Some commentators are suggesting that the Obama Administration’s plan to scrap the federal gas tax in favor of a pay per mile fee would boost the tab to Americans as high as 250 percent, raising their current tax of 18.4 cents per gallon to as high as 46 cents. I disagree, and I will explain why.
The article by Paul Bedard, in the Washington Examiner and headlined “New pay-per-mile scheme would boost taxes 250 percent” , can be seen here.
Contrary to the opinion in this article, I believe that a transition to a mileage tax is a good idea for the future. A mileage tax is a user fee, pure and simple. The more you drive, the more taxes you pay to maintain the roads. Today, with the current gas tax, if you drive an electric car, you are paying nothing towards the maintenance of the roads you use but, if you go buy gas to power your lawnmower or chain saw, you are paying to maintain the roads that the lawnmower will never ride on.
Currently the average fuel efficiency is an estimated 22.3 miles per gallon. The Corporate Average Fuel Economy Standards will require that there is a fleet wide average MPG of 54.5 by the year 2025. The combination of that increased MPG, the emergence of electric cars and the increased reliance on public transportation would render the gas tax as a funding source for road maintenance, practically obsolete.
One final note, the author argues that by switching to the mileage tax, it will increase the per gallon tax actually paid from a current 18.4 cents per gallon to as high as equivalent of 46 cents per gallon. That is an increase of nearly 250 percent.
When the current average MPG of 22.3 increases to an average of 54.5 it will be, you guessed it, an increase of nearly 250 percent, making the transition revenue neutral to the driver.
Christopher Hopkins is senior vice president for aggregates and mining for The Saint Consulting Group, email email@example.com