Choose Your Poison: Gas Tax or Mileage Tax

Golden Gate Bridge traffic

Unless we want the streets of the United States to look like the streets of Michigan, we’ve got to figure out a way to pay for proper infrastructure repair and replacement.

The most logical ways to fund streets are through vehicle registration taxes and gas taxes. The problem, of course, is that both are about as high as they can politically get in most areas while streets and highways continue to crumble. As hard as it is to admit, I believe gas taxes should increase, because it’s the most fair way to evenly distribute how much tax individuals pay. Higher gas prices also will spur drivers to save more fuel and drive less.

But cities in the Bay Area have a different idea.

The Metropolitan Transportation Commission and Association of Bay Area Governments are currently considering a plan to tax drivers by the number of miles driven rather than by the number of gallons burned. To make that possible, registered vehicles would be fitted with a GPS device to track the number of miles traveled by each.

Tax rates could be less than a penny per mile to as much as 10 cents. One estimate puts potential revenue from the system at $15 million per day.

The thing is, a gas tax also charges people per mile driven, just in a less intrusive way. The per-mile tax, though, is an effort to get drivers of electric vehicles to pay their fair share, too. But there are so few EVs out there right now that it doesn’t really matter.

Plus, who wants local governments tracking their every move on GPS? They might say they have no interest in where drivers are going, but the detailed driving habits of millions of people would be a tough temptation to avoid when the advertisers come knocking and are willing to pay big bucks for the info.

Nobody wants to get behind the idea, or even publicly admit it, but we need higher fuel taxes. Whether the taxes are on gasoline, diesel, hydrogen, natural gas or electricity, we should tax whatever powers our cars enough to pay for the streets they drive on. It’s really that simple.

Which would you rather: higher gas taxes or a GPS unit in your car to track and tax the number of miles you drive?


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  1. Typical of most services provided by gov’t – executing trying to track mileage would end up costing more vs. benefit. Another suggestion could be to leave the gas tax where they are for Fed and state levels and let states add an infrustructure fee with tag registration based on weight of vehicle. With over 240 million registered vehicles(2010)a $100 minimum per 1000/lb would provide states resources to take care of the roads. The heavier the vehicle- the more it cost. As a contractor with a full size van- the extra $3-400/yr wouldn’t put a smile on my face, but hopefully better roads would be less wear and tear on it. The hard part would be holding states accountable to use the money just for roads/bridges. Really – when was the last time our gov’t or state shared just how much revenue they collected from the gas tax? If anyone knows please share

  2. Ugh. Both options are tough… I assume the gps unit would be to track only in-area driving, so road trips to Oklahoma won’t count as taxable mileage. That makes sense, but I can imagine the uproar if governments started installing tracking devices in cars. A gas tax makes more sense. Even better is Oliver’s idea- remove oil subsidies!

  3. It’s a tough call. I lived in England for a few years in the 1970’s and despite their extremely high gas taxes, I can’t say their roads were very good. It was simply a way to raise money for England’s nanny state. I fear the same thing will happen here, with much of the money siphoned off for the politicians to spend.
    In general, the real issue in Michigan (since you mention us specifically) is the heavy trucks that do most of the damage to the roads and bridges but don’t pay anywhere near enough to cover the damage. Another problem in Michigan is brain-dead department of transportation and local highway commisssions that love to pay for unneeded big-buck boulevards (with the infamous Michigan left turn) and some of the craziest roundabouts ever built, while cheaping out with inferior materials and constructions techniques. A typical new concrete road built here starts breaking up in 2-3 years and becomes a washboard of patching materials within ten years. I can’t say I care one way or another between a gas or milege tax because I don’t drive that much, and my car averages 57 mpg.

  4. Doesnt really matter. It will be a trivial amount of money and is politically a dead end. Years back they had a ballot petition to raise the gas tax in Georgia 1 cent/gallon to help fund schools and it got voted down. Georgia already has extremely low taxes on gas. It just isnt a popular tax. Better to just remove oil subsidies (which is popular) and use that for roads. Same effect, but the oil companies don’t get the profits.

  5. I do not know why we need to throw technology (the gps, with all the attendant concerns on privacy, etc.) into something that has been solved a long time ago. Measuring how much a vehicle has been used is done by looking at the odometer.
    If we have to change the taxes, why not charge per mile based on the odometer, perhaps with a multiplier based on the vehicle weight? This can be done easily each year as part of renewing your tag.

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