Gas tax vs Mileage tax

GTT,
if the federal gas tax hasn't gone up in 20 years, why not a modest (or even significant) increase to it? Why an additional tax?

For those who don't think this would be an additional tax just look into the history of the federal income tax. The thought was it would never be over a few percentage points when it was first enacted. No one really thought that anyone would pay more than 2 or 3% of their income to the federal government... My how that has changed, and in addition to other new taxes.

In general, the problem with funding the federal government is NOT tax revenues, but rather SPENDING!!!! The federal government is like a drunk wife with a Visa Black card with no limit... (well, they keep voting to increase their own limit). It is disgusting the way our federal government spends!
 
THEU, I'm very sensitive to the issue of spending and scream alongside you that DC in particular needs to make some serious cuts.

Transportation is a bit different though--again, because of the user fee principle which was enshrined in our public policy in the 1950s. Motorists want roads; they pay for road to be built, operated, and maintained.

But gas tax revenues have been flat for many years. Take a look:

Figure1.jpg


So, yes, we could raise the gas tax. We could also index the gas tax to inflation. Either of those causes a political shitstorm because Republicans (typically) scream about taxes presumably not realizing that, at least at the federal level, gas tax revenues are by law ring-fenced into the Highway Trust Fund and spent only on transportation uses.

Why change? Again, if we look ahead into the not-very-distant future it is clear that our vehicle fleet is evolving and will soon include electrics, plug-in hybrids, hybrids, and very fuel efficient ICE vehicles. We need to start preparing now for a new revenue source in light of that. If we don't, highway revenues will erode, we will see perpetual fights over raising the gas tax (which will be necessary), and people will pay highly inequitable amounts for road use as their fuel efficiencies diverge, distorting the user-pay principle. Meanwhile Congress and state legislatures will be forced to supplement the dying Highway Trust Funds with general tax revenues (in fact they have alreaday started) which will END the user pay principle, to say nothing of taking money away from other government functions.
 
I think any tax is going to be far more palatable if the taxpayer doesn't have to physically do anything and has it included in a normal payment, so that's a very good point AwK. If the gas tax were the same $ amount but people had to figure it out manually and report it in April there would probably be very little compliance and a lot more bitching about the gas tax.

For that reason I just don't know how they implement this and actually make enough money to make it worthwhile, but the conversation on revenue for transportation projects should be ongoing, even if this flops. We're not driving less, it's not costing less to build and maintain roads, and yet we're paying the same gas tax with more efficient cars. We should all be able to foresee the problems with that.
 
The gas tax as is, is fair. Everyone pays the same amount per unit of fuel. The more miles you drive, the more fule you buy and the more taxes you pay. The 5 mpg'ers appear to be engaged in a more intense level of profit making per mile or unit of fuel as they are still in business.

I cannot imgaine a scheme based on mileage tracking that would not be subject to profoundly higher orders of magnitude in both digital and analog manipulation, let alone complexity and operational cost.

GTT, how do you implement an effective, accurate and efficient mileage tracking scheme? How much would it cost per vehicle?
 
Maybe another way...
We could tie it back to the annual inspection process that every driver must go through anyway. Maybe you elect to pay a portion on a montly basis based on your typical driving habits. A guy that drives 15K per year might go ahead and pay for 1K per month and then settle up for the balance when he goes in for the annual inspection. The guy doing the inspection reads the odometer, plugs it in to the database and out spits a differential between 1yr ago and now, and backs out any amounts already paid.

1. makes the fee manageable on monthly basis
2. makes it more or less invisible much like auto debit does with some bills now
3. makes the final sticker shock (settle up time) more bearable
4. uses existing processes and infrastructure to a large degree
 
I wouldn't have a problem with this tax if I had a mass transit system available to me. I live in a rural area, to go grocery shopping, I have to drive 30 miles one-way. There are *no* other options to get food, work, etc. If I lived in a medium to large city, there will be far more options for me to get around.
 
I'm of the opinion that you should pay for that 30 miles you drive. As an earlier post said, you chose to live there. There are costs and there are benefits to living in the hinterland.

I'm not sure how fuel taxes are divied out now to regions/states but knowing that my tax for driving my 30 miles went to fixing the same 30 miles of road would go a long way toward making me ok with this. I'll help pay for the part of the road I drive on. I don't want to pay for 30 miles in Cali or 30 miles in Odessa for that matter.
 
I'm of the opinion that you should pay for that 30 miles you drive.
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Why? Why does it bother you? The people I know that live out in the boonies are more self sufficient and actually consume less than those in the city. a lot less. Maybe you would feel better if we had to stop at every county line and show our papers. People live outside the city because they don't like the city, the crime, the high taxes, the crap, the fast pace, the crappy schools. I'm the opposite, i like the urban life but people should be free to move out and not be penalized for it. if city taxes were not so high to begin with because of the corruption and waste, more people might move back. are "progressives" pissed off that people are moving away and they can't get a piece of them too? well, get over it, you have the city.
 
Chose to live here? In my case, sure I suppose I chose to live here because of the job and opportunity, but for most people here they have no choice but to live here. This is where they grew up, this is where they went to school, this is where their family lives, this is where they work for Wal-Mart or whatever, there is really no choice for them.

Right now, if you lived here and work 30 miles from your job site, and make minimum wage, the cost of gas is a very real burden. Considering an average of 25miles/gal, minimum wage, and cost of gas, almost 20% (or 1 day) of your wages go to just gas. Now you want them to pay for the miles as well? As of the last census 15% of Americans live below the poverty line, the difference at the top end of wealth versus the lower end is getting wider and wider. There are a lot more pressing issues then trying to figure out how to tax the people more without actually coming out directly and saying "we are instituting a new tax."
 
general and Rayug are trying to pull on emotional strings and drag this into a class warfare thing. it's not about that. it's about how to fund transportation initiatives going forward, especially considering how fuel efficiency will affect how much gas is purchased.

some people believe that a more responsible and equitable way to generate that revenue is per mile rather than per gallon. it doesn't mean they hate commuters or want to "stick it to them" anymore so than gas-tax proponents hate big trucks and want to "stick it to them".
 
I suppose the biggest problem is that you are making the assumption that it will either be a gas tax or a miles driven tax. North Carolina has looked into this as well. as far as I can tell it would be a supplement to the state gas tax we already have. Maybe I doubt the motives of our government more then you, but from what I can tell they tend to just tack things on and never throw out the garbage.
 
Like I said earlier, that is a fair suspicion (that the government will keep the gas tax) and I am also leery of it.

The only possible justification for keeping a gas tax is to internalize the external costs of fuel (emissions), but that should amount to not much more than a few pennies.

Having said that, if the gas tax is kept, it will surely be used to finance non-transportation functions, and I find that unfair and deplorable. Purely from the perspective of highway finance, though, the mileage tax would correct for the "original sin" of the gas tax (that it was never indexed to inflation and that it didn't account for improvements in fuel efficiency) and make it fair and sustainable.
 
it's about how to fund transportation initiatives going forward, especially considering how fuel efficiency will affect how much gas is purchased.
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How about we cut back all of the unnecessary spending first and see if we have some money left over for infrastructure. i like fried shrimp as much as the next guy but i could care less if we spend $500,000 to see if they can run a 4.4 40 on a treadmill. There are literally hundreds of thousands of programs like this.
The Link
 
general - don't obfuscate the issue. we will obviously have a need for transportation money going forward. that money will need to come from somewhere. currently it comes from the gas tax. this is a discussion on whether that is the most efficient and equitable way of collecting the money, and whether it will collect enough money going forward considering the fuel efficiencies and other fuel standards coming. it's got nothing to do with shrimp.

you are free to disagree on the merits of a mileage tax vs a gas tax, but spare us the left-field links.
 
ok, a mileage tax is not equitable and violates equal protection. it would also cause privacy concerns if the government had to install a gizmo in your car to track it. If there is no gizmo attached, it would increase spending because you would have more tax forms and departments to enforce it. There would be tons of fraud. People live where they live. you can't implement a tax that taxes only those people that live farther than other people do from their workplace. There is probably not a more corrupt industry than how highway contracts get bought and sold and the maintenance of same. There are plenty of ways to save money that get ignored. The gas tax is high enough to pay for infrastructure. We do not need to be taxed more to fatten the wallets of the politicians and the contractors. They need to find another source for revenue than a mileage tax. I agree that the gas tax will become more obsolete as cars become more efficient and people purchase less gas. States are already feeling a crunch because people drive less during the recession but like all politicians, they screwed up by not taking into account recessions in their calculations for revenue. Less waste is the solution.
 
then you have to think about transportation costs. you have salesman that put hundreds of miles a day on their cars, businesses for transportation go thousands of miles per day. it would increase the cost of everything. keep in mind that our infrastructure should be able to be paid out of our income tax. that is what it was designed for. take an additional sales tax from tires and auto products to pay for the roads if we must keep the current corrupt system in place, god forbid they actually try and run the system efficiently.
 
general, the concerns expressed in your last post are entirely valid and reasonable. I only disagree with a few of your assertions. First, the mileage tax is not inequitable and does not violate equal protection. In fact, it's more equitable than a gas tax. Secondly, if it replaces the gas tax it adds absolutely nothing to the cost of doing business for salespeople and others who drive a lot. As for the rest, I can tell you those of us who work in the transportation industry are working very hard to address privacy concerns and have successfully tested several work-arounds to that concern. We are working to develop and test anti-fraud systems and methods of payment that are cheap and easy and we have prototypes that actually outperform the gas tax.

I'm surprised you would propose paying for infrastructure out of the income tax which is by far the most costly to collect and fraud-ridden tax that we have.

As for corrupt highway contractors, there is probably some truth to that and I agree that there is room for improvement in the way that highway departments (as with the rest of government) spend money. But if you look at my above post that shows gas tax receipts over the past several decades, there is no denying that the infrastructure sector has been squeezed harder than most.

Transportation infrastructure is one of the most socialist sectors of our economy. There is hardly any attempt to use market forces and pricing in the planning, design, finance, construction, and maintenance of facilities. Those of us who believe in free markets make no exceptions for transportation, but it's going to a very long road from the status quo to a more rational market approach. Substituting the mileage tax in for the gas tax is but one tiny move in that direction.
 
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