Saturday, November 22, 2014

Put the breaks on the per-mile vehicle tax

America’s roads and bridges are crumbling.

Historically, motorists have paid for roads with a gas tax, but it has not kept pace with inflation, nor wirh fuel-efficient hybrid and electric cars that use little to no gas. Some states therefore are considering charging per mile instead of per gallon.

Strangely, this un-progressive idea is gaining traction in progressive states. California, Washington, Nevada and Massachusetts all are kicking the idea around. The liberal Center for American Progress likes it too.

Oregon, one of the few bright spots for Democrats in this month’s elections, seeks 5,000 volunteers to pay 1.5 cents per mile instead of 30 cents per gallon as part of a pilot project.

A mileage tax does have a progressive veneer. It would raise desperately needed money for infrastructure, and it would benefit low-income drivers who typically own older, less-fuel-efficient vehicles.

Scratch the surface, though, and one finds conservative outcomes that will harm the environment, climate change and civil liberties.

Sure, some of the people who drive gas-guzzlers are poor, but many more are just selfish owners of pickup trucks and SUVs. They will save big with a mileage tax.
MOSCOW, RUSSIA - JUNE 2, 2013: White Hummer H2 limousine at the city street. Art Konovalov / Shutterstock.com
MOSCOW, RUSSIA – JUNE 2, 2013: White Hummer H2 limousine at the city street. Art Konovalov / Shutterstock.com


The Oregon proposal illustrates this. Imagine two Oregonians who each drive 10,000 miles per year. Driver A has a hybrid car and gets and average 45 mpg. Under the current per gallon tax, she pays $67 per year. Driver B has an SUV that optimistically gets 17 mpg. He pays $176 in gas tax.

Both would pay the same $150 for 10,000 miles under the proposed mileage tax. Energy-efficient Driver A winds up paying more than double what she paid under the gas tax so that Energy Inefficient Driver B can pay less, and the state can raise some money.

The mileage tax therefore eliminates one of the biggest incentives for choosing a fuel-efficient vehicle.

Supporters spin that as a plus. Everyone pays the same for the same amount of driving, they say. Yet their impacts on the roads, the planet and society are not the same at all.

The idea of using the tax code for social engineering is nothing new. Elected officials from the right and the left hand out tax breaks to things they like, and impose heavier taxes on things they don’t. They levy sin taxes on alcohol, tobacco and marijuana (where applicable) to discourage consumption. They let people who pay mortgages or have children pay less to encourage homeownership and reproduction.

Larger, heavier vehicles cause more wear to pavement than lighter, fuel-efficient ones. The gas tax captures that disparity. (If Oregon really wants to target the people who cause the most wear and tear, it would ban or tax the studded tires that needlessly chew up the roads to the tune of $50 million every year.)

Meanwhile, the more gasoline a vehicle burns, the more greenhouse gases and other nasty chemicals it emits. Society has a compelling interest in encouraging more-efficient use of natural resources and keeping our air breathable. Making people pay higher taxes for polluting more is one way to do it. A mileage tax, on the other hand, allows people to use as much gas as they like, as inefficiently as they like, without any additional consequence.

Motorists would also lose a great deal of privacy under this scheme as someone would need to track their driving to tally their mileage.

Oregon hopes to get around the Big Brother aspect by contracting GPS tracking and billing to private companies. The companies would store the personal travel information, not the state. But it’s hard to take comfort in that. We have all how seen how well the private sector shields personal data from government snooping (or from hackers). All it will take is one call from an NSA agent, or overzealous police officer, and where one has traveled winds up in a government database. (Such information can also prove useful in contentious divorce cases.)

The Oregon Department of Transportation also figures that those private partners will not charge the state much because what they really want is access to the personal information of all of the state’s vehicle owners. Rather than bill the state, companies would use that data to sell things like insurance and maintenance warranties. If you want to drive, you’ll have to agree to receive more junk mail and aggressive marketing of dubious services. Seeing as those companies will know everywhere you drive, they’ll be able to target their pitches.

The mileage scheme turns out to be a money-loser, too. According to ODOT, overhead on the gas tax is about 0.5 percent in Oregon. Under the mileage tax, even once upfront implementation costs are paid, overhead runs about 5 percent of gross revenue. For the state to maintain its current revenue, it will have to charge motorists more in aggregate just to make up the difference, let alone actually raise more money for roads.

Many states are in a transportation funding hole because lawmakers feared raising the gas tax to keep up with inflation and the marketplace. Sadly, the mileage tax is not the answer.

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