Driver Mileage Could Be Taxed

Policymakers and analysts are considering new sources to fund highway spending.

The reasons, they said, were that federal spending on highways exceeded available funds and current taxes don’t give drivers incentives to consider how much road use costs.

The Congressional Budget Office (CBO) just released a study that looked at alternative approaches to highway funding.

The main alternative proposed was taxing motorists for every mile they drive. That didn’t sit well with some motorists.

“Why? We pay for the gasoline, we pay for the cars, we pay for the sales tax, we’re paying tolls,” Austin Horan said.

“Those taxes on gas were designed to pay for the highways, so why should you tax us again?” asked Nick Zambrito.

In its study, the CBO stated there’s a realization that fuel taxes are not giving motorists incentive to use highways efficiently. Basically, people travel, the roads get damaged and there’s not enough money to fix them.

The goal of a vehicle-miles traveled (VMT) tax would include providing more federal revenue for highways, reducing pavement damage, and helping state, regional or local governments solve particular congestion problems.

According to the study, a driver’s mileage tax could be tracked through a device that would be mandatorily installed in new vehicles. Old vehicles would be retrofitted.

It’s not clear how much the device would cost or what it would look like.

The study suggested the transition period could take 15 to 20 years. There’s also the possibility the taxes could be tracked and collected at filling stations.

One concern with tracking devices is privacy. The study suggested limiting the government’s access to the data collected.

Drivers won’t necessarily be taxed all the time. Possibly only at certain locations, during certain times.

Still, many believe they’re already being taxed too much.

“It’s becoming like it was in the 1700s where they taxed you for tea, they taxed you for this,” Zambito said.

“I’m amazed at how many taxes I pay and how many different ways they find to do it,” said Horan.

The study also included pilot tests for mileage-based user fees in three cities. Most results showed a reduction in the miles drivers traveled.

To read the study, click here.