This might end up being a workable compromise between gas tax vs. no gas tax. But I bet we'll see many people hacking their transponders and it doesn't provide much of an incentive to use fuel efficient vehicles. A gas tax would be less invasive and more transparent.

So you believe that if I drive 1,000 miles in my economical little box I should pay more in taxes than the guy who drives 500 miles in his SUV?

It could be much less intrusive than having a transponder in each vehicle. Instead, you could have a system where auto mechanics provided a certified statement of your odometer reading each year.

I suppose they could take your annual miles and assess your tax via the 1040. What about folks who live in rural areas and have to drive significant distances to work? (e.g. folks in Central Maine who work at the shipyards in Bath). It seems like they'll be taxed for being too poor to move closer to work.

There is beyond dumb.

Using an average MPG for cars, there is no difference between a gas tax and a miles tax. None. Except the miles tax requires money to be spent on installing trackers, and the government actually has to do tracking.

Oh,boy...you know, like the transponders they use for toll roads? Like they are all over the place? Or the ones they use in rental vehicles? Like you think this will be hard to implement? Like they couldn't give a tax break to poor people or rural dwellers in some form?

Ok, I assume some people don't know about these things but even in hicksville colorado I do. So it will be easy to implement, but the fairness is debatable.

This won't go anywhere without huge exceptions. The greatest miles are down by trucks. Say you're a certain big box retailer that depends upon your logistics network to help keep your costs low *cough* Wal-Mart *cough* and suddenly your costs will skyrocket causing people to realize hey, these prices really aren't that special! So you fight this until you kill it or get an exemption that pretty much defeats its purpose.

It seems a bit pointless. Gas usage is a good proxy for a function of miles driven and vehicle weight (because weight would HAVE to be considered to properly measure contribution to wear and tear of infrastructure). Miles x Weight is a good proxy of gasoline consumption and thus pollution. Thus as externalities go, both are largely equivalent measures.

The primary difference is a gas tax incentivizes fuel efficiency more strongly and is easier to administer (thus saving on administrative/transaction costs). Perhaps there is some sort of political advantage to the "smoothness" of a vehicle miles tax, but it just doesn't seem worth it.

If you want to get around the price fluctuations of gasoline, then tax gasoline by volume rather than by price. It's not fucking rocket science.

>There's some logic to that.

But not much. All the gas tax does is put a fixed offset onto that squiggley line, and interestingly enough (using math so simple even an economist could work it) the large the base offset the less the overall squigglyness when graphed in percent as shown.

Ah southpaw posted something important whilst I was typing - I was speaking of a volume (per gallon) tax of course.

What southpaw said -- and note that usually gasoline taxes proposed are per gallon rather than per dollar, so Ezra's little plot is irrelevant.

Gas is already taxed by volume, not by price. $0.184/gallon (federal). And yes, that does kind of make the argument in the original post inexplicable; if anything, taxing gas makes gas prices LESS variable.

The mileage tax option is a horrible idea for dozens of reasons, many of which have already been mentioned.

The argument that we, as a nation, need to do less to encourage fuel efficiency has to be the worst idea ever.

I really don't get this. We already have federal (and state) gas taxes. Therefore there would be no cost to implement a rise in the rate; there would be a significant cost to implement the VMT regime. Plus VMT is catnip for loony conspiracy theorists. Plus VMT does not encourage improvements in fuel economy.

I'm not exactly sure what's being misunderstood here, but something is. The price of gas changes drastically throughout the year. As such, taxing it is more politically volatile than taxing something that doesn't suddenly become a major political issue every August. Imagine a campaign with a gas tax at its heart happening in July: They'd be torn apart.

That said, I don't think a miles traveled tax will happen either. But then, I think we're basically screwed on global warming.

The gas tax is only tracks unstable price behavior of gasoline if it's based on the price of the gasoline. If you set the tax as a fixed (or varying only by legislation) amount per gallon, you don't have to worry about gas price fluctuations.

Ezra wrote: "The heaviest drivers -- both in terms of frequency and car weight -- exert the heaviest wear-and-tear on the roads."

The above premise is totally false!

Heavy trucks damage the roadways, cars do not. Yes, it is that simple. Ask a highway engineer.

Cheers,

Alan Tomlinson

If they start taxing by miles, then lots of people will buy really old cars (e.g., 80's models) in a sure-to-be-booming black market that get crappy mileage but won't have any sort of transponder. Talk about counter-productive! Just raise the gas tax by a nickel or two. Only wing-nuts will care.

Is your gas price data inflation-adjusted? Because I see an overall trend of exponential growth, which *could* reflect the world's dwindling oil supplies, but could just as easily reflect that you're using nominal rather than real gas prices.

Also, does the smoothness of VMT given the wild fluctuations in gas price prove that driving is price-inelastic? And if so, what implications does that have for attempts to incentivize different transportation behavior through cost shifting?

Oh, and shouldn't we be looking at ton-miles instead of vehicle-miles anyway? Counting a fully loaded bus, an 18-wheeler and a motorcycle each as one vehicle is rather silly, especially when the proposed tax has a weight adjustment anyway.

Sorry for the fragmented posts, I keep thinking of something new after posting...

es: raising gas taxes by even a nickel will bother a lot more people than wingnuts. possibly sad, but certainly true.

Ezra: your point about the relative political viability of the two taxes makes sense, but almost entirely from a pre-tax perspective. As in, if there is no transportation tax in existence and we want to consider different ways to impose a transportation tax, then you make a good point about why the VMT could be better than the fuel tax. But the history is long since established, and given all the drawbacks of the VMT I think it would be foolish to spend time trying to establish a VMT now. That's true either as an addition to the fuel tax or as a replacement.

I'm guessing what you have in the back of your mind is an interest in achieving higher prices for road transportation in order to reduce greenhouse gases. And you are right that increasing the fuel tax to achieve that goal is extremely difficult politically. It seems a much more likely solution than the VMT is either a cap-and-dividend plan on carbon and/or a feebate program based on vehicle fuel efficiency that is imposed at the time of registration. (For those who don't know... Feebate: a presumably revenue neutral program that charges progressively higher registration fees to vehicles with above-average fuel efficiency and progressively lower fees -- including rebates -- for vehicles that are more efficient. Someone registering a Hummer would thus be subsidizing the Prius owner. Set the upper fee and lower rebate high and low enough, and you get a pretty good incentive for people to shift to efficient vehicles -- all without the government keeping any of it as boogeyman taxes.)

I'm not exactly sure what's being misunderstood here, but something is. The price of gas changes drastically throughout the year. As such, taxing it is more politically volatile than taxing something that doesn't suddenly become a major political issue every August. Imagine a campaign with a gas tax at its heart happening in July: They'd be torn apart.

What's being misunderstood, I guess, is that pace Ezra we're not taxing "the price of gas." Drivers pay a relatively fixed amount year over year in gas tax (based on the volume of gas they buy, not how much that gas costs).

This relatively fixed amount does constitute an input into the cost of driving, along with the spot price of gasoline. People are concerned about their cost of driving, and as a result, any proposal to increase it is politically sticky.

Your proposal, as I now understand it, is to take a relatively fixed amount which now goes on a driver's gas bill, measure it differently, and stick it on an new "miles driven" bill that will be presented to the driver somewhere other than the pump. You assume this will reduce the political cost of increasing said relatively fixed amount. It will not. It will cost a great deal of money, and no one will be fooled. And when the cost of driving goes up, you'll be facing the same political difficulty.

Terrible, terrible idea. Orwellian, costly to implement, rewards gas guzzlers and punishes people who drive fuel efficient cars.

This is nuts. We already have a mileage-based system to tax users based on VMT. It's called the gas tax, or the federal excise tax on motor fuel. Proceeds go into the highway trust fund to pay for, ummm, infrastructure.

It has certain inefficiencies, but the creation of a huge bureaucracy and costly installation of transponders and the additional infrastructure to monitor them -- not to mention the privacy issues -- are not among them.

If someone thinks highway users aren't paying enough -- which they aren't -- let them get behind a hike in the gas tax, say $0.01 per year for x-number of years, perhaps coupled with a percentage component (if someone wants Uncle Sugar to profit from the inevitable increase in gasoline's price).

This isn't rocket science and it isn't broken. We have other fish to fry.

DCr

Car weight and area of road that the vehicle uses should be factors.

Um, we already have a miles-traveled tax. It's called the gas tax. Maybe not perfect, but close enough.

I don't think people have quite put it together yet --

a gasoline tax is a very good approximation to a (miles x weight) tax, since heavier vehicles require more gasoline to travel a mile.

The only exception to the above is a hybrid.

So a "miles traveled" tax is a hybrid tax. Why do we want that?

My goodness -- this is beyond dumb. A GOOPer that the president stuck in the cabinet (for reasons unknown to me) comes up with an economically unsound, personally intrusive, anti-fuel-efficency idea based on his ideological opposition to a gasoline tax and he's not smacked down by the admistration?

Yeesh. It's gonna be a long few years, ain't it?

Say you're a certain big box retailer that depends upon your logistics network to help keep your costs low

Or, to be explicit: you don't pay for square footage of warehouse space to hold inventory, because as much of it as possible is crammed into trucks for just-in-time delivery.

I think the simplest solution is the best: raise the gas tax.

That said, I'm also mindful of Ezra's point, which is that it's a sitting duck for grandstanding pols who want to play faux-populist in the summer driving season: we only need to remember McCain and Clinton proposing their dumb tax holiday, and while Obama seemed to do okay by opposing it as a stunt, the Conventional Wisdom brigade treated it as way out of the mainstream.

The problem here is that there's no real space for the federal government to adopt the equivalent of the UK's vehicle excise duty, which now assesses an annual fee based upon emissions. That's a state-by-state thing in the US, and can create incentives to keep cars registered with out-of-state plates if there's a more amenable assessment scheme in the state next door.

There were proposals in Britain for a pay-per-mile system, but it was a non-starter: you can have video cameras in every street corner, but people don't want telemetric trackers in their cars. (Doing it with trucks is easier, because the technology's already there on a private basis. In fact, fleet vehicles in the US often have that kind of monitoring installed.)

While I am opposed to this for the reasons cited by others above, if the government is hell-bent on tracking miles, why not make it a voluntary tax rebate system where you install the GPS and your rebate varies on the miles you drive. Fewer miles bigger rebate kind of thing.

OMG! Call an exorcist- Michael Steele's hip-hop message is getting to me...

Of course the gas tax is easier, but it is regressive. The only reason you would implement a miles driven is to exclude people, like low income people.

You don't need transponders either. Simply pay the tax when you sell the car (odometer minus zero). You could collect witholding on this, for income groups targeted, through W-4 or 1040.

Bush is no longer in office, you need to think again. There must be a reason to not raise gas taxes, and it is not to tax hybrids or electric cars. Idiots no longer make policy in this country.

A is right.

You don't need transponders. Just tie highway funds to annual vehicle inspection in the states and mandate a certified odometer reading.

You could collect the tax quarterly based on estimates and then make an annual adjustment.

It's a HORRIBLE idea to install transponders. You don't get more accurate reading than the odomete, you lose support left, right, and center due to privacy concerns, and it costs a bunch of money to install the meters. 'Lose, lose, lose' usually isn't a winning proposal.

It's already illegal to tamper with an odometer in most states. Bump up the penalties for that crime and things will work just fine without transponders and GPS or whatever Larry Lightbulb crap wonks think they need to read the miles. Just read the odometer at annual vehicle safety inspections. Safety is good! Hooray!

Get some auto mechanics in the room and ask them the least intrusive way to collect taxes based on miles travelled instead. Just read the odometer. Do it quarterly if necessary but it's a total non-starter if it involves installing GPS in cars and having the government track it.

I think it's a fantastic idea to collect taxes based on miles travelled (or miles X some multiplier based on MPG) but I'd never support anything that tracked your vehicle. No. Freaking. Way.

Wow, what a stupid post. For many of the reasons pointed out above and more.

Any attention given to the VMT should be to point out how silly it is. But if you absolutely must discuss it, please do so intelligently. And please include in your analysis the negative externality of pollution. Thanks.

The transportation mode that does have a stupid tax setup is aviation. Most taxes imposed to fund the Airport and Airways Trust Fund come from the passenger ticket tax, which collects a percentage of the ticket price. Ticket prices have nothing to do with the use of the aviation system by aircraft, so there is no meaningful link between revenue collection and revenue use. There's currently an FAA proposal to move to a user fee set up to replace the ticket tax (which has been stalled in Congress since 2007 as part of the most recent FAA reauthorization legislation), which would charge directly for use of the radar system airspace (the "IFR system"), based on a variety of factors. This would be much more sensible and I expect LaHood will get behind this.

The Department of Really Effing Stupid Ideas by Gutless Politicians called, they want their idea back.

I actually like this idea. The gas tax will become less relevant as a policy tool over time as average mpg improves, and this tax will work consistently to bring down the overall miles people drive. If driving suddenly starts costing closer to what it really should, it may help spur more car-light and transit development, as well as make people think twice about moving to the boonies and commuting for hours by car.

One of the objectives of the Obama administration is to reduce our dependence on foreign oil. Taxing mileage instead of gasoline is totally counterproductive to this objective because it penalizes people who drive fuel efficient cars and removes the penalty on people who drive gas guzzlers. Obama needs to disassociate himself from this stupid Republican idea PDQ before people associate him with it.

Imagine a campaign with a gas tax at its heart happening in July: They'd be torn apart.

In April, on the other hand, a candidate can support a gas tax before the primary is over and go on to win the general election.

Sure, it's not a perfect analogy (opposing tax holiday != supporting tax increase, this wasn't at the heart of the campaign), but I think the point remains valid - you seem to be overestimating the opposition to gas taxes.

They need transponders? Why? You could just get your odometer read when you get your registration updated, then pay it per year.

I like it better than adding to the volatility of gas prices, and it's really no different actually. You pay taxes commensurate with how much you drive either way.

Stupid, stupid, stupid.

100 miles in my 40mpg Smart (chosen to save energy/money) should not cost the same as 100 miles in an 8MPG Hummer. This approach does NOTHING to encourage greater efficiency.

Stupid, stupid, stupid.

What it DOES do is penalize folks who live in exurbia, where housing prices have already plummeted. Now long term, that is actually not a bad thing (cf James Kunstler). But if one of your economic goals is reversing the housing meltdown....

Stupid, stupid, stupid.

Devote all of the creative energy being wasted trying to avoid an explicit carbon tax into SELLING THE CARBON TAX.

And the irrational aversion to fuel price variation? Fix after-tax gas prices, and absorb the variation with the tax if it scares you so much.

Might be the dumbest graph ever. Why plot volatility of gas prices versus miles traveled. A gas tax is not set at a % of total price, which is the volatility shown on the chart. A $0.15 per gallon tax would be a flat line, and would only change as tax amount itself changes. Faaaugh!

I think Ezra has the politics wrong. A miles-travelled tax would be far more politically difficult to install or manipulate than a per-gallon tax we have now.

First of all, with either transponders or odometer tracking, there are a number of new rules that individuals will have to deal with, more auditing that will have to be done, more complications for auto sales. All of those things are annoyances to everyone who drives, constant reminders of the tax (versus the current fuel tax which is basically invisible), and insert many many more incentives and opportunities to cheat on compliance.

Secondly, people feel more in control of the car they drive than the miles they travel. A tax that's part of the price of gas makes it very clear how much I might save by getting a more efficient car. But if I commute 50 miles each way to work every day, a mileage tax gives me no options other than moving or changing jobs. Getting a new car is a *lot* easier than either of those things.

Third, why would politicians not have just as much motivation to clamor for cuts in a VMT when gas prices are high? Do you really think a campaign built around VMT increases would fare any differently than one built around per-gallon increases? That makes no sense to me.

Finally, what do you actually want to do with this tax? Pay for highways? Well, if everyone started buying electric cars, we might have to worry, but until mileage standards go way up, the current tax is not going to suddenly stop raising money. To the extent you want to change behavior, a VMT makes no sense, as has been pointed out many times, unless you are anti-driving, but that goes against your argument about the smooth red line in your graph.

By the way, the graph is non-sensical as well. Gas is taxed per gallon, and gallons consumed will track very nearly identically to the miles travelled line.

One word - Variable.
They want the ability to jack up the rates (tax you more) at their whim. They'll give it a fancy name like "road pricing" or "traffic demand pricing", but once they have the ability to charge you more - they will.

This makes no sense. Can you imagine the cost of just tracking driving habits at all? Unless we work on the honor system. Yea, right.

A fixed-rate gas tax (x cents per gallon) works EXACTLY the same way and has the added benefit of encouraging more fuel efficient cars. And it costs less to implement.

Let us add to this the complexity of figuring out how to collect the tax in the case of used-car transactions: should the new owner figure out tax due and subtract them from the selling price? Or does the aforementioned mechanic come in and certify the odometer and collect the tax on behalf of the feds.
If there is tax forgiveness in those cases, I imagine that there will be lots of used car sales at the end of each quarter. So we have a choice, burden used car transactions or incentivize them?
Somebody else can think about what happens when a vehicle is totalled. There are plenty of vehicles on the road that were previously totalled.

bdbd at 11:34:
. Ticket prices have nothing to do with the use of the aviation system by aircraft, so there is no meaningful link between revenue collection and revenue use. There's currently an FAA proposal to move to a user fee set up to replace the ticket tax (which has been stalled in Congress since 2007 as part of the most recent FAA reauthorization legislation), which would charge directly for use of the radar system airspace (the "IFR system"), based on a variety of factors.

Cranky

millage tax on semi trucks? who deliver, you know, everything to stores.

So unless you don't plan on buying something.. doubt it would raise the price of anything.

Whoa. Hello, people...WAKE UP. The government tracking you WHEREVER you go via obligatory GPS?

Can you say "POLICE STATE?" People who can't the bigger agenda here deserved to be chipped NOW.

Wake UP, sheeple.