Moving to a VMT Tax

[SEWIGuy]

Instead of tracking mileage by state and having your odometer read every year, have the tax due on all miles driven when the car registration is changed.  Drivers would be encouraged to make monthly or quarterly estimated payments and every annual registration notice would have an updated balance including how many miles that would equate to.

[mgk920]

Instead of tracking mileage by state and having your odometer read every year, have the tax due on all miles driven when the car registration is changed.  Drivers would be encouraged to make monthly or quarterly estimated payments and every annual registration notice would have an updated balance including how many miles that would equate to.

So basically have a required government filing confirming wherever you drove side by side with your required income tax filings.  Will we ever have the time or ability to actually ENJOY life?  Why not just have a charge based on how much energy is used, paid whenever and wherever you recharge or refuel the car?

Mike

[SEWIGuy]

Instead of tracking mileage by state and having your odometer read every year, have the tax due on all miles driven when the car registration is changed.  Drivers would be encouraged to make monthly or quarterly estimated payments and every annual registration notice would have an updated balance including how many miles that would equate to.

So basically have a required government filing confirming wherever you drove side by side with your required income tax filings.  Will we ever have the time or ability to actually ENJOY life?  Why not just have a charge based on how much energy is used, paid whenever and wherever you recharge or refuel the car?

Mike

I pay quarterly income tax filings. It takes me a grand total of about two minutes each time. 

If you really want to give me the time and ability to enjoy life, get my wife on board with selling the house and moving to a condo so I don't have to mow the lawn each week.

[mgk920]

Instead of tracking mileage by state and having your odometer read every year, have the tax due on all miles driven when the car registration is changed.  Drivers would be encouraged to make monthly or quarterly estimated payments and every annual registration notice would have an updated balance including how many miles that would equate to.

So basically have a required government filing confirming wherever you drove side by side with your required income tax filings.  Will we ever have the time or ability to actually ENJOY life?  Why not just have a charge based on how much energy is used, paid whenever and wherever you recharge or refuel the car?

Mike

I pay quarterly income tax filings. It takes me a grand total of about two minutes each time. 

If you really want to give me the time and ability to enjoy life, get my wife on board with selling the house and moving to a condo so I don't have to mow the lawn each week.

Do you figure ALL of the time expended in record keeping and so forth?  It takes me several days of messing around just to get the annual forms FILED, along with the keeping the other records straight through the year.  I could SOOOO EASILY do without any of that.

Mike

[kphoger]

Her 2015 Acura TLX is subject to the Virginia "Highway Use Fee," which is something recently enacted that tacks on an additional fee for vehicles that meet or exceed a certain level of fuel efficiency (you can read the specifics on the Virginia DMV's website if you're interested).

Hate it.  Good for you, buying a fuel-efficient vehicle!  Now you owe us money.

Instead of tracking mileage by state and having your odometer read every year, have the tax due on all miles driven when the car registration is changed.  Drivers would be encouraged to make monthly or quarterly estimated payments and every annual registration notice would have an updated balance including how many miles that would equate to.

That would be good incentive to just drive your vehicle into the ground, then sell it to a junk yard.  No change of registration required, no tax due.

[SEWIGuy]

Instead of tracking mileage by state and having your odometer read every year, have the tax due on all miles driven when the car registration is changed.  Drivers would be encouraged to make monthly or quarterly estimated payments and every annual registration notice would have an updated balance including how many miles that would equate to.

So basically have a required government filing confirming wherever you drove side by side with your required income tax filings.  Will we ever have the time or ability to actually ENJOY life?  Why not just have a charge based on how much energy is used, paid whenever and wherever you recharge or refuel the car?

Mike

I pay quarterly income tax filings. It takes me a grand total of about two minutes each time. 

If you really want to give me the time and ability to enjoy life, get my wife on board with selling the house and moving to a condo so I don't have to mow the lawn each week.

Do you figure ALL of the time expended in record keeping and so forth?  It takes me several days of messing around just to get the annual forms FILED, along with the keeping the other records straight through the year.  I could SOOOO EASILY do without any of that.

It doesn't take me long to figure out. I already roughly know what the September payment will be. I file online.

Last year I owed $16 after filing my 1040 so I have a system down that's pretty accurate and pretty simple.

[1995hoo]

Her 2015 Acura TLX is subject to the Virginia "Highway Use Fee," which is something recently enacted that tacks on an additional fee for vehicles that meet or exceed a certain level of fuel efficiency (you can read the specifics on the Virginia DMV's website if you're interested).

Hate it.  Good for you, buying a fuel-efficient vehicle!  Now you owe us money.

....

I don't object to the principle of trying to even out the amount paid for causing wear and tear on the road. We already pay gas tax, so to some extent, the way it's always been is, "Good for you, buying a car! Now you owe us more money." (And, of course, we pay personal property tax on cars as well, although that money is not dedicated to highway funding.) As I've said before, I don't like the idea of GPS tracking. When I went to renew Ms1995hoo's registration and found that her fee was only $12 (her TLX is the only car we have that's subject to it, as far as I know, although my 2004 TL is not due for registration renewal this year), it made me care a lot less about it than I might otherwise have.

If you read the specifics on the Virginia fee, they have a convoluted process of estimating the average distance driven per year by Virginia residents (I don't know how they determine that, but the current number is 11,600 miles) and then figuring the fee based on that. Here's the statute if you want to read it. I haven't tried to work through the process to understand the exact mechanism. Of course there's the additional problem that the process assumes that the 11,600 miles would be driven in a single vehicle, such that a person who owns two cars is presumed to drive each of them the full 11,600 miles, but their response to that objection would be, "We've offered you a way to resolve that problem by tracking your mileage."

[SEWIGuy]

Is the way they figure out the average mileage per year knowing when the car was first registered and the odometer reading at the time, and then the same when the car is registered to someone else, and just averaging it all?  It wouldn't take many examples to come up with a pretty accurate figure.

[1995hoo]

Is the way they figure out the average mileage per year knowing when the car was first registered and the odometer reading at the time, and then the same when the car is registered to someone else, and just averaging it all?  It wouldn't take many examples to come up with a pretty accurate figure.

I have no idea. I don't think they've said how they determine it. The number can vary from year to year, of course.

[kalvado]

Is the way they figure out the average mileage per year knowing when the car was first registered and the odometer reading at the time, and then the same when the car is registered to someone else, and just averaging it all?  It wouldn't take many examples to come up with a pretty accurate figure.

I have no idea. I don't think they've said how they determine it. The number can vary from year to year, of course.

I believe average us car is driven 13k a year. It is certainly not universal, but seems to be on a right page for me. 430 gallons @30 mpg
So 11600 isn't off the chart

[mgk920]

Is the way they figure out the average mileage per year knowing when the car was first registered and the odometer reading at the time, and then the same when the car is registered to someone else, and just averaging it all?  It wouldn't take many examples to come up with a pretty accurate figure.

And then remitting the correct amount to each state that you drove in.  Got it!   

Mike

[vdeane]

I don't like the idea of having to file a mileage tax like we have to file income tax.  Heck, I don't even like how we have to file income tax.  Should be like other countries where the (equivalent of the) IRS simply mails you a return, you check it, and either certify that you agree with it or dispute it.  Taxes should be simple, easy, and as invisible as possible (one of the great things about the gas tax).  This would also require a lot of bureaucracy to manage - either a second IRS, or a massively expanded IRS taking on the task.

Filing does have a side effect which isn't talked about much but which I suspect is not unintentional.  That is, it will plainly put a cost on driving, spell it out very clearly, and place it in everyone's faces.  And for those who believe that higher VMT is in and of itself a bad thing, regardless of how clean cars get or how well congestion is managed, and as such want to discourage driving, that is very much a desirable outcome.  They just don't want to say the quiet part out loud or else the idea will become more politically toxic than raising the gas tax is.

[kalvado]

I don't like the idea of having to file a mileage tax like we have to file income tax.  Heck, I don't even like how we have to file income tax.  Should be like other countries where the (equivalent of the) IRS simply mails you a return, you check it, and either certify that you agree with it or dispute it.  Taxes should be simple, easy, and as invisible as possible (one of the great things about the gas tax).  This would also require a lot of bureaucracy to manage - either a second IRS, or a massively expanded IRS taking on the task.

Filing does have a side effect which isn't talked about much but which I suspect is not unintentional.  That is, it will plainly put a cost on driving, spell it out very clearly, and place it in everyone's faces.  And for those who believe that higher VMT is in and of itself a bad thing, regardless of how clean cars get or how well congestion is managed, and as such want to discourage driving, that is very much a desirable outcome.  They just don't want to say the quiet part out loud or else the idea will become more politically toxic than raising the gas tax is.

Do you think gas price discourage driving?
In NY we are paying 2 cents a mile in gas tax. $260 a year approximately. With an oil change going towards $100, it's more of "oh, life is expensive, but what can I do?" scale

[1995hoo]

vdeane, one thing you're overlooking as to income tax is that not everyone has income tax withheld (and reported to the IRS) and gets a W-2 at the end of the year, even some very well-compensated people. Self-employed people, who pays quarterly estimated taxes, are one example. Then there are people whose withholding isn't enough for various reasons. It's not so simple as just having the IRS do the work and send it to you.

[vdeane]

vdeane, one thing you're overlooking as to income tax is that not everyone has income tax withheld (and reported to the IRS) and gets a W-2 at the end of the year, even some very well-compensated people. Self-employed people, who pays quarterly estimated taxes, are one example. Then there are people whose withholding isn't enough for various reasons. It's not so simple as just having the IRS do the work and send it to you.

Well, it works for other countries, so they obviously solved those problems.  I presume those who owe at the end simply send a check (or however people handle such expenses in Europe) with their acceptance.  As for self-employed people, I would say that being self-employed necessarily entails a greater amount of paperwork/bureaucracy, especially in the US where we don't have a national healthcare system and therefore getting insurance is a consideration.

I don't like the idea of having to file a mileage tax like we have to file income tax.  Heck, I don't even like how we have to file income tax.  Should be like other countries where the (equivalent of the) IRS simply mails you a return, you check it, and either certify that you agree with it or dispute it.  Taxes should be simple, easy, and as invisible as possible (one of the great things about the gas tax).  This would also require a lot of bureaucracy to manage - either a second IRS, or a massively expanded IRS taking on the task.

Filing does have a side effect which isn't talked about much but which I suspect is not unintentional.  That is, it will plainly put a cost on driving, spell it out very clearly, and place it in everyone's faces.  And for those who believe that higher VMT is in and of itself a bad thing, regardless of how clean cars get or how well congestion is managed, and as such want to discourage driving, that is very much a desirable outcome.  They just don't want to say the quiet part out loud or else the idea will become more politically toxic than raising the gas tax is.

Do you think gas price discourage driving?
In NY we are paying 2 cents a mile in gas tax. $260 a year approximately. With an oil change going towards $100, it's more of "oh, life is expensive, but what can I do?" scale

Buying gas is simply a part of life.  We go to the station, pay, and refuel.  A VMT tax would very directly and explicitly spell out how the amount paid correlates to mileage, and shove it in people's faces.  Paying gas is something I hardly even think about.  A VMT tax would force me to think about such things and actively notice how many miles I drive in a certain period of time.

[Scott5114]

Instead of tracking mileage by state and having your odometer read every year, have the tax due on all miles driven when the car registration is changed.  Drivers would be encouraged to make monthly or quarterly estimated payments and every annual registration notice would have an updated balance including how many miles that would equate to.

So basically have a required government filing confirming wherever you drove side by side with your required income tax filings.  Will we ever have the time or ability to actually ENJOY life?  Why not just have a charge based on how much energy is used, paid whenever and wherever you recharge or refuel the car?

Mike

I pay quarterly income tax filings. It takes me a grand total of about two minutes each time. 

I do too, and I agree it's not much of a time sink. However, I sort of dislike the additional mental overhead of having to budget for quarterly payments, as well as the uncertainty of knowing whether your estimates are correct or not. I definitely wouldn't want to have to go through that with the car and my income.

This also presumes accurately estimating mileage is even possible. If you're someone that commutes to the same place every day, you'll probably be fine. If your vehicle usage is more irregular, like having a job like a plumber where you must travel to wherever the customer is, or if you have reason to take long unplanned trips (like having to do welfare checks on a relative in poor health in another state) it would become borderline impossible.

[J N Winkler]

I track mileage using GPS on my phone since my car has a nonfunctional odometer.  It's not especially convenient even for me, and I have enough scripting knowledge to deploy a Python script that uses the haversine formula to measure the length of GPX track segments and then have other code calculate mileages per tank and cumulative mileage.  Plus, as I have learned to my cost, any phone with an elderly or defective battery won't log GPS tracks reliably, full stop.

[kalvado]

Instead of tracking mileage by state and having your odometer read every year, have the tax due on all miles driven when the car registration is changed.  Drivers would be encouraged to make monthly or quarterly estimated payments and every annual registration notice would have an updated balance including how many miles that would equate to.

So basically have a required government filing confirming wherever you drove side by side with your required income tax filings.  Will we ever have the time or ability to actually ENJOY life?  Why not just have a charge based on how much energy is used, paid whenever and wherever you recharge or refuel the car?

Mike

I pay quarterly income tax filings. It takes me a grand total of about two minutes each time. 

I do too, and I agree it's not much of a time sink. However, I sort of dislike the additional mental overhead of having to budget for quarterly payments, as well as the uncertainty of knowing whether your estimates are correct or not. I definitely wouldn't want to have to go through that with the car and my income.

This also presumes accurately estimating mileage is even possible. If you're someone that commutes to the same place every day, you'll probably be fine. If your vehicle usage is more irregular, like having a job like a plumber where you must travel to wherever the customer is, or if you have reason to take long unplanned trips (like having to do welfare checks on a relative in poor health in another state) it would become borderline impossible.

I assume quarterly estimates are estimates because you don't have to wrap accounting too often, and possible month to month business variation.
Mileage should be more like utilities billing, where actual consumption can be checked at any time on the meter, and the rate is flat.

[GaryV]

A VMT tax would very directly and explicitly spell out how the amount paid correlates to mileage, and shove it in people's faces.  Paying gas is something I hardly even think about.  A VMT tax would force me to think about such things and actively notice how many miles I drive in a certain period of time.

Why would VMT cause you to notice more how far you drove, as opposed to the gas gage going down as you drive?

Still, I think the better option would be to somehow add a tax to the electric charging station. This can be done relatively easily at a public charging station - no different taxing per kilowatt-hour than taxing per gallon at a gas station. The home chargers could raise separate issues. But as I understand it many utility companies have separate ways of metering vehicle charging, just like they do for your home a/c. Taxes could be added via that metering.

[kalvado]

A VMT tax would very directly and explicitly spell out how the amount paid correlates to mileage, and shove it in people's faces.  Paying gas is something I hardly even think about.  A VMT tax would force me to think about such things and actively notice how many miles I drive in a certain period of time.

Why would VMT cause you to notice more how far you drove, as opposed to the gas gage going down as you drive?

Still, I think the better option would be to somehow add a tax to the electric charging station. This can be done relatively easily at a public charging station - no different taxing per kilowatt-hour than taxing per gallon at a gas station. The home chargers could raise separate issues. But as I understand it many utility companies have separate ways of metering vehicle charging, just like they do for your home a/c. Taxes could be added via that metering.

You also should think tax evasion. It's almost impossible to avoid per-gallon tax. Public charging is simple as well.
Per-mile odometer based fee makes odometer tampering attractive. Not that it's an unusual thing already - just to increase resale value of a car.
Messing with home wiring is even easier. You can do whatever with charging stations, but 120v 15a is still a fallback option as far as I understand.
Something on a car side may be more reliable, but that calls for messing with firmware.
And provoking unsafe behavior isn't a good strategy. Tweaking odometer is at least pretty safe, wiring and firmware less so.

[1995hoo]

I assume quarterly estimates are estimates because you don't have to wrap accounting too often, and possible month to month business variation.
Mileage should be more like utilities billing, where actual consumption can be checked at any time on the meter, and the rate is flat.

With income tax, if your quarterly estimates are too low, the IRS hits you with a penalty for underpayment of estimated taxes. The trickiest aspect is if your income isn't even throughout the year–say, you get a bigger payment in one quarter, or you get a big year-end bonus, or similar. The Internal Revenue Code is based on the assumption that your income is a pretty steady stream all year round. If it's not, there are ways to deal with that, but they're a nuisance.

[SEWIGuy]

Is the way they figure out the average mileage per year knowing when the car was first registered and the odometer reading at the time, and then the same when the car is registered to someone else, and just averaging it all?  It wouldn't take many examples to come up with a pretty accurate figure.

And then remitting the correct amount to each state that you drove in.  Got it!   

Mike

No I would only have each state collect its share for the cars registered there.  My feeling is that it all works out in the end.

[hotdogPi]

If it wasn't political suicide, I would support increasing the gas tax 75¢, some state and some federal. This is a tripling of revenue, encourages more fuel-efficient vehicles rather than discouraging them, and only increases per-mile cost from 59¢ to 62¢ (that number includes maintenance and the cost of the car itself through depreciation as well as existing gas prices).

[kalvado]

Is the way they figure out the average mileage per year knowing when the car was first registered and the odometer reading at the time, and then the same when the car is registered to someone else, and just averaging it all?  It wouldn't take many examples to come up with a pretty accurate figure.

And then remitting the correct amount to each state that you drove in.  Got it!   

Mike

No I would only have each state collect its share for the cars registered there.  My feeling is that it all works out in the end.

It works for trucks, amount of paperwork may be excessive though

[MikeTheActuary]

I volunteered for the MBUF study.   I agreed to plug in a device with a GPS monitor into my ODB2 port, and we'll see how it works....

I'm not really a fan of the potential big-brother aspect of such monitoring, but I am a believer that relying on petrol/diesel-based taxes as a road-funding source is increasingly problematic as EVs start to reach critical mass.