The Dutch Try a Kilometer Tax
The Dutch have done something innovative. They're replacing the sales and ownership taxes on cars with a tax based on the amount people...
The Dutch have done something innovative. They're replacing the sales and ownership taxes on cars with a tax based on the amount people drive."Each vehicle will be equipped with a GPS device that tracks how many kilometres are driven and when and where. This data will be then be sent to a collection agency that will send out the bill," the transport ministry said in a statement....Dutch motorists driving a standard family saloon will be charged 3 euro cents per kilometre (seven US cents per mile) in 2012. That would increase to 6.7 cents (16 US cents per mile) in 2018, according to the proposed law.Here's some quick math to translate. As recently as 2005, the average American had a commute of 33 miles. That's about 53 kilometers. That would translate to a daily tax of 1.53 Euros, or $2.28. That adds up quickly. If this kind of tax were instituted in America, the average commuter would be paying an extra $11 each week. That's more than $500 each year.This kind of plan has been proposed here, too. It's been talked about in Oregon and considered by Secretary LaHood. The nice thing about a mileage (or kilometer) tax is that it internalizes the some of the external costs of driving thereby encouraging people to drive less. It also links the money we use for infrastructure upkeep with the actual use of our roads and highways.But a mileage tax, unlike a gas tax, doesn't encourage people to drive cleaner cars. It adds a cost to driving based on the distance, not the carbon. A Tesla and a Hummer are taxed the same. The smarter plan-especially given the cost and privacy concerns associated with all of those GPS devices-might be to raise the gas tax or design a new one that's a little more innovative than the current flat gas tax.Whether that's politically possible, of course, is another question. At any rate, it will be interesting to see how this plan goes over in the Netherlands.