Will this idea end the gas tax?

Gas tax or mileage tax? Sound off in the comment section!

Gas tax or mileage tax? Sound off in the comment section!

Wouldn’t it be cool if the gas tax were history?

Of course, removing one tax usually means the addition of a new one, and the state of Oregon has an innovative proposal that would end the gas tax and replace it with a tax on miles driven.

This is an idea that has even been considered at a federal level, so don’t automatically write this off as crazy West Coast politics. Here’s the issue: As cars become more fuel efficient (or eliminate the need for gas altogether), how will states cope with declining tax revenue and generate the money needed to pay for roads?

Oregon’s plan calls for an onboard GPS-based mileage counter that keeps track of miles driven. From there, a tax on every mile would be charged and either collected at refueling stations or along with annual licensing fees.

On the positive side, gas would cost less. However, drivers would either be socked with a massive tax bill every year, or end up paying roughly the same amount as now at the pump. (The GPS devices would communicate mileage information to the pump and calculate the tax, adding it onto the cost of the fuel.)

Here’s something else to consider: Prius drivers would end up paying the same amount of taxes as Hummer drivers. Where’s the tax reward for buying a more fuel efficient car?

Believe it or not, I think it makes more sense to increase the gas tax. That way states can make up any lost revenue and drivers are encouraged to limit their driving or buy a car that delivers better fuel economy. Also imagine the logistical nightmare of tracking the mileage of every car on the road, not to mention the cost of outfitting them all with a GPS system.

Nobody really likes the gas tax, but it works. A mileage tax is a bad idea, because it just replaces an unpopular tax with one that’ll cost too much to get started and then not work as well. Under the gas tax, if you drive more you pay more. A mileage tax would achieve that same result while costing untold millions of dollars to implement.

That just doesn’t make sense.

How would you feel about having the government keep track of every mile you drive?

-tgriffith

3 Comments

  1. Here in New Zealand diesel vehicles pay fuel tax on a mileage basis not at the pump. Trucks are taxed at a higher rate depending on gross laden weight to compensate for greater road damage. All cars trucks here have to undergo a safety inspection every 6 months and if the mileage tax isnt current the vehicle isnt permitted on the road. If stopped by highway patrol diesel cars etc get milage checked and huge penalties imposed for unpaid tax. My car is diesel powered but even including the 4cent per km tax is cheaper to run than its petrol equivalent as it averages 46mpg so its been done.

  2. I tried to see how a mileage tax would make sense, but any reason I came up with made more sense through a gas tax. I think tgriffith is right, we may not like it but it works. And, the government doesn’t have to track our miles which is good!

  3. I agree, the smartest way to do this is increase the gas tax. You can directly correlate gas consumption to vehicle weight and miles driven. Heavier vehicles cause more highway wear and tear as as does gross vehicle miles travelled. The gas tax should also be administered by the feds but with at least 85% of the revenues going directly to the local states. The current system is a boondoggle that allows the feds to shovel pork by diverting highway funds from states like Michigan, New York, Illinois and others that don’t get back what they put in and have roads and bridges in bad shape. I’d like to see a much higher gas tax along with a mandate that eliminates state and local taxes like sales tax. The Feds 15% cut would be to have some funds to give to very low population states for needed projects (not that bridge to nowhere, please) and to fund federal agencies that regulate interstate transportation and safety. And because the tax would be charged for each gallon of fuel, it would not grow as fuel prices rise as with percentage-based sales taxes. Reduced consumption through the shift to lighter, more fuel efficient vehicles and less driving directly results in less wear and tear on our highways. When that doesn’t happen (as in Michigan) you can find the culprit is heavy trucks who aren’t paying for the damage they do to the roads.

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