We hate the gas tax, but would we change?

A month into the job, Transportation Secretary Ray LaHood is floating a trial balloon. How about taxing motorists on how many miles they drive rather than on how many gallons of fuel they burn?

It’s a fresh idea, at least for Americans. It has been debated for years in Europe though it is not in significant use there except for commercial trucks. In the U.S., three states are discussing it and the U.S. Congress is hearing proposals to fund trial programs.

The basic idea is to base the taxes needed to build and maintain roads on actual use of those roads instead of a flat per-gallon fee on fuel.

LaHood is not doing this casually. Our gas-tax system is failing. As vehicles get more fuel efficient, Americans are buying less fuel but driving more miles and wearing out the roads faster. Congress has to kick an extra $8 billion a year into the national road fund to make up for the shortfall. LaHood opposes raising the federal fuel tax during a recession.

So what are the options for making road maintenance self-funding?

LaHood, one of two Republicans in President Obama’s cabinet, notes two other options: more toll roads and more government-private business cooperation (which is a polite phrase for “toll road’).

Now that may be an orator’s trick to make a proposal sound more reasonable – kind of, “I suggest the gruel, but you could choose burned peanut shells or ground glass.”

But let’s cut LaHood some slack. Nobody wants to explore new tax methods.

We all hate fuel taxes. We hate toll roads. We hate per-mile taxes.

Which do we hate least?

The debate in Europe

Europeans pay far higher fuel taxes than Americans, but most accept their governments’ argument that discouraging fuel use minimizes fuel imports. When my wife and I lived in Europe, we were often asked why Americans kept fuel taxes so low (and therefore greedily burned so much gasoline). I was sometimes tempted to reply, “because our government doesn’t restrict the mobility of its citizens.”

But maybe I shouldn’t criticize my former neighbors. Years of debate there will help the discussion here. For example, many Europeans called a proposal to equip cars with GPS devices that would beam position and time data to satellites so governments could bill them for road use an unnecessary intrusion on privacy. Some feared speeding tickets in the mail along with the road-use bill.

As a result, the technology being discussed in the U.S. still equips cars with GPS sensors, but the in-car device contains all the data and simply communicates the total amount due at payment points. That won’t soothe fears of police subpoenas to link cars to crime locations, but it eases the spy-in-the-sky concerns.

There are other objections to LaHood’s proposal. For one, if all vehicles pay the same fee per mile, the government removes the incentive to buy more fuel-efficient vehicles.

LaHood's uphill battle

I applaud LaHood’s willingness to think outside the box. It’s time to review our options.

But I think LaHood’s initiative has a really uphill battle.

Americans are suspicious about changing tax laws. We fear it’s just another way of raising taxes. Too many of us have a memory like mine of when we lived near Chicago. Many of the expressways there had been financed by long-term revenue bonds, so going to work involved dropping 40 cents in coins into one, or several, toll-plaza baskets. The original deal had been free roadways after the bonds were paid off. Weeks before the bonds were paid, politicians changed the deal to “tolls pay for maintenance” -- and the tolls doubled.

Folks are also wary of social engineering. It's easy to slip the pet ideas of bureaucrats and special interests into new tax regimes. Road-tax proposals in Britain instantly drew add-on schemes: say, if people pay double to use the main highway between 7 and 9 a.m. then some will travel at a different time and congestion will ease.

And a per-mile tax creates new considerations. The gas tax is nearly invisible (yes, we know the price includes federal and state taxes. But do you know how much per gallon you pay? And per mile?). If I know it’s 5 cents a mile and my good-for-nothing brother is 200 miles away, will I pay an extra $20 plus gas to see him?

Then there’s just the press of business. With all the uproar over how stimulus packages are being spent, who has time for philosophy?

So good luck to LaHood on this one. If he can gather a consensus on a transportation tax, maybe he can help the United States develop a real energy policy.

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