Your Thoughts: A Tax on How Many Miles You Drive

[usc90grad]

Oregon first considered this in 2005, but now more and more states, including North Carolina, are talking about it. What do you think?

Oregon to test mileage tax as replacement for gas tax

By Eric Pryne
Seattle Times

CORVALLIS, Ore. — Let's pretend someone waves a magic wand and turns every car into a fuel-sipping, gas-electric hybrid. What difference would it make?

The air would be cleaner. Oil imports would drop.

And the transportation budgets of Oregon, Washington and almost every other state would deflate like a punctured balloon. Think about it: Most money for highway construction and maintenance comes from state and federal taxes on gasoline. If people bought a lot less gas, highways would get a lot less money.

In Oregon, a state task force has concluded this scenario isn't all that far-fetched. It has proposed a possible long-term replacement for the gas tax, something no one has tried before: A tax based on how many miles you drive.

Oregon State University researchers have developed technology that can distinguish miles driven in Oregon from those driven elsewhere, then allow a mileage tax to be calculated and paid at the pump in place of the state gas tax.

A mileage tax has been discussed in Washington, too — not as a replacement for the gas tax, but as a supplement to it.

Continued....

http://economics.about.com/gi/dynamic/offsite.htm?zi=1/XJ&sdn=economics&cdn=money&tm=16&gps=208_313_869_569&f=00&su=p649.0.147.ip_&tt=2&bt=0&bts=0&zu=http%3A//seattletimes.nwsource.com/html/localnews/2001972174_mileagetax05m.html

[TheMule]

Oregon first considered this in 2005, but now more and more states, including North Carolina, are talking about it. What do you think?

A mileage tax has been discussed in Washington, too — not as a replacement for the gas tax, but as a supplement to it.

That's what it will eventually turn into everywhere. Vote against it.

[cock13]

it sounds like it would be too easy to cheat

[Spur]

This type of tax has its pros/cons

Taxing the miles you drive, or the gas you burn?

I've been thinking about a proposal being floated in California (see this article in the LA Times), ever since I saw a reference to it by Kevin Drum . Joan Borucki, appointed by Arnold Schwarzenegger to be the director of Californians Department of Motor Vehicles, has proposed ending that state's tax on gasoline, and replacing it with a tax on the number of miles driven per year.

Ignoring for the moment the issues surrounding the technology needed to do this, and the privacy concerns, and any questions one might raise about taxing California drivers for miles they drive out of state, what does this look like as a tax?

Let's start with the traditional purpose of gasoline taxes. In most states, and at the federal level, they have been dedicated taxes, directed to funds reserved for building and maintaining roads. That is, they function as user taxes. In this sense, shifting to a (revenue-neutral) mileage tax would seem to accomplish the same objective, if those funds were similarly dedicated. An argument is that the mileage tax functions better as a user tax than does a gasoline tax, because (to some extent) it's the amount you drive, not necessarily the gasoline you burn, that defines the benefits you get from the highway system. On the other hand, less fuel efficient cars are heavier and cause greater wear. For equal mileage driven, larger, heavier cars pay more in tax. Which functions better as a user tax, then, is not immediately clear.

But that's not the only issue to deal with. For one thing, gasoline taxes have other consequences. And shifting to a mileage tax also has other consequences.

First, gasoline taxes raise the price of gasoline relative to other energy sources. So they provide an incentive, even if only a minor one, for the development of automotive fuels other than gasoline. And because these alternative fuels are likely to generate less pollution, a gasoline tax can also be thought of as a tax on the pollution caused by burning gasoline. Indeed, the gas-tax-as-pollution-tax strand may lead to an argument that the gas tax should be increased (and offset by reductions in other taxes in a revenue-neutral way).

Shifting to a mileage tax, of course, shifts away from the pollution-tax aspects of the gas tax. It even, perversely, works in the opposite direction. Unmodified, the mileage tax shifts taxes from people who drive fuel-inefficient vehicles to those who drive fuel-efficient vehicles. Consider two people each driving 15,000 miles a year. If one drives a car that gets 40 miles per gallon, that driver uses 375 gallons of gas per year; if the gas tax is $0.60 per gallon, s/he pays $225 a year in gas taxes. If the second driver gets 15 mpg, that's 1,000 gallons of gas, or $600 per year. Now shift to a mileage tax that's revenue neutral--$825 for 30,000 miles, or $0.0275 per mile. Both drivers now pay $412.50 per year. Note that the effect is to "punish" the driver with the fuel-efficient car, and to (at the margin) discourage fuel conservation, which (at the margin) will lead to increased use of gasoline and increased air pollution.

Second, we know that lower-income people are, other things equal, likely to buy more fuel-efficient vehicles than are higher-income-people. So the mileage tax is also a shift in the tax burden from higher to lower income taxpayers.

The LA Times article suggests that these effects can be adjusted for by varying the per-mile tax based on the fuel efficiency of cars. This (and here I'm not ignoring administrative complexity) would significantly increase the administrative complexity of the system. Any system with multiple tax rates is harder to administer than a system with one tax rate.

[To continue with the administrative problems. California had about 35.5 million people--about 20 million households, about 2.75 million businesses, and about 30 million motor vehicle registrations, and a half a million motorcycles, in 2002, and collected about $3.3 billion in motor fuel taxes. There were about 24,000 gas stations. (All data from the Statistical Abstract of the United States.) I don't know about you, but collecting taxes from 24,000 sources seems easier than collecting taxes from the roughly 20 million to 22 million taxpaying units--households plus businesses with motor vehicles--that'd pay a mileage tax.]

Take all this together, and then think about the shift to a mileage tax. The environmental consequences would be bad. The distributional consequences would be bad (well, in my opinion, anyway). The administrative complexity of collecting the tax would be greater. And in favor? That maybe--maybe--a mileage tax would work better as a user tax.

Link (http://signsofchaos.blogspot.com/2004/12/taxing-miles-you-drive-or-gas-you-burn.html)

[woodscock]

Kind'a like the state of North Carolina "Talking" about requiring home owner with a well to install a meter to report water usage. I have a 360' deep well and believe me, I watch every drop I pump. I never water the lawn but do water my dogs. Yea, North Carolina! Looking for more ways to screw the citizens out of any money they can.

[Mecklenburg Cock]

Kind'a like the state of North Carolina "Talking" about requiring home owner with a well to install a meter to report water usage. I have a 360' deep well and believe me, I watch every drop I pump. I never water the lawn but do water my dogs. Yea, North Carolina! Looking for more ways to screw the citizens out of any money they can.

Some more fine work by the bubble up in Raleigh.

I'm not really crazy about this proposed tax.

At this point, I like the transportation sales tax that Mecklenburg County just passed. It raised the current sales tax .25 to help pay for transportation needs within the county. The upside, it doesn't matter where you live (be it SC or NC since we're close to the boarder), if you spend money in Meck County you contribute. I'm in favor of this as I am in favor of toll roads. You don't pay for it unless you use it. And if you don't like it, don't use it, or spend you $$ elsewhere.

[usc90grad]

Kind'a like the state of North Carolina "Talking" about requiring home owner with a well to install a meter to report water usage. I have a 360' deep well and believe me, I watch every drop I pump. I never water the lawn but do water my dogs. Yea, North Carolina! Looking for more ways to screw the citizens out of any money they can.

Off topic I know, but my parents live in Charlotte and are on a well. Several years ago, the city began charging a water runoff tax. He didn't pay it since he's on a well. They said too bad, you still owe it and if you don't pay it, we'll put a lien on your house. Yet another reason I will never live in the city limits of Charlotte.

[Mecklenburg Cock]

Off topic I know, but my parents live in Charlotte and are on a well. Several years ago, the city began charging a water runoff tax. He didn't pay it since he's on a well. They said too bad, you still owe it and if you don't pay it, we'll put a lien on your house. Yet another reason I will never live in the city limits of Charlotte.

Yet another reason why I'm thinking about moving across the boarder into SC. Of course, Charlotte has to do all they can since they don't get any help from Raleigh.

[SwampFox]

We started a revolution over being taxed at rates far lower than what we are getting taxed at today, as well as having taxes levied against us without representation.

Maybe it's time we did it again.

[woodscock]

Off topic I know, but my parents live in Charlotte and are on a well. Several years ago, the city began charging a water runoff tax. He didn't pay it since he's on a well. They said too bad, you still owe it and if you don't pay it, we'll put a lien on your house. Yet another reason I will never live in the city limits of Charlotte.

I live in Edgecombe county. Way east of Charlotte and Raleigh. County installed a county water system. I have a well that pumps clean sweet water. County ran a water system and I paid a $200.00 tap fee 7 years ago. Last spring, the presure line broke on my well. I had the well company come out and they suggested I tap onto the county water system because of the cost to reline the well. So, I call the county piblic works and inquire about the tap on. I had the receipt from the original install. Lady said that I owed $970.00 for water. What? I am not on the water system. No matter, you have got to pay the min amount every month. So, I don't use their nasty water and still have to pay for it. Also, if I don't pay before the due date, there is a 50% -yes I said 50%- late charge for the water bill. If I refuse to pay, they attach a lean against my property. Screw this money hungry state.

[The Dude]

Off topic I know, but my parents live in Charlotte and are on a well. Several years ago, the city began charging a water runoff tax. He didn't pay it since he's on a well. They said too bad, you still owe it and if you don't pay it, we'll put a lien on your house. Yet another reason I will never live in the city limits of Charlotte.

actually, it doesnt matter that they're not on city water...because the rain water that falls onto their property, and also the impervious area of said-property (i.e. roof, driveway, or anything else that causes the water not to permeate into the water table)
When the runoff goes into the stormwater drains, the city needs to recover money so they can maintain those drains.

Without proper maintenance, you get an example like...oh, I dont know...5 pts in Columbia (flooding constantly)

[kre25]

Have they considered that people drive Trucks for a living?

Wouldn't be a fair system IMHO!

[The Dude]

Oh, and you know how I'm so sure about Charlotte-Mecklenburg's water billing practices?

They're one of our client's!
:woo:

[hardcock2]

I don't like it...especially considering my job is 5 hours away from home right now.:-x

Besides...it will end up being an addition to, not replacement of gas taxes. Our government is so damn greedy. If they would quit trying to pocket every damn dime...then we wouldn't need 3/4 of the taxes we have now.

Also....let them try this....and see how much tourism drops across the country. F'n idiots!

[Slacker USC]

I don't like the idea. I'd rather stick with a current tax on gas, because it's a closer appoximation. The little old lady in her geo metro causes less wear and damage on the roads than me in my 4x4. It's just a fact of life that heavier vehicles do more damage to the infrastructure than smaller/lighter vehicles.

Why should someone driving a small hybrid pay the same amount of tax (per mile) as someone driving a Suburban? The current system is much closer to being "fair"; as you can pay less in taxes by conserving more. If you just charge a flat fee per mile, there's less incentive to get better fuel economy.

[Spur]

Agree on just about everyones posts

I would rather keep what I have now then this

Doesn't seem to be any MORE fair (as if any taxes are "fair") than the current system

[usc90grad]

Have they considered that people drive Trucks for a living?

Wouldn't be a fair system IMHO!

I'm pretty sure they would be exempt or somehow taxed on a sliding scale. The truck lobby is big.

[cack]

i think you should be taxed for every post in the pad your post count thread

[hardcock2]

i think you should be taxed for every post in the pad your post count thread

good thing I only posted one.:woo:

[woodscock]

i think you should be taxed for every post in the pad your post count thread

And that's why I would never use the "PAD YOUR POST" thread. INow hoggie might have to caugh up the greens for posting on that thread but not me..

[Spur's Addiction]

Isn't this just the same as a gas tax? The more miles you drive, the more gas you buy. I don't see a difference. Except a mileage tax does not provide incentive to get a more fuel efficient vehicle, where a gas tax does.

[Mecklenburg Cock]

Isn't this just the same as a gas tax? The more miles you drive, the more gas you buy. I don't see a difference. Except a mileage tax does not provide incentive to get a more fuel efficient vehicle, where a gas tax does.

Yea, it seems to be the same idea to me. In my opinion the mileage tax is similar to the flat rate income tax proposal.

[Spur]

Yea, it seems to be the same idea to me. In my opinion the mileage tax is similar to the flat rate income tax proposal.

Oh the Flat Tax.....a Tax that is not actually Flat yet calls itself the Flat Tax

:-?