, this prolongs the “age of oil” by about a decade or two by reducing consumption. This allows for technology to catch up and become affordable to the average worker.

    Then the VMT tax would make more sense, and be more politically viable.

  • Tracking mileage just got a whole lot easier with MyMileageGenie for Blackberry. Simply puinch in at the beginning of the day and punch out at the end of the day and the BB GPS Keeps track of your travel during the day. It doesn’t get any easier than that.

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