Proposed “Mileage Tax” Infuriates Drivers
President Obama has said he won’t adopt a plan to tax drivers based on how many miles they drive instead of how much gasoline they buy, but governors in several states support the idea.
That’s because state tax revenue collected from gasoline taxes is sputtering. Financially strapped Americans are driving less due to the economic downturn. Gasoline taxes pay for the federal government’s upkeep of highway and bridge construction. More fuel-efficient vehicles, particularly electric cars, are also on the horizon, and state lawmakers fear they will reduce demand for gasoline even further.
A miles-driven tax is gaining traction in Colorado, Florida, Idaho, Massachusetts, Minnesota, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island and Texas amid growing recognition that new ways of funding the nation’s aging road infrastructure need to be found, according to MSNBC. Last year, Congress made $8 billion of emergency funds available to close the gap between gas tax revenues and the amount of federally designated funds allocated for state projects. The gap between revenue generated by the gas tax and the cost of highway maintenance is expected to grow.
Under a mileage tax system, all new vehicles would be required to have an installed Global Positioning System (GPS) mileage counter; drivers could be taxed in the range of a quarter-cent to 1.2 cents for every mile driven. Drivers would pay the mileage tax at the gas pumps, eliminating an advantage some motorists who live near state lines now enjoy when driving across state lines to purchase gas that’s cheaper due to lower state gas taxes.
Angry drivers who say the idea is wrong on many levels cite privacy invasion issues raised by the use of GPS to monitor drivers, plus the belief that a mileage tax would discourage drivers from buying fuel-efficient vehicles, since they’d still pay the same as drivers of gas-guzzlers. Others say such a tax would unfairly burden those living in rural areas where nearly every errand requires a lengthy drive.
Currently, the federal gas tax is 18.4 cents per gallon, while state gas taxes range from a low of eight cents per gallon in Alaska (a tax that’s been suspended through August 31, 2009), to a high of 41 cents per gallon in New York, according to The Tax Foundation.
Do you think a mileage tax has any redeeming value?
