Should cars be taxed by the mile?

[joeglow]

Streets may cream his jeans over this :

"Obama administration floats draft plan to tax cars by the mile"

http://thehill.com/blogs/floor-action/h ... y-the-mile

[mrdwhsr]

Make it weight and mileage and I'm for it. Seems reasonable in light of the fact that every time you go out and buy a more fuel efficient car the gas tax has to be raised to bring in the same revenue. This would apply road-use tax to electrics, natural-gas, hybrids, hydrogen fuel-cell, you name it.

I'd like to see the Unicameral go this direction instead of taking sales-tax revenues away from schools to fund highway construction.

The Mrs. asked how long I thought the Camry might last. I figure a 1996 with 160,000 miles plus an additional 6,000 miles per year - at least another decade. OK so weight and mileage works well for me, but seems fair -- I put less wear and tear on the highway than the SUV's and semi's.

[joeglow]

My problem is with the implementation.  The government has an issue with passing laws that contain financial burdens on the citizenry.  Who will pay for the cost of this technology?  Who will pay to install it?  How about older, existing cars?  Clearly this idea is in its infancy, but it seems like we may end up paying a few hundred dollars per car just to pay an existing tax in a different manner.

[omaja]

Among other things, CBO suggested that a vehicle miles traveled (VMT) tax could be tracked by installing electronic equipment on each car to determine how many miles were driven; payment could take place electronically at filling stations.

Why not just tack on a vehicle tax that is based on the price and weight of the vehicle in addition to a road tax based on weight and type of vehicle?  The Dutch have something like that in addition to a higher sales tax on new vehicles.  Would certainly be an improvement.

This type of proposition could be interesting in the future, though.  As more and more cars have EZ-Pass or equivalent electronic tolling devices, it seems like it could be easy to take that one step further to log the number of miles driven.  Granted, a whole slew of questions would arise about privacy and the like.

[Brad]

Whats Wrong With the Gas Tax?  To me it seems the most fair.

1.  Essentially you pay by the mile
2.  Essentially you pay by the weight of your car (heavier vehicle, lower mileage)
3.  Essentially you pay more of inefficient vehicles

As far as businesses, The IRS deduction for mileage is $0.50 a mile so unless you are driving a vehicle that gets less than 8 miles a gallon you are getting that tax money back anyways.

[Big E]

My problem is with the implementation.  The government has an issue with passing laws that contain financial burdens on the citizenry.  Who will pay for the cost of this technology?  Who will pay to install it?  How about older, existing cars?  Clearly this idea is in its infancy, but it seems like we may end up paying a few hundred dollars per car just to pay an existing tax in a different manner.

I'd rather see vehicle inspections (safety, emissions, etc) come back as a part of it.  Just check the odo when you're in.

[omaja]

Relying on the gas tax won't last forever.  Considering the federal gas tax has not increased since 1993, it is pretty flawed as it is.  And if the amount of miles that a more fuel-efficient vehicle puts on the system is greater than the strain caused by a bulkier SUV (who pay more comparatively based on inferior gas mileage), the fuel-efficient vehicle is effectively not putting as much money into the system as it should.

Indexing the gas tax to inflation would help tremendously but I think it's only a start at this point with the backlog of deferred maintenance only increasing with each passing year.

[Brad]

At this point in the game, I am not worried about electric cars.  What are they 0.001% of all the cars?  Encourage people to switch over.  More worried about the environment than people sitting in traffic because the road isn't wide enough.

[Bosco55David]

Meh. The car guys will figure out a way around it just like we did with the emissions.

[riceweb]

Bosco, what kind of ways do they get around the emissions requirements?

[Bosco55David]

Bosco, what kind of ways do they get around the emissions requirements?

Well the easiest way is to remove the pieces and just put them back on when it's time for emissions testing, that way you can pass the visual inspections. Some of the more committed people have made dummy cats (catalytic converters) and smog pumps in favor of constantly swapping parts. Some of them have arrangements with or find emissions testing sites that simply don't care whether you can pass visual as long as you can pass the sniffer test.

There is more, but those are the main methods. Of course I live in a state with no emissions testing so I didn't even worry about it when I pulled off all my emissions systems.

[StreetsOfOmaha]

In answer to the thread's title question, yes. It's the only fair and efficient way of getting those who most tax the roads to more accurately pay their share to fix the roads.

I would even go further and say that the tax rate on the mileage should vary based on income, so that it's a progressive tax rather than a regressive tax, and the surplus should go to sustainable transportation projects.

Who will pay for the cost of this technology?  Who will pay to install it?  How about older, existing cars?  Clearly this idea is in its infancy, but it seems like we may end up paying a few hundred dollars per car just to pay an existing tax in a different manner.

Uh... yep. If you don't want to pay the fee, how about you don't get to |expletive| drive anymore? Also, there should definitely be a voucher for people who can show that they are in financial hardship or a low-income household and absolutely need their car to get to their job (which is almost everybody... which is pathetic).

Bosco, just curious, why would you take all that stuff off your car?

[Brad]

Besides all the other points I made above, I just thought of another idea.

Does anyone realize how hard it would be to enforce a National tax on miles driven?  What are they going to do, put another line on your tax forum?  I don' think the local counties are all going to be set up to handle it.  Any more the local counties are trying to do everything online and get you to stay away from their office.  So do you get it inspected every year?  Do they take your word on it?  It just think its a logistic nightmare, but what else is new from in DC.

Like I said above, gas tax is the easiest and most fair way.

[OmahaBen]

My problem is with the implementation.

Hire someone who's sole job is to read the mileage on cars when their registration gets renewed. If you want to renew by mail, license auto shops or someone to read the mileage for $5 or something and signa  form to be sent in with the registration.

In most states this isn't an issue, since you need your car inspected annually anyway.

[OmahaBen]

In answer to the thread's title question, yes. It's the only fair and efficient way of getting those who most tax the roads to more accurately pay their share to fix the roads.

I would even go further and say that the tax rate on the mileage should vary based on income, so that it's a progressive tax rather than a regressive tax, and the surplus should go to sustainable transportation projects.

Then just increase the income tax.

I'm all for progressive taxation, but comeon. Either it's a user fee, or a progressive tax. Mixing the two is asking for all sorts of trouble. And asking for a user fee to go to things other than what is being used is never going to fly.

[Big E]

Do you get extra points for showing up a minute early to the d!ck measuring contest?

[Bosco55David]

Do you get extra points for showing up a minute early to the d!ck measuring contest?

Depends on the judge.

[mrdwhsr]

Besides all the other points I made above, I just thought of another idea.

Does anyone realize how hard it would be to enforce a National tax on miles driven?  What are they going to do, put another line on your tax forum?  I don' think the local counties are all going to be set up to handle it.  Any more the local counties are trying to do everything online and get you to stay away from their office.  So do you get it inspected every year?  Do they take your word on it?  It just think its a logistic nightmare, but what else is new from in DC.

Like I said above, gas tax is the easiest and most fair way.

I think you are correct about doing this at the Federal level. I think it could work at the state level. Not sure it takes new technology, just an odometer reading - compute and pay the tax when you renew the plates or with the State Income tax. In Nebraska anyway. No income tax states like South Dakota would have to use another option. Odometer readings are already required when a vehicle is sold. There would need to be a mandatory odometer reading when a car is scrapped. Catch someone cheating on the odometer -- a fine and possible jail time. Maybe not perfect, but I'm sure that nobody has ever cheated the road-use fund and filled the pick-up from the tank with the tractor fuel (off-road, no road-use tax).


I think a lot of people would have trouble coming up with $500.00 - 1000.00 once a year vs. $10.00 to $20.00 a week when they gas up the vehicles. (Numbers not exact - this is just an example).

[nebugeater]

So using this method if a streatcar system is built it will be built and operated based on those that use it correct?

[joeglow]

So using this method if a streatcar system is built it will be built and operated based on those that use it correct?

Should be, buuuuuuuuuuut......NO.

[omaja]

So using this method if a streatcar system is built it will be built and operated based on those that use it correct?

That would only be fair.  :lol:

[Big E]

No problems with that as long as all roads are break-even when built, and only the people that drive on them pay a proportionate amount towards their ongoing maintenance based on their individual use (ie, tolls).

Sounds like a good financing plan for public schools, as well...

[omaja]

Exactly--the point is that infrastructure is subsidized and will never be "break-even" or "make a profit" all on its own.  It's a false expectation so I'm not sure why it is constantly brought up in road funding/road-versus-public-transportation discussions.

"I don't use it therefore I shouldn't pay" is a bogus argument when it comes to infrastructure (and education, among other things, for that matter).

[StreetsOfOmaha]

You're right, except when it comes to highway funding. Highways, though often publicly funded, are not a public good -- that is, to use those facilities requires a hefty investment on the part of the user.

Public transportation, on the other hand, IS a public good, that could and should be subsidized to ensure low- or no-cost access by all. As mentioned, public transportation will never break even, just like a public park or a public water fountain will never break even.

Also, in terms of subsidizing, it is right that our policies should subsidize public goods that produce positive externalities and benefit all citizens. Similarly, it is right to levy appropriate user-fees and taxes on something such as highways and interstates that are exclusionary in nature and cause negative externalities -- a burden which tends to be borne by all citizens.

[omaja]

Allowing exceptions only weakens the rule.  Infrastructure is a public good.

[StreetsOfOmaha]

Abso-|expletive|-lutely not. You cannot argue that West Dodge Road is a public good. Just saying "infrastructure" is dangerously vague and general.

[omaja]

In what way is Dodge not a public good?  We are talking about a "public good" in the economic sense, right?

[StreetsOfOmaha]

It's not a public good in virtually every way if you understand what a public good is -- yes, in the economic sense.

[omaja]

Not even a chance.  To be fair, nothing is perfectly a public good.  But Dodge isn't tolled (no exclusionary policy except congestion to an extent), it is funded with public money, the general population benefits from its existence, its construction and maintenance are baked into costs associated with development, and so on.  If you want to exclude roads you might as well take airports and railroads along with them.

[StreetsOfOmaha]

Exactly what I thought you'd say/do. West Dodge Expressway isn't just a road -- it is a limited access highway usable only by those who can afford and choose to make the decision to sink an insanely large portion of their income into owning a car. It is an excludable and rival good. That is, I am excluded if I don't buy into the sytem, and once bought into, your use of the road can absolutely impede my use of the road (congestion, etc.).

More on this later. The lady and I are going to go grab some lunch.

[omaja]

Again, there is nothing that is perfectly non-rival and non-excludable.  Not to mention what you describe is true to varying degrees of any type of infrastructure.

[Big E]

West Dodge Expressway isn't just a road -- it is a limited access highway usable only by those who can afford and choose to make the decision to sink an insanely large portion of their income into owning a car.

In addition, it was funded largely by ±$100 million in taxes from millions of individuals who will never be within 500 miles of it, let alone use it.

Which, of course, is a perfectly acceptable funding method as long as it isn't a streetcar system.

[Bosco55David]

It is an excludable and rival good.

I suggest you pick up an economics book because you couldn't be further off the mark with this. Here, let me help you.

http://www.nd.edu/~cwilber/econ504/504book/outln6a.html

Chapter 6 Outline
I. PUBLIC GOODS
   A. Definitions and General Comments
1. A public good is a good that is nonexcludable and nonrivalous.

   a. A nonexcludable good is a good for which it is impossible or extremely cosfly to exclude nonpayers from consumption.

   b. A nonrivalous good is a good for which availability is unaffected by an individual's consumption.
2. Government can provide a public good more effectively than the private market.

   a. It is costly to exclude people from the benefit of a public good.

[StreetsOfOmaha]

West Dodge Expressway isn't just a road -- it is a limited access highway usable only by those who can afford and choose to make the decision to sink an insanely large portion of their income into owning a car.

In addition, it was funded largely by ±$100 million in taxes from millions of individuals who will never be within 500 miles of it, let alone use it.

Which, of course, is a perfectly acceptable funding method as long as it isn't a streetcar system.

Like. Like. Like.

Bosco, all you did was re-post the definition of a public good.

omaja, I agree with everything you just said; it still doesn't make the West Dodge Expressway a public good.

[Bosco55David]

West Dodge Expressway isn't just a road -- it is a limited access highway usable only by those who can afford and choose to make the decision to sink an insanely large portion of their income into owning a car.

In addition, it was funded largely by ±$100 million in taxes from millions of individuals who will never be within 500 miles of it, let alone use it.

Which, of course, is a perfectly acceptable funding method as long as it isn't a streetcar system.

Like. Like. Like.

Bosco, all you did was re-post the definition of a public good.

omaja, I agree with everything you just said; it still doesn't make the West Dodge Expressway a public good.

The problem is you don't understand what nonexcludable means.

[omaja]

West Dodge Expressway isn't just a road -- it is a limited access highway usable only by those who can afford and choose to make the decision to sink an insanely large portion of their income into owning a car.

In addition, it was funded largely by ±$100 million in taxes from millions of individuals who will never be within 500 miles of it, let alone use it.

Which, of course, is a perfectly acceptable funding method as long as it isn't a streetcar system.

No different from the thousands of miles of federally-funded Interstate and U.S. highways in each and every state.  Comes with the territory of being a federation.  I reject that argument for roads just like I do for rail.

omaja, I agree with everything you just said; it still doesn't make the West Dodge Expressway a public good.

At least we are agreed that the term is a relative one.  In that sense, it makes Dodge more of a public good than you would like to admit.  You greatly exaggerate the exclusionary and rival nature of Dodge, as if all of the costs of owning a car were concentrated on that one section of road.  That is clearly not the case.  There are no greater barriers to use Dodge than any other road, which would be the criterion to use.

[Uffda]

Exactly what I thought you'd say/do. West Dodge Expressway isn't just a road -- it is a limited access highway usable only by those who can afford and choose to make the decision to sink an insanely large portion of their income into owning a car. It is an excludable and rival good.  (congestion, etc.).
.

You two can go around and around I did find this with a quick search

An interstate highway without tolls is rival in consumption (if I use the highway, I create a negative externality for you—congestion; that is, I reduce your benefit from the highway) but nonexcludable (drivers can use the highway without pay- ing for access). So the highway is a common resource. Because of nonexcludabili- ty, a free-rider problem exists, and the privately provided quantity of highways would be inefficiently low.


http://people.cpcc.edu/~srx7823e/Krugma ... s_CH18.pdf


1. Commuters on highways around big cities frequently experience rush-hour traffic jams because:
1. highways are a common resource. This means they are generally non-excludable since we own
them in common, but often rival in use.
2. highways are a public good. This means they are generally non-excludable since we own them in
common, but often rival in use.
3. highways are a common resource. This means they are generally non-excludable and non-rival in
use.
4. cities don’t have the resources available to build the economically efficient level of highways. 5. none of the above explains these traffic jams around large cities at rush-hour.

http://web.missouri.edu/~ryans/practice ... opic17.pdf

[StreetsOfOmaha]

Thanks for digging up those sources.

They do an excellent job of explaining how a highway is not a public good. As it says, highways are not non-rival.

But what's funny is, it then claims that highways are nonexcludable, then goes on to say this:

drivers can use the highway without paying for access

Is being a driver the American precondition to citizenship, then?

[Uffda]

Exactly what I thought you'd say/do.

[omaja]

If we're applying a strict definition of rivalry to exclude roads from being categorized as a public good, the same applies to transit which is also rivalrous.  It makes no difference to me what you call either of them, but the reality is they are both necessary infrastructure.

Related to the topic of funding infrastructure, I stumbled upon this article in The Economist earlier that I thought was pretty interesting.  I didn't realize just how pathetic our investment in infrastructure is on a percentage basis: only 2.4% of GDP whereas Europe is double that.  Doesn't really matter how we go about it (perhaps ending a few treasury-draining wars would help), but we definitely need to be making up the difference somehow.