Obama’s National Mileage Tax Is a Bad Idea

The Obama Administration has recently floated the idea of a national mileage tax. The government would install electronic tracking equipment in vehicles to determine how many miles drivers traveled, and drivers would pay the tax electronically at gas stations.

The President proposes creating a Surface Transportation Revenue Alternatives Office costing $200 million through fiscal year 2017, to study how to best implement such a policy. The new office would examine four areas including “the capability of states to enforce payments, the reliability of technology, administrative costs, and ‘user acceptance.'”

I think a mileage tax is a non-starter for several reasons.

See my piece at Big Government for my full argument.

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About Sean Patrick Hazlett

Conservative clean energy crusader, national security hawk, financial analyst, engineer, and former military officer.
This entry was posted in Business, Clean Energy, Clean Tech, Energy Security, Finance and Economics, Policy, Politics, Predictions, Taxes and tagged , , , . Bookmark the permalink.

21 Responses to Obama’s National Mileage Tax Is a Bad Idea

  1. pino says:

    The Obama Administration has recently floated the idea of a national mileage tax.

    I’m actually mostly in favor of this.

    The cost of maintaining roads doesn’t go down as people reduce gasoline use. Someone driving an electric car needs to pay for the roads in the same manner that someone driving gasoline car does.

    The idea that heavier vehicles use more gas and therefore pay more to the upkeep of the roads can be accomplished by adjusting the tax based on weight. In fact, I’m looking into this for my neighborhood. Bigger and bigger garbage trucks are destroying the small residential streets here.

    However, your points #3 and #4, which I think are much the same really, are valid. The State will have to track where you are. For example, if I drive in South Carolina, I’ll NOT wanna pay the gas tax in South Carolina AND the mileage tax for North Carolina. Invasion of privacy.

    I like toll roads better. Tolls with easy pass. No miles. No gas tax. Jut a toll from here to there based on axles.

    • Well, I don’t like toll roads, per se. But I would agree that they are a necessary evil.

      Now an electronic device in my car…that’s just creepy…

      • pino says:

        Now an electronic device in my car…that’s just creepy…

        Yes it is.

        So maybe just an odometer check with a weighting value assigned to it.

        The point is, I don’t think the gas tax is adequate any longer.

  2. Nobody says:

    To tax by weight is a good idea. But basically they should stick with the gas tax. This is the only element in the current energy policy that makes sense. I mean it’s absurd to talk about energy independence and reducing US dependence on the Middle East and then switch to mileage tax. Every time they have an opportunity to do something sensible on this issue, they never miss an opportunity to miss an opportunity

    • pino says:

      I mean it’s absurd to talk about energy independence and reducing US dependence on the Middle East and then switch to mileage tax.

      I’m not sure how making gasoline more expensive helps us to reduce our dependance.

      But when it comes to roads, the whole goal is to fund the building and repair of those roads. And what causes both, both building and repair? Why, use of the road, of course. It doesn’t matter one single iota if that use is due to gasoline, diesel, electric or bio-diesel made from french fry grease.

      It’s the use of the road.

      I get that we don’t want ‘ol Unc Sam spying on us with GPS tracking, though with cell phones and car protection systems like OnStar we’re there anyway, so toll roads are the way to go. In fact, with toll roads you can actually INCREASE the amount of traffic on the road by setting market conditions. The busier the traffic flow, the higher the toll.

      • Nobody says:

        I’m not sure how making gasoline more expensive helps us to reduce our dependance.

        They have that curve in every introduction to microeconomics

        http://en.wikipedia.org/wiki/Demand_curve

        • pino says:

          They have that curve in every introduction to microeconomics

          Well, I get that we might buy less gasoline, though Sean has pointed out that gasoline is very price inelastic. Either way, if we get most of our expensive oil from other countries or most of our cheap oil from other countries, the point remains. We’re getting most of our oil from other countries.

          I guess the point is this: What is the administration trying to do?

          1. Shape energy policy?
          2. Pay for roads?
          3. Just try to get more money any way they can?

        • Nobody says:

          @Pino

          Gasoline consumption is not very price inelastic. It’s relatively inelastic. If the price signal is sustained in time, the consumption declines. If the gasoline consumption falls, the imports/dependence decline as well.

          *** I guess the point is this: What is the administration trying to do?

          1. Shape energy policy?
          2. Pay for roads?
          3. Just try to get more money any way they can? ***

          Smart people can get all three rabbits at once with a single bullet

  3. Scott Erb says:

    Creepy is right – the government shouldn’t be monitoring our driving habits.
    More expensive gasoline would create an incentive to drive more fuel efficient cars and perhaps drive less often. I supported increased gas taxes years ago when the cost was so cheap, figuring that we were heading for a future crisis and needed to prepare. Now, though, it’s a more difficult call since gas prices are high enough that it hurts the economy.

    • Nobody says:

      Yes. But I mean if they tax drivers to finance infrastructure and the stuff through mileage tax, they increase the tax burden anyway. But at least with a gas tax they use the tax to enhance the incentive for people to cut down on gasoline consumption either through switching to more efficient cars or just simply desprawling.

    • I am OK with some sort of consumer gas tax to fund highways and encourage adoption of fossil fuel alternatives. A mileage tax only does the former and violates privacy concerns.

      • pino says:

        A mileage tax only does the former

        We don’t want the government picking winners and losers though, right?

        • Scott Erb says:

          In retrospect the interstate highway system was a huge government subsidy to the trucking industry. One wonders where we’d be if that hadn’t happened — would trains still dominate?

          • In the beginning, though, the interstate system had little to do with trucks. Eisenhower wanted emergency runways in the event of a nuclear war. National security considerations definitely had a big influence on the highway system early on.

        • Nobody says:

          *** We don’t want the government picking winners and losers though, right? ***

          Why not, if you see that the sheikhs from the Persian Gulf are winning?

        • pino says:

          Why not

          Because, the government is a horrible user of scarce resources with alternate uses.

          I want to stick it the Saudis.

          Don’t you?

          You are making the common mistake that by hurting the Saudis we are helping us; we’re not. To the degree that we are hurting the whoever sells us oil by not buying it, we are hurting ourselves in the same proportion.

          • Pino,

            I agree that the government is a horrible steward of scarce resources. However, if you agree with a mileage tax (which raises revenue), would not a gas tax be better because its raises revenue and encourages people to limit there use of a scarce, non-renewable resource?

            Your point on the Saudis is fair. In economic terms, I simply derive positive utility from sticking it to the Saudis. 😉

        • Nobody says:

          *** Your point on the Saudis is fair. In economic terms, I simply derive positive utility from sticking it to the Saudis. ***

          There is no economic rationale behind low gas taxes. It’s a result of a misstructured taxation system that tips the balance towards the Arabs, Persians, Russians and Chavez as winners. This argument would make sense if there were no taxes at all. However, the federal and state governments spend trillions on a host of projects from spreading democracy in the Middle East and containing the Russians and Chavez to maintaining infrastructure that supports the sprawl facilitated by the same gas. That these externalities are not factored into the price of gas but instead diffused over the entire economy through non gas taxes is just one big implicit subsidy to the sheikhs and domestic gasoline consumers. If this is not picking winners, then I don’t know what it is.

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