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:

The 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.

  • Larry Littlefield

    If they do nothing, federal transportation funding ebbs away.

    Is that a bad thing?

  • I don’t understand why LaHood didn’t talk about having both taxes. It’s true that every tax comes with overhead, but gas consumption and road wear are two distinct “negative externalities,” and we want to discourage both.

    Of course, there are other negative externalities as well. People have been talking for a while about a “carbon tax” to discourage emissions of carbon dioxide. What about a carnage tax? An unwalkable-communities tax? A rubber tax?

  • Boris

    A mileage tax is a bad idea because a mile in one place is “worth” more or less than a mile in another. You would essentially be rewarding car owners in dense metropolitan areas and punishing those who live in the suburbs. The latter is a good thing but the former is not.

    Roads should be priced, not driving, although the amount of driving would be used to gauge the popularity of a road.

  • Larry Littlefield

    “What about a carnage tax?”

    Perhaps that’s what $1,200 per year in auto liability insurance in Brooklyn is. And I imagine my right is about the lowest — those with a history of carnage pay far more.

  • I don’t know why people think “pay as you drive” tax is such a great idea. A conventional gas tax is essentially the same thing. It penalizes those who drive more and drive heavy inefficient vehicles and benefits those who do the opposite. Simply the conventional gas tax should be raised and pinned to the rate of inflation so it never looses it revenue generating potential.

    If a “pay as you drive” tax is instituted it will undoubtedly force the creation of an awkward inefficient bureaucracy needed to collect the taxes which would be on top of the current bureau needed to collect conventional gas taxes.

    The only real weakness that I see to the conventional gas tax are electric cars. However this could be readily fixed by a proprietary metering system that couldn’t be circumvented when you plug in your car. The power company would collect the road tax from this special meter that only measures the electricity used for the electric car. This type of system would not be much different then that of gasoline stations that currently collect conventional gas taxes.

    I believe, that while the points brought up here are legitimate concerns, these problems are easily solved without any additional awkward taxes.

  • Yes, Andy, but then you’re talking about instituting a vehicle electricity tax – which currently doesn’t exist.

  • I don’t think we could have a vehicle electricity tax: too many people would cheat by taking electricity from other meters that do not have this tax.

    The one benefit of a VMT tax is that it could include toll-everywhere congestion pricing – which is essentially the same thing as the road pricing that Boris talks about. There will inevitably be a shift from the gas tax to a VMT tax when plug-in hybrids become popular, and we should take advantage of it by including toll-everywhere congestion pricing.

    By reducing or eliminating congestion, toll-everywhere congestion pricing would eliminate most of the political pressure to build more freeways.

  • Borris it think both a VMT tax and road pricing should be used simultaneously. People who drive farther in the suburbs should have to pay proportionally for that road use and for the inefficiency of suburban life. While in dense urban areas road pricing could be utilized so as not to encourage driving where it is not necessary or safe.

  • Rhywun

    Interesting article about Chicago. The tale of “two Chicagos” reminds me very much of what’s going on in my own NYC.

  • bb

    The gas tax doesn’t work because it doesn’t ever get raised.

    My state gas tax raised in AZ 1992. We just passed a half penny county sales tax for transportation in 2004.

    VMT is great

    tracks the time of day you drove and number of hours polluting,
    Where you drove Streets, highway, impact zones, Parking, toll roads
    Speed over the limit burns more gas.
    What you drove electric, propane, or how heavy etc

    Very logical if you ask me.

  • eliot

    Am I missing something here? Wouldn’t a VMT tax be regressive, by raising the cost of fuel-efficient cars and lowering the cost of inefficient SUVs?

  • You and what army is gonna’ install one of these monitors on my car?!?!

    All do respect but get real! I think it would be much more politically feasible to raise the gas tax then it would be to FORCE people to put some monitor / “tracking device” onto ever car in America.

    There is still the bureaucracy needed to run the system which would undoubtedly parasitize some of the revenue.

    Look I understand the theoretical benefits of such a system but I’m not convinced that this idea could ever fly politically. I know I wouldn’t want one of those monitors on my car or, god forbid, bicycle! (You know “they” would push for it!)

  • Bob

    It seems to me that most of the benefits offered by the VMT tax would be just as well covered by upping the gas tax. And, the gas tax adds an incentive to drive fuel-efficient cars, since those who do pay less in taxes per mile.

    What advantages would a VMT tax offer over a substantially raised gas tax?

  • bb

    “The gas tax doesn’t work because it doesn’t ever get raised.

    My state gas tax raised in AZ 1992. We just passed a half penny county sales tax for transportation in 2004. ”

    @ bob

    1. Gas taxes results in lower EPA mpg (SUVs), because government wants you to use lots of gas and puts loop holes in the law to do use more or just holds you in court if you are not into that.
    2. Gas tax doesn’t get raised and that is the problem.

    @ Andy B NJ

    How do you feel about traffic enforcement cameras?
    One huge problem you have limited rights using your motor vehicle to begin with. Tracking is allowed we do it in Arizona. One simple example is traffic cameras which can be viewed over the Internet.

    Imagine in the future some one tries to steal you car. We track the car and get it back for you in a couple hours. Not to bad eh?

    Not using technology is simple genocide.

  • As a European who has lived in OR when they they were considering this, I think the mileage tax is an expensive distraction.

    1. It penalises fuel-efficient, less-polluting vehicles, who would pay the same per mile as V8-pickups
    2. It’s incredibly complex to enforce. Are all miles in the state taxed. What if I go to canada? Offroad miles?
    3. It is possible to avoid. Jam GPS, remove the detector, break the speedo.

    Gas tax is fair because it penalises fuel-inefficient vehicles, rewarding greener ones. It is also very hard to avoid, unless you fill up out of state or have access to tax-free farmer fuel. In the UK they dye farm diesel red to detect that.

    Mileage taxing is just a workaround for the problem that raising Gas tax in the US is viewed as a politically unacceptable, but the costs are high. Better to bite the bullet and raise fuel to something even slightly closer to EU rates

  • Thanks a lot, Rhywun (from The Urbanophile)

  • The obvious enforcement problems would make this very difficult to enforce and having my mileage numbers something that government can monitor seems somewhat problematic. We have a very UNCONNECTED system that could in some respect track users with traffic cameras in different cities. I think with these cameras privacy laws should force destruction of this material after a reasonable number of days and make it illegal to share this information (from cameras for traffic enforcement) between agencies. bb, you may think it’s trivial and surely they can track us other ways but there should be some limits especially in areas like this. If you want mileage tracking you set up different systems in different areas to reflect the costs of those areas (i.e. tolls on highways, and congestion pricing in cities–and I’m sure you can work out some pricing scheme for suburbia which is less invasive)

    Also, I don’t think it’s necessarily such a great idea. I understand that high pollution cars and driving a lot are different externalities but that doesn’t necessarily mean they need different taxes. I see a higher gas tax as something that will have a greater chance of convincing users of low MPG cars that drive a lot to switch to high MPG cars and I don’t think the mileage tax will have as much effect on reducing the amount people drive. I also see it as a rural tax. I am very pro urban but (assume overall pollution is the same) the city driver who drives 50,000 miles is doing a lot more damage in many ways than the rural / intercity driver who does that. Somewhat in terms of infrastructure but also how he drives, who he has the chances of hurting, etc. I am not supportive of having such a driving culture but I think our driving culture has different impacts in different places. Expecting to have a cheap car in NYC is not the same as expecting the same thing in the rural U.S.

  • bb,

    I have no problem with Red Light Enforcement cameras as long as the tickets do not have a “point” value attached to them like here in New Jersey.

    You also still don’t address my questions about the bureaucracy and the political fight that such a proposal would cause.

    Also, how is “Not using technology is simple genocide”???

    As many others have said, there are too many problems with such a program to make it viable or even desirable.

  • All you people hyperventilating about “OMG! privacy!!!”: you realize you have zero credibility, since right now the government can track anyone who buys a Metrocard with a credit card? They’ve had this ability since Metrocards were invented but nobody said boo. Meanwhile, people are so concerned about anything that might possibly inconvenience drivers. The hypocrisy is pretty sickening. And that includes the NYCLU.

  • Cap’n,

    I don’t have a cell phone and don’t have “Easy Pass” either. The first because I’m cheap (and lived fine for decades without one) and the latter strictly because it can be used to track your movements. Cell phones can be used for that too!

    I do usually buy my NJ Transit tickets with credit but they don’t have a means to know when you use them. Also I typically buy a Metro Card with cash.

    I’m sorry Cap’n but I’m not willing to go down that slippery slope to a Big Brother society even though I know there is not much we can do about it in many respects. This is one aspect where I want to maintain control!

  • I’m definitely not singling you out, Andy. But I just don’t get why people say “oh, you can’t track drivers!” and then as soon as the push for tracking drivers (congestion pricing, mileage taxes) stops they lose all interest in civil liberties – and they never once mention that transit users have been tracked for years. It would be one thing if they didn’t get so concerned about the tracking. Tracking drivers is a serious issue, but tracking transit users is a non-issue. How am I not supposed to get offended by that?

  • Lee

    why not just tax the purchase of energy, period? Take the energy content used in calories, heat-units or whatever that was purchased, and index the tax to inflation. Anything that could be used as fuel would be taxed. So now we have a sales tax that encourages everyone to consume less energy, period. This would also encourage better land-use policy, healthier diets, and exercise. The money from the tax could be used to subsidize energy-efficiency projects like weatherization, local farming/gardening, bicycle/transit/rail, etc.

  • Cap’n, I don’t think you’re right. There is a difference between infrastructure based tracking (congestion pricing, metro cards) which can tell when anyone has passed a certain point and individualized tracking like being forced to put a device in your car. Both are tracking, yes, but they are different. One you can avoid like Andy does by not using metrocards but instead paying cash. But this gives you certain opt out choices. Also, this is more a part of your history and there are often laws in place about how this data can be shared. I reject the idea that because you give up certain pieces of privacy that you’re a hyprocrite when you request some types of privacy. I do not think it would be proper to be forced to have a device in my car. But I can opt in or out of most tracking systems and make sure proper privacy controls are in place like the various CLUs advocate for on systems such as EZ pass, metrocards, or search engines. I do think the metro card issue is lesser because it can be avoided although I should know better what laws are in place for what is done with the data about point of entry (although, this is clearly a less precise measure than other things). But, I don’t have a problem with congestion pricing if data is dealt with properly so that it does not become a lifelong record but at most a record of where you entered the pricing zone until your account is settled and then data is destroyed. The same data issues would alleviate some of those issues with taxing mileage but I still don’t get how they’re going to put these devices in my car nor am I sure I would trust that.

  • Yes, the AP interview with Joan Lowy received much attention….Gone unnoticed in that interview to a great extent was, “LaHood said he firmly opposes raising the federal gasoline tax in the current recession.”

    VMT proponents need to support increasing gas taxes to make their point credible as opposed to self-fulfilling (that VMT fees are necessary because gas taxes haven’t been raised).

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