Ray LaHood Is Talking Transportation Taxes

Right now, our driving is taxed with extra cost attached to the price of gasoline. You need gas to drive, so you pay the government some for it, and they get money in exchange for you driving. But new Transportation Secretary LaHood sees another way: a vehicle mileage taxA VMT plan would essentially tax you for the number of miles you drove instead of the number of gallons of gas you used. Even though that seems like the same basic thing, there are two reasons why advocates say a VMT is an important innovation. The first upside of this tax is that we wouldn't be driving our hybrids on roads filled with potholes. Ideally, we'll be driving more and more hybrid cars, or even electric cars. If our main transportation funding comes from a gas tax, that funding will start to dry up.The second reason is that the gas tax is a flat fee imposed per gallon, not a percentage of your total gas bill. Therefore, it's not subject to inflation or changes in gas prices (for more on gas taxes, see our GOOD Sheet on the subject). As gas prices rise, the purchasing power of the government to make infrastructure improvements doesn't increase. Gas taxes are also notoriously hard to raise (see what just happened in California). No politician wants to be the one saying people should be paying for more gas-you may recall the "gas tax holiday" debacle from the 2008 campaign, where Obama boldly refused to join Clinton and McCain in pandering by advocating for removing the gas tax entirely during the summer's gas price increases. In a world where gas prices rise and we drive more and more hybrids, the government's transportation revenue could be drastically reduced.

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Another, even more innovative solution, would be a what's called a weight-mile tax, which would both make up for lost gas tax revenue from hybrids and have the added benefit of encouraging more hybrid drivers. The principle behind it is simple: heavier vehicles do more damage to roads , and should therefore bear more of the burden of paying for their upkeep. The U.S. trucking industry already pays such a tax with little problem, extending it to cars and SUVs would give drivers an additional tax incentive to trade in that Explorer for a Prius: each mile would cost less.The main problem with either of these plans is monitoring. It requires a GPS chip in a car to see how many miles you drive. For many people, including myself, this starts to get a little Orwellian. Even if the information is merely miles driven, not where those miles were, it becomes a concerning piece of information for the government to have. Would we start seeing VMT records subpoenaed in murder trials or divorce cases? Almost certainly. That said, a few months of innovative thinkers and scientists putting their brains together must be able to find a way to put the privacy concerns to rest. I certainly hope they can, because Pigovian taxes like a weight-mile tax are absolutely necessary to solving our current transportation woes.Map via.Image via.