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New DOT Boss Touts “Per Mile Pricing”

Ray La Hood points to what is becoming, in light of the flagging and insufficient system of fuel taxes, an increasingly likely (and good) future scenario:  Rather than gas taxes, drivers will be charged for the miles they drive.

[Update: Political damage-control moves faster than mere bloggers:  Obama says no to VMT tax, via Ryan Avent]

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This entry was posted on Friday, February 20th, 2009 at 3:04 pm and is filed under Cars, Commuting, Congestion, Energy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

12 Responses to “New DOT Boss Touts “Per Mile Pricing””

  1. 2fs Says:

    Good idea – as long as there’s a multiplier included so lardasses in their Hummers pay more than Mini Cooper-driving me… It shouldn’t be directly proportional, because gas usage isn’t the only thing to be mitigated, of course – but then again, huge vehicles impact things negatively more than in just low mileage: wear on roadways, visual obstruction, traffic efficiency (since they take up more space on the road, as I believe you’ve pointed out here before), etc.

  2. MikeOnBike Says:

    [as long as there’s a multiplier included so Hummers pay more than Mini Coopers]

    In that case, the per-gallon gas tax is quite suitable, since fuel economy is an automatic multiplier. Throwing complex GPS technology at the problem is just a rube goldberg way of achieving the same effect we already have.

    From the article:

    [The gap between money raised by the gas tax and the cost of maintaining the nation's highway system and expanding it to accommodate population growth is forecast to continue to widen. Among the reasons for the gap is a switch to more fuel-efficient cars and a decrease in driving that many transportation experts believe is related to the economic downturn. Electric cars and alternative-fuel vehicles that don't use gasoline are expected to start penetrating the market in greater numbers.]

    If there’s a decrease in driving, then taxing by the mile will also decrease. (Duh?) If there’s an overall gap in funding, then the overall taxes need to to up, no matter how they’re charged, per gallon or per mile. (Duh?)

    That leaves two real issues with the gas tax: First, as cars use less gas, the per-gallon tax needs to go up to maintain constant revenue. Most countries outside the US already have higher gas taxes and more fuel-efficient vehicles, so there’s no mystery how to solve that problem.

    The longer term issue is that alt-fuel vehicles pay no gas tax at all. We could solve that problem by taxing those vehicles per mile. Or we can tax the alt-fuels if used for transportation. That’s already done for some fuels which have both transportation and non-transportation purposes.

  3. Brad Templeton Says:

    This is a horrible idea, makes no sense, and is actually dangerous. Since burning fuel is probably the most destructive thing done by cars, gasoline is is more than just a proxy for miles traveled, it’s a direct disincentive towards inefficient vehicles.

    And it’s possible to track miles from the odometer, we don’t need any GPS. In spite of promises that the GPS logger in your car would not be used to betray its owner, trust me, this information very frequently gets repurposed, no matter what the intentions of the people who initially put it in. If we’re to have it, let’s have it for something really useful to the driver.

    The only thing GPS logs allow is congestion charging, and there are easier ways to do that too (parking tax.)

    Why on Earth do people think this is a remotely good idea?

  4. mdf Says:

    2fs: as long as there’s a multiplier included so lardasses in their Hummers pay more than Mini Cooper-driving me…

    Not exactly sure why Hummer’s get people so outraged; there are hardly any of them on the road:

    http://en.wikipedia.org/wiki/Hummer_H2#Yearly_American_sales

    As for charging people due to “damage” to the road, it’s not difficult to show that under such a system semi-trucks would be paying over 99% of the costs.

    In addition to the objections raised by Brad Templeton, I’d note that underlying all these proposals is the ideological position that the government is entitled to a fixed or increasing revenue stream. In a world where 500,000 people per month are being kicked out of work, and wages are dropping, this kind of attitude on the part of the state seems a bit rich. Why can’t they tighten their belt like everyone else has to?

  5. Adam J Says:

    An idea that’s been tossed around here in the UK for years (mainly by non-politicos, I should add) is the idea of scrapping the car registration tax and putting all the extra costs on fuel.

    In that way cars become cheaper to buy, but the day-to-day running costs are more tangible. It raises costs for those who burn the most fuel (which would undoubtedly get more people switching to public transport for longer trips and turning to bicycles for shorter ones), thus discouraging overuse.

  6. Tom Says:

    Why not do both? The VMT would be a road use tax, and the gasoline tax would be a environmental impact tax.

    The incentive to move to more fuel efficient cars would remain intact. The addition of the VMT would be a disincentive for sprawl. We still need to pay for the roads, even for the greenest of the green road users.

  7. Tom Vanderbilt Says:

    Brad, and others, I see your points — the issue here though is not simply declining revenues as engines become more efficient (even if most of that efficiency is just plowed back into horsepower and added weight), but what to do as we begin to introduce larger numbers of plug-in electrics, which while environmentally better still have all the other negative impacts of other cars — the damage to the infrastructure from use, congestion, etc.

    Oregon, in their pilot program, has a system for paying the VMT tax at gas stations themselves, which somewhat (but not entirely) gets around the privacy question.

  8. mdf Says:

    Tom: The addition of the VMT would be a disincentive for sprawl.

    The proper disincentive for sprawl is time: lower the speed limit, reduce capacity, or both. The biggest problem here is that these do not present the government with enhanced revenue stream options…

    We still need to pay for the roads, even for the greenest of the green road users.

    If everyone starts belly-aching about this, I don’t see why we can’t just convert the entire tax system into user-fees. This would result in substantial savings for many people:

    I don’t have kids, so I don’t need to pay for schooling.

    I don’t use public pools, so I don’t need to pay for them either.

    I don’t own a large oil company, so I don’t need to pay for depletion allowances indirectly through the tax system.

    Generally speaking, if a government bureaucrat wants to keep his job, he needs to file business plans and projected revenue streams from the user-fees he will manage, and the services he will deliver. Fail perform, he’s out of a job. Every department a profit centre!

    But this doesn’t sound like a government anymore, does it?

    Tom Vanderbilt: but what to do as we begin to introduce larger numbers of plug-in electrics, which while environmentally better still have all the other negative impacts of other cars — the damage to the infrastructure from use, congestion, etc.

    I think in Canada and elsewhere, fuel taxes are general revenue, not specifically earmarked for road stuff. If this revenue model works for the things like the military, I fail to see why it would be a disaster for the roads.

  9. Opus the Poet Says:

    First let me state that I’m car-free and have been since 1995, so whatever method is used to tax motor vehicle operators has no direct effect on me. But, the GPS tracking system bothers me from a privacy standpoint, as it would just give too much information about private individuals to the gov’t. Now how to tax electric vehicles for their road use I propose the use of a weight based tax. When I took introduction to civil engineering back in the late 1970s I was taught that the amount of damage to a road could be estimated by the product of the weight times the speed. Assuming that nobody will exceed the speed limit (yeah, right) or that everyone will speed by the same amount, then the only variable becomes the weight of the vehicle. For taxing purposes you would do a budget of expected repair costs, and using the EPA database for vehicle GVW come up with a fleet weight total, then divide the budget by the fleet GVW to find a cost per pound, then multiply the cost per pound times the GVW of the specific vehicle to find the tax for that vehicle. That way vehicles are taxed for the amount of damage they do to the roads regardless of the type of motive power.

    BTW those tests that provided the weight times speed formula also said that on roads designed to hold up to motor vehicle traffic bicycles and light motorcycles under 500 pounds GVW apply as much damage to the road as weathering without traffic. So these vehicles would be exempt from GVW tax.

  10. Jack Says:

    Gas taxes are already insufficient in funding for road maintenance. We could find enough money to make Main Street a highway and now we must allow our roads to deteriorate because we refuse to acknowledge how foolish we were in the first place? Economic reality will dictate change. Whether it comes in the form of more toll roads, higher user fees, higher gas taxes, VMT, or whatever else is seen as “fairer”, higher fees/taxes are inevitable.

    Personally I’d rather see us take the lower cost route for the long term, have Complete Streets in the urban cores, reduce our dependence on foreign suppliers, but that means the American public must reject their over dependence on motorized vehicles. It would mean we will have to get to know our neighbors better, have more civil discourse, a higher quality of life, etc. Just not sure Americans want those things as too many are now dependent on sprawl being continuously subsidized.

  11. aaron Says:

    I’m fine with gas, VMT, and congestion taxes, as long as the money is spent on more and better roads.

    Ironically, part of why fuel economy is down and people drive less is that communties neglect road maintenance and expansion. The decline in fuel economy is just a small hint of the cost, the cost in time and lost economic growth is much greater.

    But how do we correct the mis-information out there? Until people are largely aware that accelerating quickly, but smoothly is more fuel efficient than accelerating slowly and higher cruising speeds are more fuel efficient below 55mph, many of the price pressure on fuel will actually cause more congestion and worse fuel economy.

    People are driving less and inefficient vehicles are selling less, but fuel economy continues to decline. Sure, it’s plausible that fuel efficient vehicles are being retired from the fleet faster than they enter, but not likely enough to account for such a decline. And increased cell phone usage may contribute by decreasing throughput at intersections and decreased road capacity from increased following distances. The increasingly harsh and long winters certainly account for some of the decline. But, I bet the big factor unexpected consequences due to high gasoline prices.

  12. aaron Says:

    “Why not do both? The VMT would be a road use tax, and the gasoline tax would be a environmental impact tax.”

    Agreed, but it should be noted the current fuel taxes already far excede the environmental impact (Local and Fed combined). Where we come up short is the need for infrastructure, and proper allocation of funds (i.e., spending).

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