Tax Cars by the Mile? Who Came Up with THAT Hair-Brained Scheme?

The VMT (vehicle miles traveled) tax is back!

The mileage tax rears its ugly head again. The Hill reports the plan is a part of the Orwellian “Transportation Opportunities Act,” although the White House says the bill is not its idea, with “only an early draft that was not formally circulated within the administration.”

The undated 499-page draft was obtained by Transportation Weekly.

Oregon floated this nutty idea for a mileage tax back in 2004 based on the prospect that more fuel-efficient cars were going to cost the state loss of gas tax income. The plan, to be tested in March or April 2005 (and expanded to 300 test vehicles in October or November), was to install two devices — a GPS device to determine when the car was within Oregon’s borders and a second device to count how many miles were driven — in every new car registered in the state.

The counter — obviously a “smart” counter — would then “transmit the number of miles driven in Oregon to a receiver on gasoline pumps whenever drivers stop to fill up.”

Instead of paying a gas tax, automobile owners would have a mileage tax added to their fuel bill. (Knowing how the government works, you just know it would have been an add-on tax, not a substitute tax).

In February 2009, Obama’s Transportation Secretary, Ray LaHood, proposed a national mileage tax barely 30 days after the inauguration.

POTUS reportedly said the plan “is not and will not be the policy of the Obama administration.”

What’s behind this renewed interest in a mileage tax? An effort to appease American drivers thoroughly ticked off by gasoline prices, perhaps? But how does this help urban dwellers who do not own vehicles but still see the effect of high gas prices at the grocery store and everywhere else around town — after all, goods and services don’t arrive without the cost of transportation added in.

How does this help consumers whose gasoline taxes already go to city, county, and state governments? How does the federal government plan to handle that, especially when it would depend on “trust” — a commodity in shorter supply than cheap gasoline these days?

Another point was made by a forum commenter who writes: “Now Obozo wants to tax cars by the mile. Just another slap to anyone that gets in their car and goes to work. No big deal for the deadbeats that stay home and wait for thier govt check.”

Where does it end? North Carolina, for example, wants to tax the mileage of electric cars — seems the state is being denied what it calls its fair share of the gas tax.

In Oregon, John Christian, chairman of the Oregon Electric Vehicle Association, wants a larger percentage of non-polluting plug-in and hybrid vehicles on the road first — say somewhere between 25 and 50 percent.

Also, that Oregon pilot mileage tax project failed due to privacy concerns involving the GPS tracking. California and New York considered a mileage tax in 2004 but also ran into a roadblock with the GPS requirement. (Liberals really hate that Big Brother intrusion thingy — unless they are the ones doing it.)

But Andrew Samwick at the Capital Gains and Games blog has a solution for all of these problems:

The appropriate tax instrument to make up for declining or inadequate gas tax revenues is … a higher gas tax rate. Compared to a higher gas tax rate, a tax on miles driven ignores the amount of fuel used to drive those miles. Highway travel is taxed the same as city travel. Gas guzzlers are taxed the same as hybrids. Neither change makes any sense from an environmental perspective. Nor is it necessary to raise issues of privacy involved in collecting a tax on miles driven in the ways suggested in the article by monitoring the history of the locations of the car (as opposed to an annual fee based on an odometer reading collected at a state inspection).

Shhh!! Don’t let Ray LaHood hear you say that.