Taxed for driving

[ET21]

Coming from the shit stain called Illinois, lawmakers here want to replace the gas tax with a new mileage tax. Essentially you'd be taxed for every mile you drive with a device in your car. This is a result of the gas tax fluctuating due to lower prices and more gas friendly cars gaining popularity.

Just out of curiosity, has any other state proposed or enacted such a law?

[jeffandnicole]

https://www.aaroads.com/forum/index.php?topic=17322.msg2121885#msg2121885

https://www.aaroads.com/forum/index.php?topic=15448.msg2062025#msg2062025

BTW, you're already taxed for driving.

[Rothman]

All for it.  Let the odometer tampering begin!

[Sykotyk]

First, they have to be able to prove you're inside the state to be taxed by the state. A GPS unit could be argued as unconstitutional. Because we know once every car has one, authorities are going to want access to the GPS markers that prove where you were and when.

Secondly, gas taxes don't 'wildly' fluctuate. The gas prices do. And the taxes aren't a percentage of the pump price. hey're a fixed rate. If MPG goes up or down, FOR ALL VEHICLES IN THE STATE significantly, or the cost of maintaining the roads goes up or down significantly, then that means the price charged per gallon isn't enough.

This isn't the 80s, prices have risen thanks to inflation and car MPG has risen thanks to both the market (people want to spend less on gas to go where they want) and the government (make lighter, safer cars that are more efficient and less pollution).

But, the 'raising taxes' boogyman is an easy trope to get what the government really wants: GPS tracking.

[Revive 755]

Secondly, gas taxes don't 'wildly' fluctuate. The gas prices do. And the taxes aren't a percentage of the pump price. hey're a fixed rate.

Not entirely true for Illinois, where there is a 6.25% sales tax on gas on top of the fixed rate.

[kalvado]

Secondly, gas taxes don't 'wildly' fluctuate. The gas prices do. And the taxes aren't a percentage of the pump price. hey're a fixed rate.

Not entirely true for Illinois, where there is a 6.25% sales tax on gas on top of the fixed rate.

I bet that is treated as "regular" sales tax, not "gas" tax, and doesn't go to any road fund (at least directly).
And issue of heavy electric car (curb weight of Tesla is about 2x as heavy as Accord, by the way) not paying gas taxes grows as number of those electric cars increases.

[Bruce]

It's only logical. Even driving an all-electric car is still putting that vehicle on the road, straining existing infrastructure that will need to be maintained and improved. How will a gas tax pay for that in a more fuel-efficient world?

[jwolfer]

Secondly, gas taxes don't 'wildly' fluctuate. The gas prices do. And the taxes aren't a percentage of the pump price. hey're a fixed rate.

Not entirely true for Illinois, where there is a 6.25% sales tax on gas on top of the fixed rate.

I bet that is treated as "regular" sales tax, not "gas" tax, and doesn't go to any road fund (at least directly).
And issue of heavy electric car (curb weight of Tesla is about 2x as heavy as Accord, by the way) not paying gas taxes grows as number of those electric cars increases.

Charge more to register cars , perhaps surcharge for electric cars.

Florida charges more for heavier cars. In the past when Florida used County codes. W after the county code meat it was over a certain weight. W/W where it was little letters stacked like Maryland tags was an even heavier car.. Like a 1970 Chrysler 300..

My friend had one that stalled in a left turn lane... It sucked big time to push off the road

[Max Rockatansky]

California was pushing something like that just a year back or so, I lost track of the legislation.  I just don't how a system like taxing miles is practical over more traditional income and sales taxes?  The problem with these kind of tax laws usually is that there is huge political agenda in the name of environmentalism behind them.  Basically these laws are often designed to stop people from driving when that's often just not an option for most people or attempt to influence the type of car they buy. 

[Tarkus]

The problem with these kind of tax laws usually is that there is huge political agenda in the name of environmentalism behind them.  Basically these laws are often designed to stop people from driving when that's often just not an option for most people or attempt to influence the type of car they buy.

Actually, one of the arguments against mileage taxes has been the environmental angle.  Mileage taxes have been proposed because fuel-efficient vehicles pay less gas tax, and some DOTs see them as "freeloaders" as a result.

ODOT was pretty much the first on this nonsense bandwagon.  I don't know how they have it set with the current OReGO pilot, but one of their original ones set it such that the mileage tax was equivalent to what the gas tax would be for a 20mpg vehicle, which basically means that a mileage tax would effectively encourage people to buy large SUVs.  Someone driving an 8mpg Hummer would effectively get a tax break under this scheme, whereas someone in a 40mpg vehicle would see their taxes double.

Some of the Oregon mileage tax proponents response to the complaints that it discouraged people from buying fuel-efficient vehicles was "we'll just charge them a lower rate", which completely defeats the supposed reasons of switching from gas to mileage.  It's silly on so many levels--typical for ODOT.

I'm personally in favor of gradually shifting the funding burden for road funding over to general funds.  Roads are vital infrastructure that everyone directly or indirectly uses, and going to general funds would provide considerably more stability than a fluctuating stream of funding like gas or mileage taxes.

[kalvado]

The problem with these kind of tax laws usually is that there is huge political agenda in the name of environmentalism behind them.  Basically these laws are often designed to stop people from driving when that's often just not an option for most people or attempt to influence the type of car they buy.

Actually, one of the arguments against mileage taxes has been the environmental angle.  Mileage taxes have been proposed because fuel-efficient vehicles pay less gas tax, and some DOTs see them as "freeloaders" as a result.

As always, most meaningless argument is the one most used in tax discussions. (putting my whining hat on) Right now those driving old gas grizzles are taxed most - those, who can least afford that! And 1% driving Prius or Tesla are enjoying a free fide! (hat off)
We're talking about 5-6 cents a mile at most (NY has highest gas tax in lower 48 - 62 cents a gallon right now, or ~3 cents per mile at 20 MPG). IRS personal car use reimbursement rate is 60 cent a mile or so.
Weight adjusted mileage tax  seem fair enough, although collecting that consistently seems mission impossible.

[NWI_Irish96]

As always, most meaningless argument is the one most used in tax discussions. (putting my whining hat on) Right now those driving old gas grizzles are taxed most - those, who can least afford that! And 1% driving Prius or Tesla are enjoying a free fide! (hat off)
We're talking about 5-6 cents a mile at most (NY has highest gas tax in lower 48 - 62 cents a gallon right now, or ~3 cents per mile at 20 MPG). IRS personal car use reimbursement rate is 60 cent a mile or so.
Weight adjusted mileage tax  seem fair enough, although collecting that consistently seems mission impossible.

If you want to make the tax as progressive as possible, lower the gas tax and jack up the excise tax on vehicle registration.  The more your car is worth, the more is costs to register it.

[Max Rockatansky]

The problem with these kind of tax laws usually is that there is huge political agenda in the name of environmentalism behind them.  Basically these laws are often designed to stop people from driving when that's often just not an option for most people or attempt to influence the type of car they buy.

Actually, one of the arguments against mileage taxes has been the environmental angle.  Mileage taxes have been proposed because fuel-efficient vehicles pay less gas tax, and some DOTs see them as "freeloaders" as a result.

ODOT was pretty much the first on this nonsense bandwagon.  I don't know how they have it set with the current OReGO pilot, but one of their original ones set it such that the mileage tax was equivalent to what the gas tax would be for a 20mpg vehicle, which basically means that a mileage tax would effectively encourage people to buy large SUVs.  Someone driving an 8mpg Hummer would effectively get a tax break under this scheme, whereas someone in a 40mpg vehicle would see their taxes double.

Some of the Oregon mileage tax proponents response to the complaints that it discouraged people from buying fuel-efficient vehicles was "we'll just charge them a lower rate", which completely defeats the supposed reasons of switching from gas to mileage.  It's silly on so many levels--typical for ODOT.

I'm personally in favor of gradually shifting the funding burden for road funding over to general funds.  Roads are vital infrastructure that everyone directly or indirectly uses, and going to general funds would provide considerably more stability than a fluctuating stream of funding like gas or mileage taxes.

I would be interested to see how the pilot rate is set up.  It sounds like they didn't really think out their legislative proposals very well on it.  20 MPG is a way on the low side for projected EPA ratings on vehicles that are being produced today.  If you are going to try to influence people to buy something it should be a newer vehicle since that would help probably a lot more with fuel economy with all the increases in CAFE that are supposed to be coming in the next decade. 

As always, most meaningless argument is the one most used in tax discussions. (putting my whining hat on) Right now those driving old gas grizzles are taxed most - those, who can least afford that! And 1% driving Prius or Tesla are enjoying a free fide! (hat off)
We're talking about 5-6 cents a mile at most (NY has highest gas tax in lower 48 - 62 cents a gallon right now, or ~3 cents per mile at 20 MPG). IRS personal car use reimbursement rate is 60 cent a mile or so.
Weight adjusted mileage tax  seem fair enough, although collecting that consistently seems mission impossible.

If you want to make the tax as progressive as possible, lower the gas tax and jack up the excise tax on vehicle registration.  The more your car is worth, the more is costs to register it.

That's how Arizona does things.  The gas tax is very low, especially compared to California right next door.  My registration fees were completely based off the accessed value of my vehicle meaning that was paying about $200 and $450 for my two cars the last couple years I was there.

[kkt]

The problem with these kind of tax laws usually is that there is huge political agenda in the name of environmentalism behind them.  Basically these laws are often designed to stop people from driving when that's often just not an option for most people or attempt to influence the type of car they buy.

Actually, one of the arguments against mileage taxes has been the environmental angle.  Mileage taxes have been proposed because fuel-efficient vehicles pay less gas tax, and some DOTs see them as "freeloaders" as a result.

As always, most meaningless argument is the one most used in tax discussions. (putting my whining hat on) Right now those driving old gas grizzles are taxed most - those, who can least afford that! And 1% driving Prius or Tesla are enjoying a free fide! (hat off)
We're talking about 5-6 cents a mile at most (NY has highest gas tax in lower 48 - 62 cents a gallon right now, or ~3 cents per mile at 20 MPG). IRS personal car use reimbursement rate is 60 cent a mile or so.
Weight adjusted mileage tax  seem fair enough, although collecting that consistently seems mission impossible.

The vehicle tax should be set up to reward people who drive efficient vehicles.  If you want to give the poor a break, lower their general income tax.

[jeffandnicole]

The vehicle tax should be set up to reward people who drive efficient vehicles.

That's how the tax is set up today.  And that's why our nation's roads are in such poor shape.

[vdeane]

We don't have a ton of hybrids/electric cars on the road yet, so as of right now, difficulty in funding transportation is a result of lawmakers refusal to raise the gas tax as needed over the years to keep parity.  I don't think we should reward legislative stonewalling with the GPS tracking that the national security state craves.

I still think that an electricity tax assessed on electric vehicles at supercharger stations is the way to go.  We could even put a meter on it to tax charging at home and design technology to prevent people from charging while bypassing the meter (perhaps requiring a licensed mechanic to get at the battery at all save for perhaps specially designed terminals that would go through the meter to allow the car to be jump started if needed).  I expect that hybrids are a dead end tech that won't stick around once all-electric cars are sufficiently improved and reduced in price.

[US 41]

I find it a little odd that some of the same people that heavily oppose tolls on interstates, will strongly support a mileage tax. So basically you want every road to be a toll road. That affects the "lower income" population more than just tolling all of the interstates, so I'm a little confused by that logic.

IMO toll the interstates or raise the gas tax a little. A mileage tax would be extremely unpopular especially for rural residents. I kind of doubt that the mileage tax ever becomes a widespread thing in the US. People in the US seem to be extremely concerned about their privacy (but those same people will post their lives on Facebook, go figure) and I think tracking people's mileage and where they drive would raise a big red flag among most people.

[kkt]

The vehicle tax should be set up to reward people who drive efficient vehicles.

That's how the tax is set up today.  And that's why our nation's roads are in such poor shape.

No, they're in such bad shape because voters would rather have crappy roads and low taxes than good roads and medium taxes.  The Federal gas tax hasn't been raised since 1993, and as a per gallon tax its value declines with inflation.

[Sykotyk]

The problem with upping vehicle registration is that the cost of the vehicle doesn't equate to the cost of the damage it does to the roads it travels on. If I own  $50k car but bike most places and only drive it 300 miles a month, why should I have to pay $1000 a year to register the car while the guy who owns a 1988 Corsica driving 2000 miles a month (how, I wouldn't know) gets to pay $50 excise tax to register his car?

The problem with the gas tax is that, while it's progressive in nature, it has never self-corrected. Someone said upstream that the current setup is why we can't fund our roads. But in actually, it's the lack of adjusting for the changing whims of the automobile market and how we drive said cars that has led to us unable to fund our roads. Yes, heavier vehicles should be some sort of weight tax on registration. Which for the bigger trucks already happens (both state and federal). Fuel taxes at the pump are for the general mileage the vehicle will run.

If the entire country improved MPG by 1mpg, then the gas tax, at both the national and state level, would need to adjust for that one MPG. But, instead we've never corrected it for how long the average vehicle can travel one one tax unit, and we've never adjusted it to both inflation and newer, more stringent design standards of roads.

Part of the cost of repairs is tied to losing money through inflation. But it's also because these roads built years ago aren't 'safe' to use today. We won't build an interstate bridge without a wide shoulder. We are practically deadset against cloverleaf interchanges unless they're on a collector/distributor setup. We add signage, more lighting, rumble strips, reflective tabs in the road, side markers, traffic cameras, traffic monitors, automatic de-icing, safer bridges to withstand Earthquakes and accidents. All those 'improvements' cost money. They have to be factored in. Labor costs are higher. Material costs are higher. Mandatory letting of contracts rather than letting the state have their own work force for anything bigger than a pothole filling or the like.

We've been paying well under the going rate for road repair for years through the fuel tax. Adjusted for inflation, we should be paying well higher than we are. And some of the states have started to realize this. New York, Pennsylvania, etc, have finally just went all in with a huge increase. Even states I never though would go for it, Arkansas and Wyoming, both upped their fuel tax rates.

The federal tax has to change as well. And be pegged to Cost of Living increases, inflation, MPG/CAFE, etc.

[kalvado]

The vehicle tax should be set up to reward people who drive efficient vehicles.  If you want to give the poor a break, lower their general income tax.

I would argue that same unit price for everyone is the most fair approach. You don't get to buy milk cheaper because you add just a little bit in your coffee. Why road usage should be different? Same base price,  more  for XXL cars (even more for trucks). As simple as it gets (colleting that is a completely different story)

I find it a little odd that some of the same people that heavily oppose tolls on interstates, will strongly support a mileage tax. So basically you want every road to be a toll road. That affects the "lower income" population more than just tolling all of the interstates, so I'm a little confused by that logic.

I, for one, oppose toll collection methods, not toll concept.
However, wonderful state of NY happily collects both gas tax and toll (and would gladly collect mileage tax on top of that without reducing first two) - and then sends money elsewhere.  If you have a tax with very long and specific name, be sure money will be used elsewhere.  (recent example: "law enforcement fee" charged with insurance has 75% of collected fund drained through bottomless general fund)

[jakeroot]

The vehicle tax should be set up to reward people who drive efficient vehicles.

That's how the tax is set up today.  And that's why our nation's roads are in such poor shape.

No, they're in such bad shape because voters would rather have crappy roads and low taxes than good roads and medium taxes.  The Federal gas tax hasn't been raised since 1993, and as a per gallon tax its value declines with inflation.

There's kind of a double-whammy with the gas tax right now. The gas tax has to go up in order to, effectively, stay the same, due to inflation (as you said). But now it has to go up even faster because cars are too efficient. As cars become more and more efficient, the gas tax has to go up faster and faster to compensate for the reduced refueling rate. Something that taxes people based on miles driven, instead of the energy source of their vehicle, is far more sustainable. People buy more fuel efficient vehicles when gas prices go up; this has nothing to do with gas taxes. People aren't trading in their Suburbans for Prii because the gas tax goes up 7 cents. They do it because they go the same distance at completely different prices, gas taxes notwithstanding.

FWIW: Before taxes, a 2015 Suburban costs ~$45 to fill up. A 2015 Prius costs ~$15.

[kalvado]

That's how Arizona does things.  The gas tax is very low, especially compared to California right next door.  My registration fees were completely based off the accessed value of my vehicle meaning that was paying about $200 and $450 for my two cars the last couple years I was there.

NY has registration price in based on weight, although amounts are fairly low. I pay something like $10/year extra for CRV compared to civic. Basically nothing compared to about $300/year in taxes on 500 gallon annual fuel burn.

[vdeane]

The greater fuel efficiency of the fleet is largely due to rising fuel economy standards, not people flocking to hybrids/electric.  Hybrids are a TINY percentage of the market and only the rich can afford them anyways.

[Max Rockatansky]

The greater fuel efficiency of the fleet is largely due to rising fuel economy standards, not people flocking to hybrids/electric.  Hybrids are a TINY percentage of the market and only the rich can afford them anyways.

Gradually the return on investment is coming down but it's usually a good 7-8 years that it will take a hybrid to pay you back on your investment in regards to mark up.  The Chevy Volt was the worst offender when it came out because it was still a $33,000 dollar compact car after tax credits, a regular compact well equipped would have cost around $20,000.  Your return on investment is even slower if you drive a lot of high speed roads over 60 MPH or go more than 40 miles, they are designed for maximum efficiency at low speeds. 

I think you hit on this already but the hybrids are more of a stop gap until electrical cars become more cost effective.  Although I can see spreading use of hybrid technology in smaller scale capacities to meet the EPA target for passenger cars to average 43 MPG by 2025.  Basically you couple increased fuel economy with a stagnant gas tax it's no wonder the revenue stream is drying up for infrastructure repairs.  And the irony to gas prices is that if you look at inflation the national average for prices is very low at the moment.  If you look at the roughly $1.50 people paid in 1980 that would be roughly $4.50 in today's money.  While I'm not in favor of taxing per mile there needs to be something done to increase revenue streams for infrastructure.  It can be increased gas taxes, increased sales taxes or even income taxes.  The problem is that almost no politician or legislative member will get behind it because the general populace is generally naive to how taxation and government funding actually works.

[kalvado]

[ think you hit on this already but the hybrids are more of a stop gap until electrical cars become more cost effective.

And the question is if electric cars have to pay for the road use?
With charging options  like personal solar cells, and possible use of batteries to smooth the grid load, per-kilowatt tax doesn't seem reasonable, mileage makes more sense as a metric.
Since those electric cars are heavily computer controlled, it may be possible to make that computer a taxation device.. And let the hacking contest begin along with "which state collects" lawsuits.