EDITORIAL: CBO’s toll-road fib--Vehicle-mile tax would hinder America’s greatest invention

While officially nonpartisan, the Congressional Budget Office (CBO) occasionally lends its credibility to the most fashionable theories emanating from the left. The agency’s green eyeshades issued a report Wednesday that perpetuates one of Washington’s biggest lies: that drivers don’t pay enough in taxes. Bureaucrats and rent-seeking corporate allies have teamed up to advocate a solution to a problem that doesn’t exist. They want continuous tracking of everyone’s driving so that every mile can be taxed.

The claim is that driver’s aren’t paying their fair share because the $35 billion collected in federal gasoline taxes doesn’t cover highway spending. Never mind that a sizable chunk of the Transportation Department’s “highway” funds is diverted into things like mass-transit programs and grants to local police departments to run speed traps. Anyone who owns an automobile knows there’s no end to the registration fees, personal property taxes, state gasoline taxes, inspection fees, parking tickets and other governmental levies on vehicle ownership.

I’ll insert my generic post on Road Pricing...

Road Pricing

So here we are, looking at a mileage tax. It’s very emotional, since it squarely attacks one of our major freedoms in the US, which is the ability to get in our cars and drive around without ANYONE knowing what we’re doing. We can even drive cross-country and it’s likely that no one will know we ever left home, if we pay cash the whole way and stay clear of places (like motels) where they require ID. So, I want to take a calm and measured look at this.

In my case, based on my income (assuming, of course, it continues), my debts (very small, just a house payment at 20% of my take-home, and my cash at hand (plenty), I figure that I can pay whatever tolling rates they want, without barely noticing. And, if they did implement this scheme, it would almost certainly clear the roads of traffic, something that I would like (although others would have a tough time affording to drive on those clear roads - after all there is a reason why they’d be clear). In other words, from a purely selfish standpoint, I should support this scheme...but I don’t.

So why not? In a perfect world, where Atlas DOESN’T have to shrug and where everyone acted as finely tuned robots, nothing could be better than pricing road travel to assure the exact same level of traffic at 4:30 in the morning as 4:30 in the afternoon...and the same traffic at 5 AM Sunday, as 5 PM Friday. We would simply get the best use out of our roads. That is why this idea sits well at CATO and Heritage...where very well-paid, pointy-headed guys simply want to be able to drive home after work without having to “fight the traffic”. But, of course, it’s not that simple.

So, let’s step back and look at why we might want to impose a Vehicle Mileage Tax (VMT). I can think of several reasons:

1) There are two many cars on the road at a given time (i.e., rush hour).

2) We are importing too much oil.

3) We are not collecting enough revenue to fix and expand our roads.

4) People are driving cars that are too big

5) We are emitting too much carbon

6) Driving without restrictions simply represents too much freedom for a modern, progressive, society.

7) We want to sell-off our roads to someone with lots of cash, to pay down the national debt.

So, you step back and try to figure out how to address the above and look at the options.

Option 1: Increase revenue enough enough money to keep up with highway needs

Option 2: Increase revenue enough to seriously cut down on road travel and provide extra money for social programs.

Option 3: Control the movements of people, and allow those movements to be monitored...also pay back debts to other countries.

You find that an increase of the gas tax will help with everything except #6 and #7, which is controlling freedom and paying our debts. Even with a high gas tax, people will still drive where they want, when they want. If money is just needed for highway repair and expansion, an increase of the gas tax of, maybe, 25 to 50 cents per gallon will easily cover it. If we want to cut way back on imported oil, then 2 to 4 dollars per gallon of tax increase will cover it. That same increase (2 to 4 dollars per gallon) will also provide PLENTY of revenue to repair and expand highways...and the expanding part will not even be necessary with fuel prices that high (i.e., there will be a LOT less driving).

So we come down to #6 and #7. #6 (i.e., monitoring of peoples’ movements) is obvious - once you have GPS, then THE G-MAN will know where you are at any time. For #7, you’re getting into how to payback our creditors (mainly the Chinese and Japanese, but also much of Europe and US banks). The idea is that once a mileage-based tolling system is in place, the revenue can be sent overseas and our banks...which may prevent WW3 (particularly after we finish disarming). The amount of money that can be generated...if priced for maximum revenue, is likely 30 to 50 cents per mile (average)...or close to a trillion dollars per year.

To be honest, I have no clue what the long-term intentions are, I only look at what COULD be done.

Needless to say, this crap needs to be stopped PRONTO, as we have much better options than giving government control over where we drive, what we drive, and when we drive.

“Let’s look at a basic flaw of the fuel tax: in some respects it has no connection to just how much use a motorist has on a highway system. Think about it: if two vehicles are driving next to each other from Los Angeles to New York and one of them gets 40 miles per gallon of fuel and the other gets only 20, does the second car really “cost” the public only half as much for the use of the highway system between Los Angeles and New York? “

Thanks Alberta. However, often it does cost half as much, if the car getting 20 MPG is twice the weight and is also chewing up the concrete at twice the rate.

My overall point is that people in the US will pay, at least, an extra 20 cents per mile to drive (it’s that important)...but highways are VERY CHEAP to maintain, and even expand. Increase the gas tax the equivalent of maybe 1, or at most 2 cents per mile (i.e., 20 to 40 cents per gallon) and all the needed money will show up. But install a VMT, and they WILL want the full 20 cents per mile...with at least 90% of it going to ‘healthcare’ or something else unrelated. So, sure, the gas tax isn’t perfect, but it does limit the overall taxation of government and giving government a new way to tax will be VERY PAINFUL to drivers...who will have to pay for everything under the sun, including roads (as they do in Europe now).

I think roadway maintenance is much more expensive than you imagine. I work as a civil engineer on long-range planning for big transportation projects, and I typically use $10,000/year per lane-mile as a very rough order-of-magnitude estimate of operating/maintenance costs. That's probably a bit on the high side because I work in the Northeast and it includes snow removal expenses that are not a factor in many parts of the country, but let's just use that as a rough number for now.

According to the U.S. Bureau of Transportation Statistics (see here), there were about 8.5 million lane-miles of roadway in the U.S. as of 2008. At a cost of $10,000 per lane-mile, that's $85 billion/year in maintenance costs -- combined for all levels of government. This is mainly carried by state, county and municipal governments, since the Federal government typically pays almost nothing in maintenance costs (Federal fuel taxes are used for capital projects, not maintenance).

It's important to note that these figures don't even reflect the cost of upgrading or replacing highways. This is a critical point because it is a big reason why this issue has reared its ugly head in the last few years. The Interstate Highway System turned 50 years old in 2006, which means enormous sections of the original Interstate Highway System have basically reached the end of their useful life and need to be rehabilitated or replaced.

As far as your point that a vehicle getting 20 mpg may "cost" the public more in wear and tear on a road than one that gets 40 mpg, it's worth noting that most roads are designed to accommodate heavy trucks. The difference in wear and tear between a 4,000-lb. light-duty truck and a 2,000-lb. car is negligible. In terms of use (as opposed to natural elements like ice, snow, heat, etc.), the biggest impact on the life cycle of a road is felt at the high end of the weight range (e.g., a gross vehicle weight of 80,000 lb.).

On the last item I agree with you 100%. There's no way in hell anyone should be supporting any kind of fuel tax or VMT tax or anything of that sort -- unless the revenue is dedicated exclusively to the highway trust fund.

“On the last item I agree with you 100%. There’s no way in hell anyone should be supporting any kind of fuel tax or VMT tax or anything of that sort — unless the revenue is dedicated exclusively to the highway trust fund. “

At least we agree there...

At to the paying the cost of 8.5 million lane-miles, half of that number is non-highway lane miles (as you mentioned) that were never covered by the gas tax. Thus, the actual lane-miles of highways in this country comes out to around 4.25 million

Using your number of $10,000 per lane mile, that comes out to $42.5 billion per year. If people drive 3 trillion miles per year, per this site:

http://bigpicture.typepad.com/comments/2008/06/chart-of-the-da.html

...then we need to collect a bit over a penny per mile (1.4 cents to be exact). If cars average 20 miles per gallon, then it’s 28 cents per gallon that’s needed.

Not a huge amount at all, and we’re almost there with our gas tax. We certainly don’t need a VMT, which will almost certainly collect 10 or 20 times that amount.

As to all of those Chevy Volts and other freeloaders...if it really comes down to it, then hit them up with a VMT (just for them), or tax the electricity they use. Don’t punish other drivers.

As to smaller cars not paying as much...I don’t have a problem with that, if the gas tax is kept on the order of a penny per mile...the cost is negligible for everyone (relatively speaking)...and I REALLY LIKE the idea of them not making this country import nearly as much oil as the bigger cars.

And, as I’m sure you know, a VMT will cost a LOT MORE for big cars...so the little cars will still get a free ride (or closer to free ride). That’s the nice thing about a VMT, you can set it ANY WAY you want: Vehicle weight, engine size, MPG, when the car is driven, where it is driven, income level of the owner, importance of the person (i.e., politicians get a free ride), vehicle color.

So, be careful what you wish for...we might just get it.

1) There are two many cars on the road at a given time (i.e., rush hour).

If you want to reduce that you need to reduce employment. People driving in rush hour are going to or from work. Taxes have no effect on this because the job pays for the transportation. The mileage tax doesn't help here.

2) We are importing too much oil.

If the taxing is done per mile then it makes sense to buy the largest, least efficient truck you can get. This way you can deliver more per mile driven. The mileage tax is ineffective here.

3) We are not collecting enough revenue to fix and expand our roads.

There is no such thing as "enough revenue." Every budget can be expanded by 10%, infinitely. The mileage tax is ineffective here because the goal is not attainable.

4) People are driving cars that are too big

As I mentioned above, the mileage tax would work to make this problem worse.

5) We are emitting too much carbon

The mileage tax would reward you for emitting megatons of carbon per mile driven, as long as you only drive that one mile. I heard the Shuttle crawler will be for sale soon...

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