Gas or Mileage Tax?

Drivers frequently complain about the condition of the roads.  In California as in most of the US, a lot of the maintenance is paid for with revenues from a tax on gasoline.  In the last ten years, the amount of gasoline sold in the state has dropped by around 1.5 billion gallons, and the corresponding tax revenue has dropped by around $2 billion dollars.  During this period the state population has grown.

There are several causes for this decline:

  1. As gas prices have risen, people are choosing to drive ICE cars with better MPG.
  2. In certain areas within California, more people are commuting by public transportation or corporate shuttle busses.
  3. Electric cars are driven on these roads but do not pay any gas tax.

State officials are now considering substituting the gas tax with a fee for each mile motorists drive.

Reporting miles driven within a given state brings up a number of issues.  With today’s technology, the government could track your cars movements through GPS.  But with very valid concerns, many people would not want their every move reported to a government agency.  I recommend Glenn Greenwald’s book “No Place to Hide:  Edward Snowden, the NSA and the US Surveillance State” if you want to learn more about the current level of surveillance. Without GPS tracking, collecting accurate mileage data within one state would be somewhat challenging.  I don’t routinely have any idea how many miles I drive within California in any given year.

California has always lead the way on environmental issues.  We have an easy to obtain $2,500 state tax credit on the purchase of an electric car.  Also, we have special stickers to drive in the car pool lane without any passengers.  So encouraging folks to buy electric cars and high mileage vehicles has been great for our air quality and helping reduce green house gases.  California wants to continue to encourage not discourage these vehicles.

California has more than 100,000 electric cars out of the 23 million cars on the road, which is less than 1% of the cars currently registered.  In 2013, 3% of the new car sales in California were electric.

Perhaps there are other methods to maintain enough funds for road maintenance. The gas tax could be increased.  In my immediate neighborhood, a lot of the road maintenance is paid for by new construction and remodeling.  I live in an area where homes are routinely torn down and others are extensively remodeled.  The justification of this tax is that all these heavy trucks used during the construction process deteriorate the local roads.  The taxes from these construction projects provide a significant amount of money into the local coffers and the roads are subsequently in good condition.

California officials do not expect any short term change to the taxation methods.

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2 thoughts on “Gas or Mileage Tax?

  1. I’m not sure how they’re going to enforce a per-mile driven tax but it would be more fair to have an annual levy by gross vehicle weight on a sliding scale.

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