There has been a lot of discussion lately about increasing the national gas tax. In fact, a proposal to increase the tax, which currently stands at 19 cents per gallon, has been touted as recently as last week. The National Surface Transportation Infrastructure Financing Commission (NSTIFC) has reported that the current infrastructure is dated and needs significant improvements – all of which will cost money that the Treasury doesn’t have.
The NSTIFC has suggested a 10 cent per gallon increase in the federal gas tax to raise revenue – a measure that may actually pass now that gasoline prices have tumbled back down after reaching historic highs in 2008. Time may also be on their side. Congress has not raised the federal gas tax since 1993, more than 15 years ago.
If the feds raise the national gas tax, what will that mean for the states? Will they follow suit? I’m betting yes – with a twist.
Not all of the states are planning a traditional gas tax increase. Oregon leads the nation in a quest for a different kind of tax, a mileage tax. The mileage tax is sort of consumption tax on roads. The idea is that drivers would be taxed on how far they drive rather than how much gas is consumed. Mileage would be calculated using GPS installed in newer cars (older cars would continue to be taxed using the gas tax).
Why change? Almost everyone agrees that the bridges and roads need work. And as cars become more fuel-efficient (we hope) and the price of gas stabilizes (we hope), this means that revenues from the gas tax will not be enough. In other words, those who drive the most miles – and thus use the roads the most – are not necessarily paying the most. Some feel this needs to change.
Oregon isn’t alone. Rhode Island and Idaho are considering a similar tax though based on a self-reporting system rather than the GPS. Chatter about a mileage-based tax has also spread through Colorado, Florida, Minnesota, North Carolina and Pennsylvania.
Congress has given this kind of system some thought, too, though we are clearly years away from seeing anything like this on the national scene.
So is a mileage tax the solution to our infrastructure woes? Tests have gone well in Oregoon. But critics are concerned about potential privacy issues in having government track mileage – and the bigger concern that the tax might eliminate one of the financial incentives for buying a fuel efficient vehicles (though clearly, the gas savings outside of the tax would still be considerable).
What do you think? Keep the gas tax or ditch it for the mileage tax? And if you would keep the gas tax, would you support an increase at the pump if it meant better roads? Any other suggestions?
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