The Congressional Budget Office has released a report on taxing the number of miles traveled by vehicles to help fund the highway system, as an alternative to raising fuel taxes.
The report, requested by Senate Budget Committee Chairman Kent Conrad, D-N.D., notes that the Highway Trust Fund is mostly funded now by taxes levied on gasoline and diesel fuel. About 25 percent of the nation's highways, which carry about 85 percent of all road traffic, are paid for in part by the federal government; the remaining funding for highways comes from state and local governments. However, fuel taxes paid by highway users do not yield enough revenue to support either the current federal spending on highways or the higher levels of spending that have been proposed. The Obama administration wants $556 billion in additional spending over the next six years on transportation projects, according to CBS News.
As an alternative to raising fuel taxes, one possibility would be imposing taxes on vehicle miles traveled. In order to impose so-called VMT taxes, however, metering devices would have to be installed in vehicles to keep track of the number of miles traveled. They might work similarly to transponder systems such as EZPass, which allow drivers to prepay tolls in 14 states.
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“One source of uncertainty is the cost to install metering equipment in all of the nation's cars and trucks,” said the report. “Having the devices installed as original equipment under a mandate to vehicle manufacturers would be relatively inexpensive but could lead to a long transition; requiring vehicles to be retrofitted with the devices could be faster but much more costly, and the equipment could be more susceptible to tampering than factory-installed equipment might be. Despite the various uncertainties and impediments, some transportation experts have identified VMT taxes as a preferred option.”
There also could be privacy implications in installing such devices. “The idea of imposing VMT taxes that vary by time and place has raised concerns about privacy because the process of assessing such taxes could give the government access to specific information about how individual vehicles are used,” said the report. “Various approaches have been suggested to allay those concerns, including restricting the amount of information about a vehicle's travel that is used in billing or restricting the kind of information that is conveyed to the government; making devices appealing to the public by allowing businesses to use them to provide other services, such as real-time traffic reports or electronic payment for parking; and allowing users to opt out of paying per-mile charges and instead pay higher fuel taxes.”
Transportation Secretary Ray LaHood proposed a mileage tax in 2009, but the Obama administration quickly dismissed the idea. However, the new CBO report said the VMT could be a "practical option" with electronic metering and billing technologies.
13 Comments
After the mddle east settlews down, why not add another $1.00 per gallon tax, and give a credit to all taxpayers of 10,000 miles per year @ 20 miles per gallon or a credit of $500. If one has more than one car and/or a gas guzzler(s), they pay more.If one does no even own a car or they have a car with less 20 miles per gallon, they get a gift credit. The extra money collected could be used not only the repaior the the poor shape of US infrastructure vs. other countries, but perhaps also for research in more efficient recovery of the US' undeveloped resources or underdeveloped (up to 20% of all crdue is not extracted due to the cost increase of geting the "last drop." Non-road use, e.g., farmers on dirt roads, non-vehicle use (currently now alrfeady exempt from the tax via refunds), etc., would have to be worked out.
Posted by: berttedwards | March 30, 2011 10:42 AM
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Forget the increased taxes - start sunsetting roads! If some special interest wants it that badly they can pay for it and charge for it too.
Withholding of Federal highway funds is one of the primary threats that Washington has over the States. Big news splash: the interstate highway system is built now. It's up the States to maintain the roads, but Washington can't give up control of those funds anymore than a heroin junkie can give up the needle.
Posted by: bill94566 | March 28, 2011 12:06 PM
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LOL, Bob! What a great idea. The only problem is the part where you say "immediate and accurate" - given the fact that we'd be using gov't employees, I don't think those are the correct adjectives...
Posted by: Kt n RAL | March 28, 2011 12:00 PM
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Is there no end to what these bumbling idiots will dream up. If it is an increase of the DC power base by employing more people, my recommendation is a toll both every mile on every road. I am really getting tired of lawyers running Congress. Any business person would know all this is, is switching one user based tax for another.
And for all of you calling for tar and feathers, this is not funny we really have to get a lot of these people out of DC now. I truly believe that if we wait for the next election it will be too late.
The irs hired 15,000 people to enforce the medical insurance part of the health bill and now that it looks like the health bill is going in the dumper they need to be let go not reassigned. And if Shulman let's them stay he should fired.
These are tough times and all of my clients have had to let employees go, yet the feds are still skipping merrily along with their let them eat cake attitude.
Cut to the bottom line here, this is not about user taxes this is about spending 556bil. Barry is a vote getter and knows how many votes that 556bil will get. I have a vision, a vision of a nation with nice new roads and no freight to be hauled.
Posted by: MR BILL | March 28, 2011 11:28 AM
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Considering the fact that as a rancher my husband is seldom on any thing but a dirt road ,which is lousy BTW, and the fact that where any of us drive is no one's business; this sounds just like BIG Government AGAIN. How about if we tax Pelosi for the air miles she has logged at OUR expense!! We all have to bite the bullet to straighten the budget out but I vote we star by thinning out the herd of federal employees and staffs that do NOTHING or duplicate efforts. How can we expect anything better with career politicians in charge who have seldom lived in the real world. Term limits would make them live out here in the mess they create.
Posted by: Sickofchange | March 28, 2011 9:50 AM
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I'm not saying I totally agree with this VMT, mostly because the privacy issue, but some don't understand why this is being proposed. We are in a technology transition period. Hybird and electric cars didn't exist 20 years ago. Gas or diesel was your only option and it was fair; the more you drive the more tax you pay. New fully electric cars are using the roads and bridges but not paying for their creation or maintainence. To lessen our dependence on foreign oil will involve a change on how we are taxed. If you could solve the issues of privacy and double taxation, then I would be for it. How about monthly uploads of the odometer with no GPS tracking, and a fuel tax deduction or credit on your 1040?
Posted by: Taccount | March 28, 2011 9:07 AM
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The time has come for the government to cut their spending! Not impose additional taxes on us! We pay for our license tabs, we pay fuel tax, and now they want to tax us on our mileage? The next thing you know, they will want to start charging us taxes as a taxi cab business when we car pool! This is the most ludicrous idea I have ever heard. In my economics class I have learned that the government, because it is not a business, has no incentive to minimize its costs - well, we as citizens need to start insisting that the government start cutting costs!
Posted by: StAlice | March 28, 2011 8:56 AM
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Maybe we can raise revenue AND provide full employment. Why not hire someone from D.C. to ride along with every motorist and log the miles we drive. Not only would this provide new jobs but we'd get an immediate and accurate mileage count. Goofy? Not as goofy as what is being proposed!!
Posted by: bob from elgin | March 28, 2011 8:46 AM
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Why tax both mileage and fuel for the same activity? To trick us?I also think it is counter productive because we should be encouraging efficient mileage.
The fuel tax is one of the few I actually agree with. As long as the funds aren't diverted, it seems a fair and efficient way to pay for the roads. The tax may be raised if it isn't enough, but you don't have to trick us by going into another pocket for the same amount of funds. The cost of collecting the tax is a complete waste as increasing the fuel tax will cost nothing. Counter productive and costly.
Posted by: Frank22 | March 28, 2011 8:22 AM
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Isn't fuel consumption the same indicator as mileage for road use? Why incur the costs for implementing a tax on mileage? This is absolutely ludicrous.
Posted by: Serena CPA | March 28, 2011 7:46 AM
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I'm a Marine, too, Ben - these idiots should be tarred, feathered, and run out of Washington on a rail. CUT SPENDING. Eliminate Congressional pensions. Period. End of conversation.
Posted by: beckmill | March 28, 2011 7:42 AM
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Imagine that. The government will not only tax your mileage they may be able to track where you go.
Posted by: Murphy | March 28, 2011 7:16 AM
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Every incumbent Congress person needs to be recalled for even considering additional taxes. The need is for cutting spending not adding new taxes or raising current taxes.
Posted by: benusmc | March 28, 2011 7:08 AM
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