A black box in your car? Some see a source of tax revenue

[Stephane Dumas]

I spotted that article from the Los Angeles Times
http://www.latimes.com/nation/la-na-roads-black-boxes-20131027,0,6090226.story

[WashuOtaku]

Completely pointless.  If they really wanted to do that, they could have required all drivers to report their car mileage when they get their car inspected or tags renewed.

The other simple solution is to raise taxes.

[vdeane]

Of course, no mention of the fact that the reason the highway trust fund is broke is because Congress spends the money on other things.

There's no good way to do a mile-based tax.  With GPS, you're tracking everyone in ways Orwell couldn't have even dreamed of.  Without, and you're taxed for out of state miles (which penalizes people from high-tax states like NY).

[corco]

Yeah, I'd be against any sort of tracking mechanism. That said, gas taxes are not going to work for that much longer, so something needs to be done, and intuitively a mileage-based tax seems like the way to go.

I don't see the need to tax by state- I feel like it'd be easiest to just pay all your miles to the state that the vehicle is registered in (though that would incentivize commercial entities to register in particular states, which could be bad), at a rate set by the state. Tracking devices are no good.

The best way to do this is to spread the tax throughout the year, as is done with fuel tax, so folks aren't saddled with a massive tax bill at the end of the year.

Trying to think of options
A) When you return to a "point of origin", which would be a fixed place where your car lives, generally your house, you'd plug your car in and it would report the mileage. The good part about that is that it wouldn't track movement, and the tax could be spread around. The bad part would be that the government would theoretically know when you're home or not.

B) Manual reporting of mileage on tax return. This would work- you'd report your mileage and prepare to be audited if it doesn't make sense, just like with regular income taxes. The good part of this is that it maximizes privacy. The bad part is you'd pay a hefty tax bill at the end of the year. One way to offset could be to report expected mileage on your state W-4, which would be deducted pre-paycheck and reconciled at the end of the year. I think I'd prefer that option, though the cost of auditing could become excessive.

[vdeane]

I have no idea how many miles I put on in a year, so that option's out.  It varies wildly based on how much clinching I do.

[NE2]

(though that would incentivize commercial entities to register in particular states, which could be bad)

Already happens with rentals. Holy crap BLOUNT.

[corco]

I have no idea how many miles I put on in a year, so that option's out.  It varies wildly based on how much clinching I do.

Ideally, I guess, you'd report on the high end and then get a big check back at the end of the year. But that may not work for people with smaller incomes.

The other option is report on the low end, and when you drive you know what the rate per mile is, so keep that saved up for tax time.

(though that would incentivize commercial entities to register in particular states, which could be bad)

Already happens with rentals. Holy crap BLOUNT.

I feel like, and I think under the interstate commerce clause this would be constitutional, mileage taxation for commercial vehicles would have to revert to the proposed tracking transponder and run at the federal level to properly allocate funds to each state. I'm adamantly against that for private vehicles, but it should be kosher for commercial traffic.

[wxfree]

GPS does not have to record everywhere you go.  Discussions in Texas focused on a system that would record location data for 30 seconds or so, long enough to calculate the distance traveled.  The distance is recorded and location data deleted.  It's a separate matter whether people will believe that's how it works.  It's another separate matter whether that's how it would actually work.

Rather than sending millions of annual bills, could we combine the tax collection with existing transactions, like the way the fuel tax is collected?  As I understand it, the actual fuel tax is collected from wholesalers, but collecting mileage taxes from fuel retailers would still be much more efficient than collecting it from millions of people.  Retailers already collect and send in sales taxes; the mileage taxes could be piled in with that and sorted out by the state.

This would require some way to communicate the mileage from the recording device to the fuel station.  It would result in the tax being paid to the state in which it's collected, just like the fuel tax.  If you're near a state line, you can buy fuel and pay taxes in either state.  It isn't strictly equitable, but it's no worse than the system we have now.  This prevents a trucking company from paying all its tax bill to a certain state while running trucks in far away states.

There would need to be some way to collect the tax from people who try to evade it by filling their cars' tanks with fuel cans.  Some kind of annual audit would take care of that, possibly combined with the annual inspection or registration fee or tax payment.

In any mileage tax collection system, I'd be concerned about broken odometers, unplugged sensors eliminating the recording of distance, or somehow blocking the GPS from working.

[corco]

GPS does not have to record everywhere you go.  Discussions in Texas focused on a system that would record location data for 30 seconds or so, long enough to calculate the distance traveled.  The distance is recorded and location data deleted.  It's a separate matter whether people will believe that's how it works.  It's another separate matter whether that's how it would actually work.

[puts on tin-foil hat] I'm actually afraid of that option simply because the technology would be there to track, should that ever take place. If location data is collected, it doesn't have to be deleted, and that's what bothers me. [/take off tin-foil hat]

Rather than sending millions of annual bills, could we combine the tax collection with existing transactions, like the way the fuel tax is collected?

I like the idea as long as our fuel system still looks something like it does today. My concern is that if we move to a more home-based network, where there are a few filling stations for those on long distance roadtrips but mostly people re-energize their cars in their homes, then that becomes a bigger infrastructure burden. My idea was to incorporate it into the existing tax system, so the bill would come with your state income tax bill- though those states without income tax would have to generate bills that didn't exist before, or abandon travel taxes entirely. I'm not sure though, if the fuel system retains the same sort of structure as it does today, even with alternative energies (and I'm assuming the point of this is due to alternative energy, otherwise we'd just stick with the gas tax), and I think there's good reason to believe it will unless somebody invents a car that can run on airborne nitrogen or CO2 or something, then yeah, I think point-of-sale tax collection is absolutely the way to go.

In any mileage tax collection system, I'd be concerned about broken odometers, unplugged sensors eliminating the recording of distance, or somehow blocking the GPS from working.

And there will always be fraud. One neat thing about America, though, is that we're notoriously honest when it comes to paying tax. I think the system would work quite well here- maybe not so much in certain southern European countries.

[wxfree]

I left out consideration of vehicles that don't use regular fuels.  Those who don't use commercial charging stations would be captured by the annual audit.  As I recall, the Texas program would give people the option to make quarterly payments or give them a discount for making a one-time payment.  That seems like a good idea.

Using this plan only for those who have applicable vehicles, not powered by fuel bought at commercial stations, reduces the number of individuals who are billed directly by the state.  Out-of-state mileage would be paid to the home state, unless that was somehow corrected.  The GPS for those vehicles could record the state of travel without recording the time and exact location.

[wxfree]

What about using some kind of device that "sees" the road pass by to record mileage?  It would somehow calibrate itself to measure the distance traveled by making whatever geometrical adjustments are needed based on its location.  It would do nothing but see and measure the road under the car and have no ability to record location.

[corco]

What about using some kind of device that "sees" the road pass by to record mileage?  It would somehow calibrate itself to measure the distance traveled by making whatever geometrical adjustments are needed based on its location.  It would do nothing but see and measure the road under the car and have no ability to record location.

So an odometer?

[wxfree]

What about using some kind of device that "sees" the road pass by to record mileage?  It would somehow calibrate itself to measure the distance traveled by making whatever geometrical adjustments are needed based on its location.  It would do nothing but see and measure the road under the car and have no ability to record location.

So an odometer?

It is redundant, but GPS is redundant, too.  The odometer on my car is broken, but this other odometer could break, too.  Odometers can be inaccurate, and can be made inaccurate based on choice of tires.

The odometer is already there, but if we're adding equipment to measure mileage, and not wanting to track location, some alternate odometer might be an option.  Likely what they really want from the extra equipment is location data.  Even if they don't ever see that data, they may charge differently based on time and location.

I suppose this idea may be of minimal value.

[corco]

Yeah, I see what you're saying. You'd need to retrofit something else that can transmit- perhaps that could one day supplant OEM odometers, but older cars would need them.

[wxfree]

I'm not an expert in this field, but I wonder if this is something we really need to do.  I can see the need to tax vehicles that don't use taxable fuels, but I wonder if the problems with the fuel tax aren't actually unresolvable.  Why can't we raise the rate of the tax and fund roads that way?  It's worked for a long time, it's efficient, and we'll be using gasoline and diesel fuel, and probably soon natural gas, for a long time yet.  I don't get why we need to change the whole system to deal with a small number of vehicles instead of dealing with those vehicles separately.  When the number of vehicles requiring this alternate taxation becomes large, then it may make sense to look at changing the whole system.

My concern is also with time or location based charging.  I'm not eager to see commuters charged more to get to work just because we can do it and they have to pay.  I'm not eager to see the best roads cost more to drive on, pushing traffic onto lower classes of roads less suited to heavy traffic.  I've always thought of slow traffic as an effective "congestion tax," disincentivizing use of the roads by those who don't really have to drive at that time.

[bugo]

GPS isn't always reliable.  I use a GPS speedometer app on my phone, and it isn't very accurate at times, and sometimes it doesn't work at all.  The technology just isn't there yet.

[roadfro]

I'm not an expert in this field, but I wonder if this is something we really need to do.  I can see the need to tax vehicles that don't use taxable fuels, but I wonder if the problems with the fuel tax aren't actually unresolvable.  Why can't we raise the rate of the tax and fund roads that way?  It's worked for a long time, it's efficient, and we'll be using gasoline and diesel fuel, and probably soon natural gas, for a long time yet.  I don't get why we need to change the whole system to deal with a small number of vehicles instead of dealing with those vehicles separately.  When the number of vehicles requiring this alternate taxation becomes large, then it may make sense to look at changing the whole system.

The reason governments are looking at these options is that the gas tax doesn't go as far as it used to. Lets say back in the day most cars got 17mpg city/22mpg highway, but now newer cars are getting 25mpg city/32 mpg highway. The newer cars are using less fuel to drive the same distance, so there is less tax coming from regular gas-powered vehicles because they're more efficient--at the same time they are causing more wear on the roads without providing more tax revenue to fix those roads.

Short-term, a gas tax hike could be beneficial fix to the dwindling highway fund. Long term, as more cars become fuel efficient and more hybrid or alternate fuel vehicles get on the road, the gas tax will need to be replaced by something more equitable.

[Duke87]

Let's be honest. The real reason VMT gets talked about as a revenue source is because with gas prices already perpetually "too damn high" these days, raising the gas tax is a political non-starter. So instead we've got this idea for an alternative way of collecting the tax that produces just as much revenue but creates less sticker shock.

And of course they're going to do it by putting a government issue homing beacon into your car rather than using existing technology, because no opportunity to spy on everyone even more can possibly be passed up. 

[Road Hog]

Let's be honest. The real reason VMT gets talked about as a revenue source is because with gas prices already perpetually "too damn high" these days, raising the gas tax is a political non-starter. So instead we've got this idea for an alternative way of collecting the tax that produces just as much revenue but creates less sticker shock.

And of course they're going to do it by putting a government issue homing beacon into your car rather than using existing technology, because no opportunity to spy on everyone even more can possibly be passed up.

Less sticker shock, that is, until at the end of the year you've driven 40,000 miles and you're hit with a $400 tax bill (assuming a penny a mile). Meanwhile, you're still paying a gasoline tax. That's never going to go away.

There is no need to use spy gadgetry. Just take odometer readings from year to year when you get inspected. But I'm 100% against this because I drive a lot of miles and it'll cost me more.

[wxfree]

So instead of generating extra revenue at essentially no cost, by increasing the already collected, administered, and enforced fuel tax, they want to add a new tax that will cost people as much as the fuel tax increase, and then cost more due to the new technology and new collection, administration, and enforcement expenses.  And, presumably, the people will love it, even though it costs more, because it doesn't raise the price of fuel.

And of course they're going to do it by putting a government issue homing beacon into your car rather than using existing technology, because no opportunity to spy on everyone even more can possibly be passed up.

This, I fear, is the real reason.  I'm not opposed to a mileage tax if the costs are lower or it's otherwise more effective compared with fuel taxes (and it doesn't invade privacy).  Below some threshold, it isn't worthwhile to set up the structure to collect taxes from owners of vehicles that don't use taxed fuels; beyond that point it makes sense to set up a system to collect road charges that will generate substantially more revenue than the cost of the system.  Further, at some point, due to the non-taxed fuels vehicle numbers increasing, and other technological innovations and inequities, it will become worthwhile to collect road charges from everyone based on mileage.  It's certainly a good idea to be preparing for these events.

What I'm unconvinced of is that we're anywhere near the point at which the fuel tax should be considered obsolete.  It's politically difficult to raise a tax.  Still, how many people think that paying $20 more for mileage taxes is better than paying $15 in higher fuel taxes for the same benefit?

[jeffandnicole]

Let's be honest. The real reason VMT gets talked about as a revenue source is because with gas prices already perpetually "too damn high" these days, raising the gas tax is a political non-starter. So instead we've got this idea for an alternative way of collecting the tax that produces just as much revenue but creates less sticker shock.

And of course they're going to do it by putting a government issue homing beacon into your car rather than using existing technology, because no opportunity to spy on everyone even more can possibly be passed up.

Less sticker shock, that is, until at the end of the year you've driven 40,000 miles and you're hit with a $400 tax bill (assuming a penny a mile). Meanwhile, you're still paying a gasoline tax. That's never going to go away.

There is no need to use spy gadgetry. Just take odometer readings from year to year when you get inspected. But I'm 100% against this because I drive a lot of miles and it'll cost me more.

Some states there are no inspections; in other states, some people can go years without hitting an inspection station. 

In NJ, a new car doesn't need to get inspected for 5 years.  And since the new cars are getting the better gas mileage, those cars are the ones that are the concern.

For me in fact, I haven't been to an inspection station since 2001.  After that, I've leased vehicles with 36 month leases several times.  I now own my vehicles.  In February I'll have to go to get one of them inspected as it'll be at the 5 year mark. My first time getting a car inspection in 13 years!

[cpzilliacus]

The newer cars are using less fuel to drive the same distance, so there is less tax coming from regular gas-powered vehicles because they're more efficient--at the same time they are causing more wear on the roads without providing more tax revenue to fix those roads.

And many politicians at the state and federal levels are terrified of increasing motor fuel tax rates, even if the increased revenues are simply to maintain the existing system of highways.

[hbelkins]

I wouldn't complain about a modest (2-3 cent) increase per gallon.

[SP Cook]

Of course, no mention of the fact that the reason the highway trust fund is broke is because Congress spends the money on other things.

Correct answer.

The fact is government, all levels, tries to fool all of us with the idea that money is not fungible.  So they use things that a good number or even a majority might support (good roads, schools, whatever works at a particular time in a particular polity) as justification for ever increasing taxes.  Of course, government already has plenty of money to do the acceptable and needed things, like road construction and upkeep.  It just spends it on other things which government has no business doing.  Of course, they never ask you for tax increases for things like that.

[vdeane]

Let's be honest. The real reason VMT gets talked about as a revenue source is because with gas prices already perpetually "too damn high" these days, raising the gas tax is a political non-starter. So instead we've got this idea for an alternative way of collecting the tax that produces just as much revenue but creates less sticker shock.

And of course they're going to do it by putting a government issue homing beacon into your car rather than using existing technology, because no opportunity to spy on everyone even more can possibly be passed up.

Less sticker shock, that is, until at the end of the year you've driven 40,000 miles and you're hit with a $400 tax bill (assuming a penny a mile). Meanwhile, you're still paying a gasoline tax. That's never going to go away.

There is no need to use spy gadgetry. Just take odometer readings from year to year when you get inspected. But I'm 100% against this because I drive a lot of miles and it'll cost me more.

Some states there are no inspections; in other states, some people can go years without hitting an inspection station. 

In NJ, a new car doesn't need to get inspected for 5 years.  And since the new cars are getting the better gas mileage, those cars are the ones that are the concern.

For me in fact, I haven't been to an inspection station since 2001.  After that, I've leased vehicles with 36 month leases several times.  I now own my vehicles.  In February I'll have to go to get one of them inspected as it'll be at the 5 year mark. My first time getting a car inspection in 13 years!

On the other hand, in states like NY, you get a yearly inspection no matter what.