Transportation ‘Fair’ Tax Would Tax Miles Driven

Vehicle Miles Tax

Vehicle Miles Tax House transportation Chairman Bill Shuster is trying to build support for a bill that would tax miles driven to help pay for transportation, because tax money coming from gas and fuel is no longer enough to cover the funds needed to repair the nation’s ailing roads, and the shortfall is expected to worsen.

The problem is that people are traveling less and they’re buying more fuel efficient vehicles.  This has created a shortfall in the transportation budget.   By 2025, fleets will be required to have an average fuel economy of 54.4 mpg, furthering the shortfall.

According to Business Week, in order for the fuel tax to be replaced, a tax of 1.8 cents per mile must be placed on vehicles.  However, some have argued that the actual tax might be levied depending on vehicle size, much like tolls.

Many feel that the tracking of one’s personal miles drive would be a violation of personal information.  It has been suggested that when it’s time for a vehicle license renewal, the vehicle’s owner would have to provide an account of the miles he or she has driven for the year and would pay the tax at that time as part of the license renewal fee.

Missouri Senator Claire McCaskill said  VMT would hurt those living in rural areas the most, as they often have to travel further distances for school, work and even basic necessities.

The ATA has also spoken out against a VMT, saying the cost of creating, enforcing and implementing the new system could be even more costly than the added revenue the tax might generate.

Read more about the debate here.