Mileage Taxes vs. Fuel Taxes

As vehicles improve in fuel efficiency, as people drive less, and as politicians don’t have the will to increase fuel taxes, funds to maintain and improve transportation infrastructures are decreasing, and governments are looking for new ways to raise revenue.

An article in the Los Angeles Times looks at various ideas that are being proposed in the United States to tackle road funding. The central alternative to the current fuel tax system is to charge drivers based on the number of miles they travel, rather than the amount fuel they consume — and there is now technology in place that can easily allow that to happen. Black boxes that can be installed in vehicles are able to track milage and transmit that information to government bodies who can then assess a tax based on the number of miles driven.

Congress has not been able to come to any agreement on such a system so far for federal funding, but there are states and local government that have been able to take steps in the direction of a mileage tax. From the LA Times article:

Several states and cities are nonetheless moving ahead on their own. The most eager is Oregon, which is enlisting 5,000 drivers in the country’s biggest experiment. Those drivers will soon pay the mileage fees instead of gas taxes to the state. Nevada has already completed a pilot. New York City is looking into one. Illinois is trying it on a limited basis with trucks. And the I-95 Coalition, which includes 17 state transportation departments along the Eastern Seaboard (including Maryland, Pennsylvania, Virginia and Florida), is studying how they could go about implementing the change.

Organizations such as the American Civil Liberties Union are concerned that a mileage tax could lead to Big Brother-type surveillance with government agencies able to know where people go, and how fast they drive. Also, people who live in rural areas are concerned that they would be unfairly disadvantaged when they have to drive long distances than urban residents by necessity. Drivers of fuel efficient vehicles might also feel aggrieved if their investment in fuel economy turned out to be more expensive than they had budgeted for if they have to pay additional taxes.

If we contemplate a future when LENR could provide more of the power we need for everyday use — including for transportation (e.g. electricty for electric vehicles) we will likely see an increasing push for a new way of funding highway systems. I suppose there could be taxes levied for alternative energy production (including LENR), or maybe a higher rates of sales or income taxes. But any time new taxes are proposed there are going to be contentious debates — and in today’s political climate in the US it is hard to see a consensus being formed.

I think this is a debate that will only grow more in intensity as technological advances reduce the need for gasoline and diesel in our vehicles — but with some of the intense opposition to the idea of mileage tax it’s hard to predict how it will be resolved.

  • Omega Z

    Well, We all have to pay for the roads if we use them.
    Mileage & weight would be the fairest plan.

    But here’s the real deal. Why do they need all the other data.
    Why not a simple mileage report for said vehicle & a deduction from a pay pal or pay pass system. Every so many miles or weekly. No yearly Lump sums. That would be very problematic. Many people wouldn’t have that lump sum & lose their jobs.

    And they don’t need to know where or when you went somewhere. That is just going to far. This tracking everyone 24/7 is getting Extreme.

    I know the common argument from many. If your not doing anything wrong, then what do you have to hide.

    Well, What if the Government follows tends & don’t like the way you live. They can pass a new law.

    Or a Trend- Millions of people are going out to eat 4 days a week. They have to much discretionary spending. This means we can/should raise their taxes more & put an end to this eating out to often.

    The list could become infinite.
    You can see the silly/stupid crap people complain about everyday in the news. Do we really want to feed these people more info to create more stupid regulations. These people should get a life & quit trying to run everyone Else’s.

  • Christina

    Oh, the overpopulation politics are unwarranted. Certainly, we are intelligent enough to farm indoors, get a bigger yield and feed 90 billion people (yes, billion). There was an nonpolitical study done in the 90’s that showed that that’s how many people this planet can support. It was put out by a Catholic researcher, but I don’t remember the name of it.

    I assume that building cities underground, hydroponics in humongous buildings, and returning the world above ground to the wild would help!

    In the sixties we thought we’d be toast by now, but we’re thriving compared to starving, lack of water, and nuclear fallout. God gave us brains that learn; we can fix the future: All we need to do is follow God’s laws.

    • bachcole

      Overpopulations worries are unnecessary:

      Set both axises to “children per woman (total fertility)” and click play and what the world’s population plateau out at 10 billion.

  • US_Citizen71

    Very easy fix. Increase the cost of license plates and annual vehicle registration to cover the costs associated with personal/commercial non-long haul vehicles. Increase the tariffs at the weigh stations for big rigs to cover the road damage caused by long haul vehicles. Done. All without any type of blackbox.

  • Christina

    The Fair Tax would be paid only when one bought a new item whether it be food, automobile, or house. Everyone would get a check, I believe it was $500, in the mail every month to replace the food taxes. If you sell something that’s been used, you pay no taxes.

    I wrote to Barbara Feinstein and suggested that this would be a good tax because many nonpolitical economists have studied it and said that it would work. Feinstein replied that it wouldn’t garner enough money to replace present taxes and would reduce the things the U.S. Government can do. I emailed her again and said that that was the point!

    But the point of the people who believe in the Fair Tax is that it would pay the governments to do their most important jobs.

    Until this country understands that socialism only makes a country poorer we will slide into third world status. Our people will never recognize this fact until they get their politics out of their sex organs and follow nature which says that you don’t kill your own offspring or prevent them from being conceived. It has always been that when a country goes against God and his natural laws, it eventually ceases to exist. People do not have the right to bring in laws that go against nature and God or to vote for this cause in sympathy because it’s just not Christianity, meaning it’s not doing what Jesus wants. It’s not my opinion, it’s what Christianity teaches; all our problems would go away if as a country we followed Jesus. Oh, there are different opinions on that, eh? The Catholic Church has always interpreted the Bible (the Catholic Church put the New Testament together) consistently and so that there were no unanswered questions–a seamless garment.

    If the United States, her states, counties, and cities, follow God’s law, the country will be better off than it is now.

    Have a good day and may God bless you.

    • bachcole

      I could swear that Christina is fishing for venomous criticism.

      I like the Fair Tax.

      It is Barbara Boxer and Diane Feinstein, not Barbara Feinstein.

      People need limits. With too many limits, like in fascism, life isn’t worth much. With too few limits, like in hippy socialism, everything goes to hell in chaos.

  • Bernie Koppenhofer

    A fair tax would be a combination weight and miles driven. Of course in our system where money votes, trucking firms and large corporations with large road transportation expenses will write the law.

    • Rob Lewis

      A fuel tax gets you pretty close to combining weight and miles driven.

      • Fortyniner

        And is simple to implement, ‘pay as you go’ so no nasty surprises, doesn’t involve any new hardware, and does not require electronic surveillance.

        As Atanguy has noted, apart from snoopers looking to justify vehicle tracking, just about the only reason for moving to such systems would be so that drivers of electric vehicles can be gouged even though taxes have already been paid on the electricity they consume. If the situation in the US and other countries is anything like the one here (UK) its been a long time since more than a tiny fraction of vehicle revenues went back into road construction and maintenance.

    • Omega Z


      In a sense, Fuel tax on Truckers is kind of silly. They are on the road to transport our needs. We’d get pretty hungry real fast if they stopped all the trucks.

      On the Other hand, It is ALL pasted on in the cost of what they transport. It is a business expense. In that sense, the products sold include the price of transport paid for by those who use the products. So in that respect, it would be fair. As long as it’s applied across the transport business.

      In simple terms, When I buy the product, I’ve paid for the damage to the road due to it’s transport.

      I agree with You & Rob that the tax should be based on mileage & weight as both effect the damage done.

      I figure there will be a transition period, but Eventually it should all be based on mileage & weight. Any who use the roads should pay for them.
      I also think it should be pay as you go. Maybe like a Pay Pal account. Kind of like we do every time we purchase gas. Or every so many miles or trip. The Downside for Government is people will quickly become aware of what it costs them. Priced into the price of Gas makes it deceptive. Blame the price on Big Oil. And people may start questioning the cost of road building/repair. People may become aware of how bad Graft/bribes are within the Road building business.

      Having a Large Lump Sum piled on to license plates or annually paid would create major problem for many people. I can see people now losing their jobs because they can’t come up with the Lump Sum. No way to get to work. Truth is many people can’t manage money that well.

  • Job001

    Vehicle loaded weight is more important than miles to road damage, and privacy is important to some and not to others, and nobody likes taxes. Since the trucking industry will hire the best lobbyists, government will choose corrupt and expedient, i.e. tax EV’s and hybrids. At least it’s predictable dumb.

  • atanguy

    In the US,It’s pretty clear to me that BIG OIL is behind this propaganda,they are worry that consumers are starting to switch to electric cars and, if we are right, soon to LENR, that will have a big impact on lowering our addiction to oil. Government will make tons of money just by stopping importing oil and gas from middle east,and should have enough funds to fix roads and infrastructures if needed. Do not forget,the biggest oil consumer in the US is the US military…

  • Private Citizen

    My state has over 40 cents per gallon gas tax. In addition there are registration fees, licensing fees, smog fees, road tolls, parking fees, plus huge transportation outlays and policing costs paid out of the general fund. One can only guess at the actual tax per mile, but it is the equivalent of some goon stopping you every mile or so for a shakedown toll.

    All of this for the privilege of driving a petroleum burning machine over petroleum coated roads.

    The oil companies will not go gentle into that dark night of obsolescence; and now a disincentive to escape the oil economy under the excuse of preserving the govt’s ability to wet their beak on your every move.

    The money we have put into roads and cars would have bought us a sweet internet of matter transportation, perhaps programmable pods on raised electric rails.

    My guess is we will get BOTH gas taxes and a Big Brother Box tax. That’s how they roll. Then, when the fiat economy finally collapses and austerity hits, they will privatize the most profitable roads to the toll trolls.

    • cy

      I wihsh petol taxes were that low here in sweden, at the moment (converted to gallons and us$) we pay $4.63 taxes per gallon, gas prices are just over $8 per gallon…

      • Iggy Dalrymple

        Libs absolutely drool over your $8/gal fuel cost.

        • Rob Lewis

          Yes, it certainly is “liberal” to expect people to pay the true costs of the things they do. Oh, wait, isn’t “getting prices right” a conservative, “free market” idea?

          • Iggy Dalrymple

            I rest my case.

            • Rob Lewis

              So you agree that the true cost of gasoline, including all externalities, is maybe somewhere around $8/gallon? In that case we have no disagreement.

              • Iggy Dalrymple

                I agree that the cost of gasoline is whatever price the market sets. To that market price, the govt adds whatever tax it thinks it can extract. The more liberal the govt, the higher the taxes.

      • Fortyniner

        Prices for fuel including taxes range from €1.33/l (Luxembourg) to €1.93/l (Norway). UK and Sweden are joint third after Italy, at €1.6/l.

        For comparison, fuel in the US averaged €0.65/l for about the same date – about 37% of the European average.

    • Jimr

      I live in Virginia, U.S. And they are attempting an additional tax for electric/hybrids. A week ago I observed the dept of transportation painting the lines on side of the road. A paint truck with two occupants led, followed by a pickup truck with flashing light, than a panel truck followed by two dump trucks with large arrows to direct traffic to adjacent lane. No wonder costs are high.

    • Rob Lewis

      There have been a number of attempts to calculate the true cost of driving private automobiles, including everything: police, ambulances, environmental damage, time lost stuck in traffic, highway construction, etc. etc.

      Results vary, but they average out to being equivalent to a gas tax of around $5 per gallon. I wonder how we’d change our habits if we paid these costs directly, instead of hiding them in other taxes and subsidies (or simply ignoring them).

  • Cranwell

    The more I read, is the more I am convinced that the United States is become a third world backwater country. No wonder so many people are leaving for other countries and the US economy is in steep decline. Only make essential new roads, use prisoners to maintain the existing road network, find new materials to make roads and infrastructure stronger. How can suffering people pay more tax. It must be to the detriment of the state. “If a free society cannot help the many who are poor, it cannot save the few who are rich.”. Figure it out.

    If a free society cannot help the many who are poor, it cannot save the few who are rich.

    • Rob Lewis

      You do know that U.S. taxes are among the lowest in the industrialized world, right?

      • Iggy Dalrymple

        And you’re really pissed, right?

        • Rob Lewis

          I’m on to you now. You just like to pick fights. Sorry, not going to play. I was simply pointing out that people who gripe about astronomical U.S. taxes don’t really grasp the big picture. Bye now.

          • Iggy Dalrymple

            Bye, Great Grasper of The Big Picture.

    • Iggy Dalrymple

      So your pals are leaving the US to help the poor somewhere else? Where did you go?

  • Warthog

    There is no need for a “black box” in order to implement a mileage tax. Every car already has an odometer that measures mileage. All that is needed is a law for each car owner to send a post-card annually (semi-annually, quarterly) to the appropriate revenue agency with the current mileage figure and a check. Once a year, each car’s odometer to be inspected by a gov’t rep (at oil change, pollution equipment inspection, etc.).

    The supposed need for a “black box” to do this is simply camouflage for yet another “track all citizens all the time” technology push.

    • Fortyniner
    • Asterix

      That would work if the Federal government assumed responsibility for collecting all road taxes, redistributing them accordingly to the states. But as it stands now, maintenance is the responsibility of each state and subject to revenues raised by that state.

      • Warthog

        Not a problem at all. Although “pollution control equipment” on vehicles is mandated by federal regulations, the states are the ones who actually make the inspections and collect the fees. Still no need for a “black box”.

        • Asterix

          There’s a heckuva lot of difference in the expenditure to perform inspections (states vary widely in that respect; I’ve never had an emissions inspection in my state) and building bridges and roads. Right now, my state and an adjoining one are quibbling over how an interstate highway bridge is to be financed over a major river. Both agree that it’s necessary, but how to pay for it is a sore topic of debate.

  • Fortyniner

    Similar proposals have been made here (UK) as well. Such taxes have obvious problems, such as a failure to discriminate between low and high mileage vehicles, or to detect high usage, low output conditions such as traffic jams or aggressive high-acceleration driving. As the ostensible purpose of such taxes is to put downward pressure on fuel usage (justification: the ‘polluter’ pays) then putting the taxes directly on fuel is the only logical way to go about this. That way tax is paid automatically in direct proportion to fuel used, regardless of the reasons for this, and implementation does not involve the use of any additional equipment.

    There seem to be only a couple of reasons for proposing mileage taxes: (1) to prepare the way for taxing non-fossil fueled vehicles by usage, or (2) to find justification for placing a tracking device in all cars and other vehicles as a part of the ever-ballooning ‘surveillance state’. As the former could be implemented without involving IC vehicles, that makes the second option the most likely real purpose driving such proposals.

    P.S. Posting as a ‘guest’ as I am unable to log in using Disqus (again).

    • Rob Lewis

      The general idea is to tax things we want less of, and subsidize things we want more of. Thus, the fuel tax is perfectly reasonable: gas guzzlers (which tend to be heavy and thus tear up the roads more, and take up more space, and generate more CO2) should pay more. The problem of course comes with electric cars, which are “free riders” since they don’t use fuel. Rather than track their miles driven, it would be simple to track the amount of electricity they use, and tax that. As with the fuel tax, this would likewise penalize “electricity guzzlers”.

      • bachcole

        We need all of the CO2 that we can get. More CO2 means more plant growth. (:->)

        • Iggy Dalrymple

          Rob thinks trees are for hugging, not growing.

  • Asterix

    I did get to see a TV segment on the Oregon thing. The problem is that states pay to maintain roads, but there are many who do not live in the state who use the roads and are exempt (there’s a whole army of commuters who live in Vancouver, WA for example and work in the Portland, OR metro area.

    Similarly, there are those who live in Oregon, but drive quite a bit outside of the state.

    The answer, of course, is to install devices that only count mileage inside the state, but then the mileage gizmo would have to be aware of the car’s location (inside or outside the state) to provide meaningful information. The fear is that this information can be used to track one’s movements.

    It’s interesting in a way. My electric utility has notified me that it’s raising rates next year, but not because the wholesale price of electricity has gone up, but rather because people are using less of it and the support infrastructure has a recurring cost factored into the consumer price.

  • Iggy Dalrymple

    Next they’ll tax virtual mileage for armchair travelers and cyber-commuters.
    The mob had it figured all along. Going underground is the ticket.