Should We Tax Mileage or Fuel?

» Posted by on Jan 24, 2012 in Popular Mechanics | Comments Off on Should We Tax Mileage or Fuel?

Should We Tax Mileage or Fuel?

[Originally posted in Popular Mechanics]

The road trip–driving cross-country for days on end, crammed into a vehicle with your family–is virtually a required rite of passage for most Americans. The lure of the open road is as ingrained in our psyche and culture as the hamburger, football or fishing. So it’s no surprise that proposals for new types of taxes on these seemingly free highways–traditionally paid for by gas taxes and tolls–are causing an uproar.

Back in July of this year, Rep. Earl Blumenauer (D-Oregon) proposed a bill that allocates funds to research the effectiveness of taxing highway usage by the mile. On the surface, the bill seems to be laying the groundwork for big government to track our driving habits while simultaneously discouraging the driving of more fuel-efficient vehicles. It doesn’t have to be this way.

Most road maintenance and upgrades in the U.S. are currently paid for with fuel taxes. It has been that way for a long time. In fact, Oregon started the trend of taxing gas back in 1918 and the Federal government followed suit in 1932. For the most part, the system has kept roads and highways maintained and in working order. However, since the 1970s, average vehicle fuel efficiency has been going up even as we’ve put more vehicles on our roads. Over time, this trend has caused fuel tax revenues to decline per vehicle, which poses a problem for road maintenance and upgrades.

Some say that the solution is simply to raise our gas taxes much higher–by a dollar or more per gallon. But this solution doesn’t address the base problem: With the country focusing on using less or no oil-based fuel, gas taxes are an inflexible system of revenue generation. Increasingly, fuel usage has little correlation to actual road use. The ultimate example of that is the electric car; if it has enough range, it could drive a lifetime and the owner would never pay a penny in gas taxes.

According to others, the only equitable way to make sure that every vehicle using our roads is paying proportionally for the maintenance of them, is to charge on a per-mile-driven basis–a mileage tax. [read the entire article @ Popular Mechanics]