Mileage tax eyed as replacement for gas tax

|  July 08, 2009 |

The University of Iowa is field testing a system that will use GPS technology to track how many miles your car travels and tax you accordingly.  The stubborn refusal of this “mileage tax” idea to go away is what we get when our elected officials are too scared of the demagoguery to raise the per gallon gas tax. So timid is Congress on this that they haven’t even adjusted the 18.5 cent federal fuels tax to inflation in more than a decade.

The mileage tax is wrong in many ways. First it doesn’t promote conservation–the Hummer pays as much as the Prius. Second, it would be much easier for politicians to raise rates, compared with raising the per gallon tax which is immediately noticeable at the pump. Third this would behugely expensive to administer and track. Fourth, it’s about as big an invasion of privacy as you can get. Fifth: I could see OEMs integrating such a system into the electronics of new cars, but do they really expect the owners of the more than 100 million used cars on the roads to go out and install a system that’s going to cost several hundred dollars? And finally, I’m sure if they do produce something like this it will be hackable.

The one potentially legitimate reason for a mileage tax is that electric vehicles like the coming Chevy Volt, won’t pay a dime in gas taxes. And as hybrids and other high mileage vehicles continue to pour out onto our highways, the funds for road building and maintenance will dwindle.  This needs to be addressed. But if the political/environmental industrial complex wants us to reduce imports of foreign oil, and greenhouse gas emissions letting the electrics and hybrids avoid most of the fuel tax and forcing the petro-burners to take up the slack would be a near perfect solution.

So it seems that Congress is working at cross purposes here.  What we might end up with is a hybrid system, where new hybrids and electric vehicles are charged by the mile and the gas and diesel crowd continues to pay taxes per gallon. But that’s a pretty ugly solution–a lose/lose for everybody, the worst of both worlds.

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