Earlier this year as President Obama selected his cabinet, he received considerable praise for many of his choices. One glaring exception was the inexplicable selection of Republican former Illinois congressman Ray LaHood to head up the Department of Transportation. Nothing in LaHood's background suggests that he has significant expertise in transportation of any kind, much less the inclination to focus America on the forward thinking transportation policies that are so critical right now. I couldn't shake the feeling that the selection of LaHood would haunt us in the form of lost opportunities, as we embark on a stimulus plan that could have changed the transportation and infrastructure direction of America for decades. Now, a story on MSNBC is confirming my fears that LaHood may be interested in implementing the exact opposite of smart policy, by funding highway construction through an environentally regressive "mileage" tax.
Much of our highway construction and maintenance is currently funded by a per-gallon gasoline tax. Obviously this tax scheme extracts more money from people who drive gas guzzlers, and less money from people who drive fuel efficient cars. It fits neatly into the concept of an overall carbon tax, where polluters pay for every pound of CO2 emitted to the atmosphere, and from an environmental perspective is a very progressive tax structure. Well it turns out Prius-driving environmental tax cheats are getting under Ray LaHood's skin, and he is looking for a way to make sure they pay as much highway tax as their Hummer driving neighbors. He wants to do this by taxing people on the miles they drive, regardless of how much gasoline they consume.
Transportation Secretary Ray LaHood says he wants to consider taxing motorists based on how many miles they drive rather than how much gasoline they burn — an idea that has angered drivers in some states where it has been proposed.
Gasoline taxes that for nearly half a century have paid for the federal share of highway and bridge construction can no longer be counted on to raise enough money to keep the nation's transportation system moving, LaHood said in an interview with The Associated Press.
"We should look at the vehicular miles program where people are actually clocked on the number of miles that they traveled," the former Illinois Republican lawmaker said.
If implemented, this policy would gut one of the few carbon taxes we currently have. It also will reduce some of the financial incentive to drive fuel efficient vehicles, which is the exact opposite of the kinds of policies we should be seeing out of this White House.
Now granted, as we move towards greater fuel efficiency and the eventual electrification of the automobile, we will need an alternate to the gas tax. Just because we are using less gas doesn't mean our highway maintenance costs are decreasing. Infrastructure must be paid for somehow, and it makes sense for the vehicle owners to shoulder much of the cost. And in this regard a mileage tax does have merit.
But any mileage tax MUST take into account the gasoline used and the highway wear by different vehicles in order to be fair. So I propose a modification to a straight mileage tax that would be very easy to implement, would still charge people on a mileage basis, but also would reward fuel efficiency and preserve the "carbon tax" essence of the current gas tax. My proposal is this:
Every vehicle sold in the US has EPA estimated fuel efficiency numbers associated with it. A mileage tax should tax every car at a given flat rate per mile driven, and then add a multiplier calculated using this EPA fuel efficiency number. The higher the mpg rating of a vehicle, the lower the multiplier. An additional multiplier could also be tacked on for vehicle weight. This makes sense because pavement degradation is affected by vehicle tonnage. Therefore, a zero-gasoline electric SUV would still pay above the base rate, whereas an electric Mini Cooper would not. This tonnage tax would become more relevant as gas use continues to decrease, and is easy to implement since the weight of all vehicles is on record.
I have read that just like Mr. LaHood, numerous states are looking at mileage taxes to offset decreased gas tax revenue. But I haven't seen any discussion of using mpg or tonnage multipliers as a way to still reward energy savings. Have you? Do you think this is a good idea or a bad idea? I am interested in your opinions.