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With more fuel efficient vehicles, the road services nationwide anticipate that they will soon not be collecting enought taxes to cover construction and maintenance.  (Source: The New York Times)

The solution, according to some, is to replace at-the-pump gas taxes with a mileage road tax. A House-appointed panel of experts has unanimously suggested such a tax be installed in 11 years, in the year 2020.  (Source: ForeignPolicy)
Prospective taxation changes look to catch taxes up to fuel efficiency gains

Fuel efficiencies have been steadily on the rise and will soon be raised substantially by new CAFE rules, which mandate that certain vehicle classes meet certain fuel economy levels. However, consumers tend to travel further in fuel efficient cars than they do in less efficient models.  This means that the roads experience more wear and tear.  Furthermore, the extra travel increases road congestion and will like necessitate new road construction.

Currently consumers pay an at-the-pump tax on gasoline to cover such expenses.  However, as cars increasingly cover more mileage on less gas, these taxes likely won't be able to keep up with the expenses. 

One solution is to raise the gas taxes -- but this is something consumers don't like, and many argue it is unfair to certain vehicle classes like heavy trucks.  An alternative that is becoming increasingly popular is the idea of a per-mile road tax.  Such a scenario would see the government monitor drivers' every movement via GPS to check how many miles they were driving and tax them appropriately.

A House-appointed 15-member National Surface Transportation Infrastructure Financing Commission just reached a unanimous decision that a mileage tax was the "best path forward".  States Robert Atkinson, Ph.D., the chairperson of the Commission, "If you’re committed to the system being improved then it was a no-brainer."

The Commission suggested 2020 as the date to phase out gas taxes and install a mileage tax.  Their current plan is to replace an 18.5 cents a gallon pump tax with a 1 to 2 cents per mile tax for cars and light trucks.  For fuel efficient cars like the Toyota Prius or the Ford Fusion Hybrid, this has the potential to at least triple taxes.

Oregon has already been field testing such a road tax since 2007.  And groundwork laid out by the University of Iowa’s Public Policy Center a decade ago provides a solid basis for how such a tax scheme can be ideally carried out.  The University of Iowa just received a $16M USD government grant to carry out road tests with 2,700 vehicles in six states.  The GPS-equipped vehicles will send data to the University "billing center" which will generate simulated "bills".

The tax would likely please owners of less fuel efficient vehicles like older cars or trucks.  However, it would likely especially irritate owners of the upcoming generation of electric vehicles, which currently will pay no fuel tax if they operate only on plug power.  Pete Rahn, director of the Missouri Department of Transportation complains, "The Chevrolet Volt won’t pay a penny of fuel tax."





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