Mileage Tax: A Half Baked Idea

Dale Franks at Q and O sneers at Oregon's half-baked, environmentalist-endorsed [redundancy alert] idea for making road taxes more "fair" by putting GPS receivers in every vehicle in order to tax vehicles by mileage. I consider myself an environmentalist, and I think this plan is crap. (Nevertheless, I am not insulted by Dale's painting environmentalists with that broad brush, because many of my fellow environmentalists sadly fit the stereotype.)

When I read the words "mileage tax" I thought they might just ask for an odometer reading on the annual state inspection and base the mileage on that. That would make at least some sense-- it would be easy to collect the information, and it would not require the invention of an entirely new bureaucratic division. Those who would propose that mileage measurements be done with GPS receivers are not environmentalists, they're socialists.

However, a mileage-based tax would have a lot of implementation problems even without fancy GPS receivers and intrusions into privacy. For one thing, how do you account for miles driven by tourists who drive in with their non-Oregon-registered cars? If tourists don't have to pay taxes for road maintenance, more of them may come to visit, compounding the problem. I'd venture a guess that the number of miles driven by tourists is a lot more than the number of untaxed hybrid-car miles. Even assuming the GPS receivers are a good idea, the problem of tourists' road usage makes Oregon residents' mileage a worse proxy for road usage than gallons of gasoline consumed.

States have been using gallons of gasoline purchased as a proxy for number of miles driven in order to make taxes for road usage correspond to actual road usage. The invention of hybrid cars is throwing a kink in this. But I don't think it's enough of a kink to justify kinking it up worse in some other spot.