Buttigieg: How about we tax you for every mile you drive?

I was reliably informed that the middle class wouldn’t be taxed under this administration.

But that’s my fault for not reading the fine print. The middle class won’t be taxed on income, they said. No one ruled out dumping a highly regressive new tax on drivers.

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That post-pandemic road trip you’re planning may turn out to be more expensive than you thought.

Varad Mehta previews the GOP’s 2022 campaign slogan: Democrats want to tax you for driving. Tough message for Dems with an electorate that’s champing at the bit after a year in isolation to travel again.

Conservatives and progressives have already united on one obvious critique: If you’re going to tax mileage, by definition the people with a longer commute will end up paying more. And not all of those people will be wealthy white-collar types traveling from their bedroom communities into the city in the mornings. Plenty of poor people, urban and rural, have to cover extra distance to and from work because they can’t afford to live any closer.

Although I imagine Mayor Pete — sorry, Secretary Pete — would have an answer to that. The gas tax, which a “vehicle-miles traveled” (VMT) tax would replace, poses the same problem. You can mitigate or eliminate the gas tax you pay by driving a hybrid or an electric vehicle, respectively, but most people who commute longer distances will end up buying more gas and thus pay more tax — especially if they’re poor and unable to afford a newer, more fuel-efficient car. The new tax may be regressive but so is the one it’s replacing.

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Another obvious critique: Privacy. If the feds are going to tax you on the number of miles you travel, they need to know how many miles you travel. How will they find out? For newer vehicles, the solution may be high-tech — and intrusive:

Advocates say privacy concerns are addressable. For example, Oregon set limits to the recording data in their pilot programs, which included: units programmed to not track exact map location, units programmed to aggregate travel during particular periods versus exact times, limited who has access to the data, and have the data destroyed 30 days after it is required for payment processing or dispute resolution.

The largest problem with a VMT is cost. From a tax collection standpoint, the current gas taxes are simple to administer at the pump and can be adjusted using existing mechanisms. The VMT tax would require installing new technology in all personal and commercial cars and trucks to track distance traveled, would require every vehicle owner to periodically report distance tax and create a costly new bureaucracy that would have to audit these reports. The added bureaucracy alone could eat up any gains in tax revenue.

For older vehicles, an odometer check at the annual inspection could suffice in theory. You trust Americans not to manipulate their odometers in the name of saving a buck, don’t you?

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There are other objections. Greens don’t like the VMT because it penalizes electric cars indirectly. Right now the gas tax is an incentive on car-buyers to go electric; tax vehicles by the mile instead and that incentive disappears, making gas-guzzlers relatively more attractive. The tax also doesn’t account for weight differences in vehicles. A heavy pick-up truck and a lightweight sports car that travel the same number of miles presumably pay the same tax under a VMT even though one is inflicting more wear and tear on the roads. (Whether they’d pay the same under a gas tax would depend on fuel-efficiency, although the heavier vehicle will normally need more fuel.) And of course there’s always the chance that our revenue-hungry government will shift from supporting a VMT in lieu of a gas tax to supporting a VMT *in addition to* a gas tax in time.

Lotta questions here and a reeeeally difficult sell to the public. Although, for what it’s worth, this WaPo widget suggests that the amount of tax you’d pay under a VMT would be only marginally greater than what you’d pay under a gas tax. Every dollar counts when you’re poor, of course, but for a middle-class person driving 15,000 miles per year in a car that gets 30 miles per gallon, the annual difference between a VMT and a gas tax is … 40 bucks. For someone driving an all-electric vehicle, 15,000 miles would mean paying $132 more per year. But if you drive a gas-guzzler, you actually come out ahead. The owner of a vehicle that gets just 18 miles to the gallon would pay $21.33 less under a VMT over 15,000 miles than they would under a gas tax. That’s exactly what environmentalists dislike about the idea. If we’re taxing by the mile, your penalty for ignoring fuel-efficiency when you buy a car will go down, not up.

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Ed Morrissey 12:40 PM | December 16, 2024
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