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What is it about mileage taxes Obama doesn't understand?

The vehicle mileage tax, taxing vehicles by miles traveled, is gaining speed in Congress, but Team Obama is in the slow lane.
An icon for the American road trip. (Julie Van Pelt)

An icon for the American road trip. (Julie Van Pelt) None

During his successful campaign for the presidency, Barack Obama embraced the cause of surface transportation, arguing with gusto for improvements to inter-city high speed rail, for research and development to advance the mainstream adoption of alternative fuels, and for other green transportation initiatives. In contrast, John McCain trilled one note on the evils of transportation funding earmarks. To those who follow surface transportation policy, the difference between the two was stark: Obama won big points as the more knowledgeable, engaged, and passionate of the two. McCain appeared to be either out of his depth, disinterested, or constrained by poor political counsel.

Now flash forward to our current and befuzzled times. While a disappointingly scant $50 billion of the $787 billion federal stimulus bill was allocated to transportation, Team Obama seemed again to be warming to transformation when newly-appointed Transportation Secretary Ray LaHood in a wide-ranging recent interview told Joan Lowy of the Associated Press the country needs to take a good hard look at taxing vehicles by the mile, and more regional tolling. The White House brusquely and publicly notified LaHood that in mentioning a mileage tax he had wandered far off the reservation.

That's hardly where the story ends, as I will explain below. But first, just what is this beast, anyway?

The vehicle-miles-traveled tax, or VMT, is seen by backers as a better way for drivers on our nation's worn out highways, bridges, and roads to pay as they go, resulting in a more sustainable surface transportation system. A VMT is also meant to make choices such as transit, ride-sharing and tele-commuting more attractive than peak-hour solo driving, while helping to fund those alternatives, too.

Why do some believe a VMT is needed? Even if raised, the by-the-gallon federal gas tax will fail to deliver over the long haul, as vehicle fuel efficiency continues to increase. The big federal Highway Trust Fund that tax feeds is already on last-gasp life support. Meanwhile, VMTs have already been successfully beta-tested in, of all places, Central Puget Sound, and the state of Oregon, which is widely seen as a national leader in evaluating the policy's possibilities.

What about common criticisms of a mileage tax? The answer is to design it well. A VMT can be designed to protect privacy. It can also be calibrated to give discounts to drivers of more fuel efficient vehicles and those who travel during off-peak hours and on less-congested roads.

By 2020, Congress willing, GPS trackers could be built into all new cars sold in the U.S. and added to older ones. Cross-state coordination would be required, as would inter-operability between a federal roads VMT and state or regional tolling systems. Regional systems, in addition to imposing time- or congestion-sensitive electronic tolls on certain bridges and stretches of highways, could extend the VMT concept to major arterials or even all streets and roads. Such a bold step is all but unthinkable today, but could help make maintenance of county and local roads and funding of regional transit less dependent on endless ballot measures and special pleadings to the Legislature.

To be sure, the costs and benefits of the current versus the new approach would have to be convincingly detailed to win voter approval for anything so radical as a mileage tax on arterial and sub-arterial roads. The political risks would be considerable at the front end, but could diminish sharply over time as turmoil around surface transportation funding eases and user benefits steadily accrue.

For Washington state, a national VMT on federal-aid roads would mean a steady funding source for the $2 billion worth of mostly-orphaned work needed on Interstate 5 between downtown Seattle and Northgate, and for the nearly $2 billion needed to fix fatality-plagued U.S. 2 which runs east from Snohomish County. That same VMT could be divvied up in such a way as to help fund more transit in those corridors, too. A regional or state VMT could provide a steady share of funding for all manner of languishing pavement repair, interchange re-design, Active Traffic Management, Intelligent Transportation Systems and life safety projects on roads, plus high-capacity corridor transit enhancements.


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Comments:

Posted Thu, Mar 5, 8:58 a.m. Inappropriate

Could it be that Team Obama wants the focus to be on tax reductions for the middle class and not tax increases until the economy recovers? Could it be that transportation is just one among a number of spending programs that create jobs and had to compete with education, health care, energy, and state/local government aid? And could it be that Crosscut has fallen into a pattern of trashing a President whose administration is just 40 days old (a negative pattern that started before Inauguration Day)?

Okay Obama. You wanna debate taxes? – Mar. 4

Opposition to Obama is forming up fast – Mar. 4

How big a change can Obama produce? - Mar. 2

Locke pick is a let-down – Feb. 25

Hold your nose and pass the bailout ammo – Feb. 23

Disturbing sub-texts to Obama's big win – Feb. 15

Kissing off the bipartisan approach, for now – Feb. 9

Why so many stumbles for Obama? – Feb. 5

Obama, Act I: a partisan stimulus plan – Jan. 30

Congress isn't purring yet over Obama's stimulus plan – Jan. 13

Obama's stimulus package raises some hard questions – Jan. 9

Obama's early stumbles – Dec. 19

Posted Thu, Mar 5, 9:39 a.m. Inappropriate

The gas tax works just fine as a miles-driven tax, and it promotes the use of high-mileage cars. The fact is, you can raise the gas tax as vehicle mileage goes up. There's no reason why you can't raise it, and it serves its function without spying on people and recording where they go. Built in privacy protections? HAH!
This is government we're talking about here. They take what they want, on the flimsiest pretext, at the point of a gun. Get real. If you liked warrentless wiretaps, you'll love the vehicle miles traveled tax.

dbreneman

Posted Thu, Mar 5, 10:46 a.m. Inappropriate

What a load of bull. A mile tax is exactly the wrong thing to do. You've all been suckered by the oil industry, who sees a chance to get a bigger cut of the fuel price pie.

Why oh why oh why are all these editorials swooning over a new tax, requiring new infrastructure, that "can be calibrated" to account for vehicles with different fuel economy? We already have such a thing -- a gas tax! This is simply an unnecessary complication, that will hit poor people disproportionately.

Disclaimer: I pay no road tax under the current scheme, since I make my own biodiesel, which is exempt from fuel tax in British Columbia and many other jurisdictions. For some reason, the legislature thought use of a locally produced fuel deserved a subsidy over non-renewable fuel shipped in from afar. I guess that will change when I'm taxed by the mile.

Posted Thu, Mar 5, 11:29 a.m. Inappropriate

I agree with dbreneman.
I'll throw out there that a couple thousand years ago odometers solved this overly complicated solution to this unusually simple problem.

Tax gas, tax power meters on autos at a much reduced rate (lighter things that have less friction with the road often go further).

This really becomes a rural punishment tax if "administered" as described in the story.

That add on GPS will not happen, you might as well ask people to have RFID chips planted in their skulls at birth, really, this is the stuff that justifys the tin-foil hat as a future fasion accessory.

Mr Baker

Posted Thu, Mar 5, 11:41 a.m. Inappropriate

A mileage tax does make sense both in terms of government funding and in terms of reducing consumption of gasoline. However, it is not that practical, really, in terms of collecting it since you have to check each car's mileage each year and set up a bureaucracy to deal with annual mileage checks. It makes way more sense to simply tax gasoline at the pump at a higher rate just in terms of practicality. It also has the advantage of impacting drivers of cars with bad mileage much more than drivers of cars with better mileage.

All that said, the previous commenters are correct it does not make sense in an economic climate that already dramatically disfavors the middle and lower classes to be taxing mileage or gas, since credit isn't available to car loans for better-mileage vehicles, either.

I also agree with dn that Crosscut is proving bizarrely anti-Obama in its coverage. The trend seems like a way merely to increase Web site hits (from outraged progressive Northwesterners) rather than an authentic, Pacific-Northwest editorial slant.

smacgry

Posted Thu, Mar 5, 11:49 a.m. Inappropriate

So, if we put a 2.3c per mile tax on cars you would raise about $180 a year more than you do with a 10c raise in the gas tax for a car that travels 10,000 miles at 20 miles a gallon. Are you telling me that you can install, monitor and bill every car in the country for that amount? Everyone who writes about this ignores the cost of implementation and administration of this vast new government agency. (I’m not even talking about the privacy issues here.) Granted a chunk of the cost would be tagged on to the price of new cars—like we are selling a bunch of those now--- but for those of us who don’t buy new (or is this to be mandated too?) cars where does the installation costs come from. Or am I to pay extra for the costs of my being taxed more?

Hike the gas tax—all the bureaucracy is in place already, higher gas prices stimulate demand for lower mileage or alternative energy cars. If your going to tax me by the mile, bring back my Hummer.

Again, can anyone please explain to me why we should listen to anyone supported by the Discovery Institute?

Posted Thu, Mar 5, 1:10 p.m. Inappropriate

The far-seeing urban greens are, well, far seeing again: one day not that long away, cars may well need little if any gas and have much less of a carbon footprint. The best selling justification for declaring cars evil will disappear and a new cost disincentive must make sure that sprawl gets abandoned and rots in-place. And this is why we must continue, depression or not, to rip out and entirely rebuild central cities at great carbon costs at densities that are adequate to house and employ long into the future all those who "come in from the cold"-- would otherwise sprawl. Ron Sims, himself, says so on a KCTV video he made at the height of the boom. I admit he left out out the carbon costs, but he was emphatic about cars being totally evil, no matter what propels them, for the above stated reason.

Raising the gas tax rate as gas prices fall (holding the total price relatively constant) is a practical, equitable idea whose time has come. As is taking the lock off using gas taxes for transit and other alternatives. But those ideas have little to do with outlawing suburbs, exurbia, local food production, self-sustaining small towns, and rural livelihoods.

What they do is make it possible for those "overlooked" all over again in the latest round of urban renewal to find a reasonable life for themselves instead of just putting their name on the waiting list for the urban subsidy lottery and hanging out till their government ship comes it, if ever.

Odd that Ron Sims then turned right around and came up with a program that enables these overlooked people accumulating outside the central city (in SE King County especially) to acquire a modest car so they can find and keep employment. Is this a strange world or what!

afreeman

Posted Thu, Mar 5, 2:12 p.m. Inappropriate

I think Obama understands that the fourth amendment to the Constitution (you know, the one about being secure in your personal affairs) is still in effect, and that this "mileage tax" is an blatantly egregious violation of that amendment. It is nobody's, especially the government's, business how far and where I drive my vehicle.

Here's a thought: let's tax the price of gasoline up to $4.50/gallon. At current prices, it could be spread out over two years, rising 10 cents a month so as to give people time to adjust (ride out car loan/lease, maybe move, maybe buy a scooter, etc.). For the truly needy, have something like the Earned Income Credit so they can get some of it back. The U.S. would still have the cheapest gasoline in the world, and the Constitutional rights of U.S. citizens would remain intact...

orino

Posted Fri, Mar 6, 7:37 a.m. Inappropriate

Your argument is specious. Taxing gas (or more generally, carbon) can achieve the same aim of incentivizing fuel efficiency and transit use without any of the downsides -- invasion of privacy, intrusive government, the specter of big brother tracking your every move.

I'm a good liberal and not some Black Helicopter-fearing nut, but even I don't want a government transponder on my car, creating a database of my every movement. And you guys look like control freaks and give Rush Limbaugh material by advocating for this.

Stop chasing some abstract sense of incentive perfection and wake up to political reality. Taxing gas/carbon will be hard enough to get through the political system. Adding to the objections for no additional environmental gain is pretty stupid.

Posted Fri, Mar 6, 9:21 a.m. Inappropriate

And instead of taxing cigarettes at the store, when BUY your cigarettes, you tax people when they SMOKE them. This more accurately penalizes people who pollute the atmosphere and their fellow citizens lungs, meanwhile going easy on those who buy a bunch of cigarettes but just leave them around the house and the car. This can be accomplished quite easily and unobtrusively by having a tiny chip implanted in the smokers mouth prior to being certified to buy cigarettes. A certificate of implantation would be required at the point of sale and, at year's end, the intensity of smoke use could be very accurately measured and recorded. I envision a tax on actual usage being included in your federal tax return.

kieth

Posted Fri, Mar 6, 12:37 p.m. Inappropriate

I have not formed an opinion on the mileage tax, but appreciate Mr. Rosenberg's well-written article.

I find it ironic and hilarious to read the complaints above about Crosscut's alleged anti-Obama bias. What I see is balanced reporting, in contrast to the obsequious fawning over Obama that much of the mainstream media has been doing for the last 12+ months. Refreshing!

I like Obama, but guess what --- he's not perfect, and it's OK for people to criticize him.

PJS

Posted Sat, Mar 7, 4:37 a.m. Inappropriate

Right on, kieth. And how about property tax that measures how many minutes per day one is actually in one's house? Maybe the smoke measuring chip and the house monitoring one could be combined for simplicity. A tax for sidewalks could measure how much one walks every day... If Maggie Thatcher's poll tax ever comes back, maybe it could be based on number of heartbeats, or volume of air aspirated. The possibilities are endless!

Posted Sat, Mar 7, 2:58 p.m. Inappropriate

The folks who seem to be against VMT are those who gain from the current system, e.g. drive high MPG cars and possibly lots of miles. Yet, as more people drive higher MPG vehicles and eventually plug-in vehicles, they're contributing less to the transportation system yet using it just the same. For instance, a plug-in vehicle pays zero gas taxes, while the conventionally-powered vehicle next to it has an owner who is paying gas taxes, yet both are using the roadway. A VMT is merely a user fee: those who use the highways the most and provide the most wear and tear pay the most. It could augment the gasoline tax or a "per vehicle" assessment; the latter could be based on weight. In addition, those who install and use studded tires could also be assessed a fee for the road wear they cause.

bricsa

Posted Sat, Mar 7, 5:19 p.m. Inappropriate

no, not using it just the same, in order to get that higher mpg you have to cause less damaging friction.

Mr Baker

Posted Sun, Mar 8, 12:38 p.m. Inappropriate

Gas tax, milage tax, the effort to finance road repair, or reduce the carbon footprint all seem to have been conceived by those who live in metropolitan areas, small states or even small countries as in Europe. Superimpose a map of Texas, Montana, or even Washington State on a map of Northeastern United States or Europe.

Easterners and their politicians along with our own “Think Tankers” are notoriously unfamiliar with the great expanses of the western rural areas of our nation. Presumably people who have access to public transit or hybrid vehicles have less concern than the farmer who, in today’s economy, often must put hundreds of miles per month on trucks and autos. Just guessing, but the median distance to a rural grocery store in many rural areas of Montana may be 50 to 60 miles.

Even in Washington State farmers in rural areas don’t have public transportation. Greyhound has all but stopped serving small towns along with trains. A pick up truck is often the only vehicle for a rural farm worker. Currently there are no hybrid combines, tractors or grain trucks. With no alternatives and great distances to travel neither the gas tax or miles traveled is fair to the farmer or other resident in the great western expanses.

On the other hand farmers carbon footprint is small compared to a city dweller simply because fewer people live in rural areas. City dwellers often live in their own little world without comprehending the dependence we all have on rural America and the value to the economy they provide. If more farms fail our dependence on food will shift even more to offshore producers.

What ever system for taxation results, it must compensate for geography and the value to the economy the taxing region or system serves. As we begin to address the changes necessary for global warming it pays not to be taken in by the ideologue whose simplistic solutions fail to comprehend the unintended consequences.

KK

Posted Sun, Mar 8, 4:38 p.m. Inappropriate

The VMT seems to assume that there is a viable public transportation system in place as an option. The commute east-west from Ballard to Redmond where I work is about 2-2.5 hours each way door-to-door and 50 minutes to an hour each way by my car (30+ miles per gallon). If there was a transit option that took only and hour and a half each way, I would be on it. I certainly don't want to drive in rush hour traffic but if I moved over there, my rent would double and the social life would be zilch.

I would support alternative forms of transportation funding options such as tolling and VMT when our government and local political leaders put in more than the current half-hearted effort into public transportation. There have to be genuine options before forcing people off of the roads. Another problem with the scenario in the article is the massive over-managed (and revenue-consuming) verification schemes for variable pricing. These overcomplicated technological solutions will be a nightmare to properly manage, eat up a sizable portion of the needed money and create another bureaucracy that "keeps tabs" on individual citizens. Three strikes in my book.

Posted Mon, Mar 9, 12:36 a.m. Inappropriate

One of the best ways to spur innovation is to decrease or eliminate all such usage fees until business regroups and starts creating jobs.

Allowing people to travel far and wide to new jobs, cheaper housing, or to transport goods without egregious and unwaranted taxation are all proper actions during Recession.

The Obama Democrats have done the opposite, burdening the households with unrecoverable taxes and funnelling money upstairs to their cronies and hangers on.

jabailo

Posted Mon, Mar 9, 9:33 a.m. Inappropriate

abcs:

Ah, now I get it. It's to counter the plug-in vehicle. Why didn't Rosenberg say that? why write an article that ignores the the only rationale for what seems like a totally perverse idea? dealing with the electric car dilemma is worth writing about.

kieth

Posted Mon, Mar 9, 7:30 p.m. Inappropriate

Matt -

I think the better question is to ask, "What is it about the mileage tax that YOU don't understand?" What a complete waste of time and money to implement an entirely new billing infrastructure when all that's needed is to RAISE THE FEDERAL GAS TAX. RAISE THE FEDERAL GAS TAX. Let me say it again, RAISE THE FEDERAL GAS TAX.

It's really as simple as that. The "anti-tax" and "big-government" crowds who express outrage at the idea of raising the gas tax will be there to express outrage about the mileage tax. So after spending billions on a new billing infrastucture, the roads will still be underfunded.

The problem with bad roads has NOTHING to do with technology. It has everything to do with politics. The politics of not wanting to pay for public infrastructure. Raise the Federal Gas Tax to make up for the loss due to inflation over the years and you'd have plenty of money for roads. But the Republican Party is the party of NO. NO taxes. NO way. And by extension, no safe roads.

Posted Tue, Mar 10, 9:56 a.m. Inappropriate

Richard, the plug-in electric car will pay NO gas tax. Ergo, there needs to be a mechanism for plug-in vehicles to pay their share. There may be another way for electric cars to pay into the road maintenance fund, other than the snoop chip (tax on batteries, tires?), but there is a need for something other than taxing gasoline.

kieth

Posted Tue, Mar 10, 5:32 p.m. Inappropriate

I'm against this millage tax for the privacy issues previously stated.
Kieth's right, thought, we do need something in addition to the gas tax. We use to have a nice supplement in the car tab fee, but the idiotic $30 cap means that transportation is woefully underfunded. There is a disconnect out there, may people want both low taxes and extensive government services. Until we can get through to them that this is not possible, we will never have the political strength to adequately fund transportation. I suppose we could let the free market take over building the roads and end up with a Washington equivalent of the New Jersey Turnpike. Not if I have anything to say about it.

--David A.

iulawboy

Posted Fri, Mar 13, 4:51 p.m. Inappropriate

Kieth -

Good point. Fair point. The solution to that would be to raise the MVET. In Washington State, they call it an Excise tax. In states like Missouri, they call it a motor vehicle property tax. And it's non-controversial.

The problem in Washington State is that the Democrats (mostly) think the way to govern is by secrecy. This creates a fertile ground for people like Tim Eyman to gut the MVET tax.

The solution for this state is to restore the MVET, like other states have. So when you buy an electric car, you'll be paying sales tax. When you drive an electric car, you'll be paying MVET. And the people still using gas will be paying a more representative gas tax, which needs to be RAISED.

All of this avoids the goofy desire of some people to put in a massive, computerized, GPS-driven tax collection infrastructure. And one where your every move can be tracked. Talk about big-government, big brother, waste of money.

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