With gas taxes bringing in less and less revenue, states like Massachusetts and Washington are considering a pay per mile tax. This idea of charging drivers a taxed based on how much they drive is even being bandied about Congress. Basically a pay per mile tax, or Vehicle Mile Tax, would charge American drivers per mile driven instead of charging the current 18.4 cent-per-gallon Federal gasoline tax they pay now.
Rep. Earl Blumenauer (D-Ore.) proposed a bill into the Oregon State House in December 2012 that would, if passed, implement a pilot program to test the feasibility of a tax on miles traveled. The U.S. Congress is looking into similar options as a supplemental source of revenue for the Highway Trust Fund.
The pay per mile tax is under consideration because the current federal gasoline tax of 18.4 cent-per-gallon is not generating enough revenue – partly due to fuel efficient vehicles including hybrids and electric vehicles (EVs) and the fact that the gasoline tax was never indexed for inflation. The Federal gas tax has not been raised in 20 years, causing Congress to borrow money elsewhere to fund infrastructure expansion and maintenance.
For some the fact that gasoline usage is down might sound progressive because it is evidence we as a nation are indeed being more fuel conscientious, using new high mileage or alternative fuel vehicles, and even using more public transportation. However, a penny saved is not a penny earned to the Feds. The gas tax revenue went towards maintain Americas’ highway system. Currently the federal government is facing a gas tax revenue of $34 billion a year which is far less than the estimated $78 billion needed to keep the national highway system in working order.
So why not just raise the gas tax higher than 18 cents per gallon? The answer is because the government would still be missing out on the lost revenue from the growing number of citizens who drive EVs, hybrids, and other alternatives. The gas tax would also have to more than double to cover infrastructure costs. Good luck getting that through Congress
The Government Accountability Office (GAO) says that in order to generate the needed revenue American drivers would have to pay 2.2 cents per mile on average – a 153% increase over what they pay now in gas tax. The GAO predicts that commercial trucks would be hit with a 120% increase, raising the price of shipping which would no doubt be passed on to customers.
There are a bunch of concerns with this tax idea, but perhaps one of the most interesting in the invasion of privacy. The process of how the government would get your mileage is a logistical and civil liberties nightmare. Ideas have been bounced around from installing GPS systems in cars to track mileage to having transmitters in cars sending out some kind of odometer count at a gas station so the pay per mile tax could be applied when a person fills their tank.
It is anyone’s guess if such a tax will happen or if a pay per mile tax idea would even work to generate the needed revenue. What is known however is that money is needed and badly — so badly that all ideas, no matter how invasive or outlandish, are clearly on the table.
Andrew Meggison was born in the state of Maine and educated in Massachusetts. Andrew earned a Bachelor’s Degree in Government and International Relations from Clark University and a Master’s Degree in Political Science from Northeastern University. Being an Eagle Scout, Andrew has a passion for all things environmental. In his free time Andrew enjoys writing, exploring the great outdoors, a good film, and a creative cocktail. You can follow Andrew on Twitter @AndrewMeggison