Tax Per Mile Driven to Fund Highway SystemTax Professionals' Resource
October 30, 2013 — 1,575 views
American citizens have been financing the maintenance and construction of highways for all these years through taxes paid on gas purchase. Soon though, the situation will change and people might have to pay taxes depending on their mileage driven. The Los Angeles Times published a recent report about the possible introduction of little black boxes that would be installed next to car dashboards. These boxes would keep track of how far an individual drives and then supply the government with that information.
With the current major issue being about the mass collection of phone and Internet usage records by the NSA, there is no telling how the public would react to the government getting detailed information about their driving habits. In the meantime, there is a mix of reactions and opinions amongst the members of Congress as regards the approach to the issue.
Some States in Favor of the Program
The mileage-based user fee program is favored by some states, with many of them looking for ways to implement it within the next 10 years. In fact, states like Illinois, Nevada, and Oregon have either already completed, or are planning to launch a test program using the black box mileage monitors. The information recorded by these boxes would then show up in the tax bills that citizens receive.
Better Gas Mileage and the Tax-Per-Mileage Program
According to the Los Angeles Times, the reason behind this program is the shortage of funds in the Highway Trust Fund. While the Fund gets its money when drivers pay taxes for their gas purchases, cars with better gas mileage are resulting in fewer gas purchases. This also means that the Fund does not get as much money as it used to. If this is the case, wouldn't it be a better move to raise the gas taxes to a few cents?
Currently, Americans have to pay 18.4 cents in taxes for every gallon of gas they purchase. This rate has remained the same for at least two decades, so politicians are not so keen on breaking this streak. The Southern California Association of Governments' executive director, Hasan Ikhrata stated that the driving tax is a necessity for the nation and not a matter of choice.
However, there are a number of people objecting to the use of these black boxes. In a MacClatchy Newspapers column, University of Michigan's economic professor, Mark Perry wrote that this program would force us to give up our privacy. Some critics have suggested an easy solution – raising gas taxes and implementing an annual or one-time levy for those who drive hybrids and high-mileage cars.