The Hill is reporting that the Obama administration is flirting with the idea of taxing cars based on how many miles they drive. From the Hill:
The Obama administration has floated a transportation authorization bill that would require the study and implementation of a plan to tax automobile drivers based on how many miles they drive.
Obama’s proposal seems to follow up on that idea in section 2218 of the draft bill. That section would create, within the Federal Highway Administration, a Surface Transportation Revenue Alternatives Office. It would be tasked with creating a “study framework that defines the functionality of a mileage-based user fee system and other systems.”
This won’t just be a public relations nightmare, but on every imaginable policy level, including environmental, health, government spending, national security, and civil liberties, this is a really terrible idea. I can only hope this is a trial balloon I can soon pop.
We already have a system for effectively taxing people to pay for the highway system based on how much they drive, it is the gas tax. It is a far superior way to pay for the highway system. It encourages people to buy more fuel-efficient cars and places a larger tax per mile on heavier vehicles, which tend to produce more wear on our infrastructure. It also makes the cost of increased driving more tangible than a miles tax would. That should more effectively encourage less driving while helping people better budget their transportation costs.
A horrible alternative
Using a vehicle miles tax instead of higher gas tax takes away this incentive to drive less and drive more fuel-efficient cars.
- Environmental - This means more greenhouse gases.
- Public Health – This will result in more car-based air pollution that causes serious health problems, like asthma in high-population areas.
- Government Spending – Health care costs are a huge driver of government spending. Choosing a policy that is worse for public health will end up very costly overall.
- National Security – This will take away an inducement to reduce our use of foreign oil.
- Civil Liberties – To make this system work requires the federal government to gather even more information about you and your movements.
- Tax Evasion – It is very hard to drive a car while avoiding buying gas, avoiding any miles-based tax system would likely be easier.
- Government Efficiency – Creating and running the new system to implement a new miles tax is going to eat up at least some of any new revenue, but since the gas tax is already in place, any increase in that tax will be pure added value.
A PR nightmare
The only logic I can see for trying to create a new vehicle miles tax instead of just raising the gas tax is that politicians have decided that raising the gas tax would be too unpopular. Well, creating a brand new tax that requires the government to create a whole new system to gather more information on people is going to be even less popular. Also, the gas tax is basically hidden in the price at the pump, getting a yearly or quarterly tax bill from the government based how much you drive makes it much easier for people to hate it.
Maybe at some point in the distant future we will be so lucky that 80 percent of the cars on the road are electric and at that point we will need a debate about a new funding source for our highways. Until then, however, the gas tax is such a radically better policy on every level that any talk of a vehicle miles tax should be dismissed forcefully.