White House Shoots Down LaHood Transit Tax Idea

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I am on my soap box again hoping somebody will listen. I happen to be a systems engineer and have been analyzing mileage-based tax collection mechanisms as part of my job for some time. Unfortunately, many politicians--and engineers for that matter--think that technology is cool. Therefore, more technology is cooler. This assertion could not be farther from the truth.

Mileage tracking systems that rely on in-vehicle devices and a digital communication infrastructure are not only unnecessarily complex, but are also more costly, unreliable, and can be used to invade privacy. The Oregon report does a poor job analyzing its results and is obviously biased in favor of the proposed solution. Someone simply wants to make money at the taxpayers’ expense by implementing an overly-complex and unnecessary solution.

There are a couple of excellent alternatives. I think a combination of the two will provide the most benefit:

The first option is a nation-wide standard gas tax similar to a sales tax instead of our current fixed value. Something around 30% at current gas prices equates to a few cents more than the average flat rate gas tax. A proportional tax will help to moderate supply and demand swings as well as increase tax revenues in the near-term and continue to provide an incentive to purchase more efficient vehicles, ride-share, or use alternative transportation. The infrastructure to collect this tax exists at the pump and will cost very little to implement.

The second option is to record the odometer of a vehicle during a regular registration interval. Many states have annual or biennial inspections and this task could easily be accomplished at that time. Some states might need to add a few job positions. Job creation is exactly what we need right now and the additional mileage-based tax revenue could easily pay for the new staff. Again, the infrastructure needed to collect a mileage-based tax exists and would cost very little implement without violating privacy.

The upside to determining mileage-based tax during vehicle registration is that you would have a single receipt with a tax on it that would qualify as an itemized deduction on your federal taxes. This is much better than calculating your deductible gas tax from a years-worth of pump receipts.

It has been pointed out that for biennial registration an estimated tax would need to be used. As United States citizens with jobs, we pay estimated taxes with every paycheck we receive and either pay more tax or receive a refund when we file our tax returns on April 15 each year. The mileage-based tax would be no different and could be adjusted as needed.

A combination of the two stated approaches will likely achieve the most success. As we transition to greener technologies, each option can be adjusted to keep infrastructure tax revenues steady while maintaining the free market and rewarding greener choices without compromising personal privacy and liberties.

Bryan of MO @ Feb 21, 2009 22:33:43 PM

Gas Tax by miles driven

Looking at this from the outside (Englishman in China), it looks as though you have some very smart people trying to think up solutions to America's problems (in this case poor infrastructure that needs fixing and finding a fair way to pay for it), and I give them credit for thinking of ingenious solutions like weight of vehicle times no of miles driven... but, as is common with so many academics, they fail to see the wood for the trees. The cost of installing a GPS system in each car would be enormous and intrusive and also they miss the fact that the average American believes more strongly in incentivising people to use more fuel efficient cars than incentivising people to drive less. Thank goodness the Obama administration has (at this stage of their leadership) the clarity of vision to throw these ideas out before they hit first base.

Best of luck to all you Americans enduring what looks like to be a long period of tough times ahead.

Charlie Wilson @ Feb 21, 2009 04:49:53 AM

Is this Guy Drunk when he speaks or was he picked up after Merrill went defunct

These Are the best thinkers we can come up with.

1. I'll never believe the goverment will eliminate the Gas tax after implememting this nex tax

2. this doesn't affect just a car owner, it affects any and all vehicles from the local delivery boy to UPS so across the board every thing we consumer and use will go up, including Utilies Ins hort you'll be payingmore and paying for every tax free item by businesses based on a delivery stops for a six pack of soda to the newspaper you read.

3. is this short fall really there or is it away for goverment to move more burden to the people directly in order to open up more tax waste and pay more socialized programs.

I thought Taxes came about to Pay for these Highway and put the people back to work FDR hence the IRS

4. I don't like the Idea of my Insurance Company let Alone the Goverment infringing on My liberties by always riding on my Dashboard hmm why would they need a warrant it's already there

oh and does this mean less Highway cops because they gotcha on Satelite now ! the infringmants are endless

The whitehouse shouldn't have shot just his plan down but sent him Packing as well.

ash of DC @ Feb 20, 2009 21:43:07 PM