The EU

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Friday, February 20, 2009

Tax Us By Our Mileage?

In an interview with the AP, Transportation Secretary Ray Lahoodsays:
We should look at the vehicular miles program where people are actually clocked on the number of miles that they traveled
This does have the advantage of eliminating the gas tax, if you believe Secretary LaHood.

Actually, what are the odds that the gas tax will go away if we institute a mileage tax?  Those of you who picked "ZIP" were amongst the winners, along with those who picked "NONE" and "NOTA" and "ZERO."

That is not to say it is a bad idea.  But, before we jump into it we need to ask ourselves about the various possible bad outcomes.

The article goes on to say:
The idea also is gaining ground in several states.  Governors in Idaho and Rhode Island are talking about such programs, and a North Carolina panel suggested in December the state start charging motorists a quarter-cent for every mile as a substitute for the gas tax.

A tentative plan in Massachusetts to use GPS chips in vehicles to charge motorists by the mile has drawn complaints from drivers who say it's an Orwellian intrusion by government into the lives of citizens.  Other motorists say it eliminates an incentive to drive more fuel-efficient cars since gas guzzlers will be taxed at the same rate as fuel sippers.
The reason for considering these alternative (or additional) taxes is that there has been a revenue shortfall for funding highway construction and repair. (FYI:  a quarter-cent per mile works out to be $25 for every 10,000 miles driven. How long will that last?)

I am sure someone has a law of human nature named after them that points out that use taxes are not always a good way to pay for things.  For years people have been telling us we need more fuel efficient cars.  Other people (and often the same people) have been telling us we have been driving too much and need to think before we head out and that we should consolidate trips.

Guess what? Due to the strange increase in the price of crude oil last year people have been following those tips.  The result is that revenue from gas taxes have retreated.  But, did anyone pay attention in the various legislatures and consider how to make up the shortfall that they and others were in fact encouraging?  Of course not.

A hint here--the same thing could happen with taxes on cigs.  We want people to stop smoking or smoke less.  Excellent goal.  What will make up the revenue shortfall?  I wonder what our team down on Beacon Hill has in mind?

Now, back to the VMT (can European style VAT be far behind?).  As the above quote notes, this seems to not encourage the kind of public behaviors that created this mess.  So, we will have a Government entity making tax decisions based upon the type of car we drive.  That doesn't sound good.  Will the Federal Government make allowances for the fact that Montana is not Rhode Island?  When I moved from Naples, Italy, to Fairbanks, Alaska, I was very happy that I had traded my Morgan Plus 4 (although I weep at the loss) for a Jeep Cherokee. Those kinds of questions are why federalism is good and centralization is bad.

Then there is the ability to fudge.  People are inventive and Americans perhaps more than most.  I thought the recent post Dick Howe said it all.  The Good People of Gloucester had been forging stickers for trash bags.  The City Fathers had to switch to selling bags and even then had the printer deliberately misspell "Official," to catch counterfeiters.  This VMT sounds rife for such activities.

Finally, one of my concerns, how does this system protect those in the lower income brackets, who must depend upon their automobiles to get to work and to shop.  They may face longer distances than those of us who could afford to remember the meme "Location, Location, Location."

Here is the bad news, if VMT worries you:
A blue-ribbon national transportation commission is expected to release a report next week recommending a VMT.
Do you think Secretary LaHood has been given a sneak preview?

Regards  --  Cliff

PS:  In the end, the power to tax is the power to shape behavior.  We need to be careful about how our State and Federal Legislatures are trying to shape our behavior.  Not just because they might do something we don't like, but because they may do something without considering all the consequences.

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