Mileage Taxes vs. Fuel Taxes

As vehicles improve in fuel efficiency, as people drive less, and as politicians don’t have the will to increase fuel taxes, funds to maintain and improve transportation infrastructures are decreasing, and governments are looking for new ways to raise revenue.

An article in the Los Angeles Times looks at various ideas that are being proposed in the United States to tackle road funding. The central alternative to the current fuel tax system is to charge drivers based on the number of miles they travel, rather than the amount fuel they consume — and there is now technology in place that can easily allow that to happen. Black boxes that can be installed in vehicles are able to track milage and transmit that information to government bodies who can then assess a tax based on the number of miles driven.

Congress has not been able to come to any agreement on such a system so far for federal funding, but there are states and local government that have been able to take steps in the direction of a mileage tax. From the LA Times article:

Several states and cities are nonetheless moving ahead on their own. The most eager is Oregon, which is enlisting 5,000 drivers in the country’s biggest experiment. Those drivers will soon pay the mileage fees instead of gas taxes to the state. Nevada has already completed a pilot. New York City is looking into one. Illinois is trying it on a limited basis with trucks. And the I-95 Coalition, which includes 17 state transportation departments along the Eastern Seaboard (including Maryland, Pennsylvania, Virginia and Florida), is studying how they could go about implementing the change.

Organizations such as the American Civil Liberties Union are concerned that a mileage tax could lead to Big Brother-type surveillance with government agencies able to know where people go, and how fast they drive. Also, people who live in rural areas are concerned that they would be unfairly disadvantaged when they have to drive long distances than urban residents by necessity. Drivers of fuel efficient vehicles might also feel aggrieved if their investment in fuel economy turned out to be more expensive than they had budgeted for if they have to pay additional taxes.

If we contemplate a future when LENR could provide more of the power we need for everyday use — including for transportation (e.g. electricty for electric vehicles) we will likely see an increasing push for a new way of funding highway systems. I suppose there could be taxes levied for alternative energy production (including LENR), or maybe a higher rates of sales or income taxes. But any time new taxes are proposed there are going to be contentious debates — and in today’s political climate in the US it is hard to see a consensus being formed.

I think this is a debate that will only grow more in intensity as technological advances reduce the need for gasoline and diesel in our vehicles — but with some of the intense opposition to the idea of mileage tax it’s hard to predict how it will be resolved.

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