Vehicle Taxes Per Mile Driven: Do you feel deceived?

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Vehicle Taxes Per Mile Driven: Do you feel deceived?

Debate question: Do you feel deceived? Why or Why Not?

Have you ever heard of the vehicle miles traveled tax? No? Well get ready to hear more about it, because the vehicle miles traveled tax, or VMT, is the latest way states are looking to make up for falling gas tax revenues.

"The VMT is likely the way states will raise money in the future for their roads and infrastructure," said Joshua Schank, president and CEO of the ENO Center for Transportation in Washington, D.C. "The states aren't yet to the point where they've figured out exactly how to implement the VMT, but they'll get there."

Even though the VMT is more of an idea than a reality at this point, the fact is states are looking at implementing it as a way to make up for falling gas tax revenues. Those revenues are the primary way states pay for maintaining their roads, highways, bridges and in recent years those budgets have been under pressure.

(Read More: US Auto Sales Expected to Drive Past 15 Million in 2013.)

Why? Blame it on the double whammy of a recession prompting people to drive less, which means they are filling up less often. On top of that, Americans are increasingly driving more fuel efficient vehicles, including hybrids, which means people make fewer trips to the gas station. According to the University of Michigan, the average fuel economy for a new vehicle sold in 2012 was 23.8 MPG, an all-time high.

Taxing Electric Cars

Starting in February the state of Washington will tax electric vehicle owners $100 per year. It's estimated there are a little more than 1,500 electric cars in Washington.

The money raised will go to the state's road maintenance fund. In essence, Washington wants electric car owners to pay $100 for the privilege of driving around the state.

Meanwhile, lawmakers in Oregon are kicking around the idea of taxing high mileage vehicles starting in 2015. The Oregon tax could be a flat annual fee and/or a tax per mile driven.

Either way, what's happening in the Pacific Northwest is raising a number of questions. The primary one being: Is it only a matter of time until anybody owning a car or truck is paying a special tax based on how much they drive their car?

Supporters of VMT or per mile taxes point out that electric car and even hybrid car owners are paying nothing or very little to help maintain state roads.

Take a look at the Washington electric vehicle tax and compare it to the state's current gas tax of 37 cents per gallon. If somebody drives an internal combustion car that gets 30 MPG and they average 12,500 miles driven each year, they'll pay about $154 a year in state gas tax. By comparison, electric car owners will be paying less at just $100 per year.

On the flip side, critics of VMT or per mile taxes say it's hypocritical of state governments to promote electrical vehicle ownership and then turn around and tax those who are the "early adopters".

Tolls, License Fees and the Federal Gas Tax

For years states and some municipalities have been taxing those who drive on certain roads or who cross select bridges with tolls. Many of these tolls were implemented to pay for building or expanding a new highway, with the promise of removing the toll once the road or highway was built. In reality, most toll roads have remained toll roads. Why? States need the funds.

"We are not spending enough to keep up with the maintenance and repairs of roads and bridges," Schank said. "People don't understand paving roads, adding roads, etc. costs money. That money has to come from somewhere."

The federal government collects 18.4 cents for every gallon of gas pumped in this country. The federal gas tax has gradually increased from 1 cent a gallon back in 1932 to its current rate of 18.4 cents.

While you may not want to pay any more in federal gas tax, the idea has been advocated in recent years by a growing number of policy makers. In fact, in 2010, the Simpson Bowles deficit-reduction commission called for raising the federal gas tax as a way to help cut the deficit.

Now, Erskine Bowles isn't so sure that idea would fly in Washington.

"I think it (raising the federal gas tax) is generally not well received," Bowles said. "There are lots of reasons not to do it and there are lots of other ways to generate revenues, but what we have to do is make sure that we generate enough revenues to pay for the transportation spending that we are currently undertaking," says

Big Brother Tracking Where You Drive?

As more states look to VMT or per-mile driven taxes, they will wrestle with the tricky issue of calculating how many miles people drive. They could avoid the problem by imposing a flat annual tax on all vehicles when they are registered each year. Critics say that would be unfair to those who drive only 5,000 or 8,000 miles a year while others who are racking up 15,000 or 17,000 miles are paying the same tax.

There is also the idea of monitoring how many miles are driven using transponders on all cars and trucks. This idea pits benefit of having a more accurate read on the mileage of each vehicle against concerns the state will be able to monitor where you have driven your car. Who would have access to that information? Is that too much of 'big brother' tracking our lives?

There are still more questions than answers when it comes to the VMT, but make no mistake: The idea is gaining steam and coming to a state near you.

The New Way to Tax: Pay Per Mile Driven

First the nation works hard to come up with energy solutions, figure out how to reduce our expenses, invent energy efficient cars....and the next thing you know......taxed on that. SURELY the government had boiling in the back of its skull that we'll work hard to promote energy efficiency then tax that. I can think of other examples where this is happening too. One of them is with our health care...if only people realized what was really going on behind the scenes. good gravy.

And I guess my final thought is I feel so very angry all the while money is being filtered all over to other countries. So Yes I totally feel deceived and very disturbed. Sometimes I just wonder if we are going to have our own American Spring.

Joined: 08/17/04
Posts: 2226

How is this the federal gov't's fault? Or am I reading your statement incorrectly? These taxes are state taxes not federal.

Joined: 05/31/06
Posts: 4780

I'm not sure what the debate question is.

wlillie's picture
Joined: 09/17/07
Posts: 1796

While you may not want to pay any more in federal gas tax, the idea has been advocated in recent years by a growing number of policy makers. In fact, in 2010, the Simpson Bowles deficit-reduction commission called for raising the federal gas tax as a way to help cut the deficit.

to the debate question- No, I don't feel deceived. Luckily, I didn't believe the campaign lies in the first place. It makes it so much easier to not get disappointed if you never get your hopes up or expect what you are promised.

KimPossible's picture
Joined: 05/24/06
Posts: 3312

I don't know....roads highways and bridges are pretty high on my list of things that I unquestionably want our government to be responsible for properly maintaining.

While i do want them to make sure they are spending wisely as a whole, in order to have enough to fund the maintenance of our roadways (which is absolutely vital to our country).....fixing budgeting takes time, and in the meanwhile, i want to be certain there is enough for this purpose.

I don't know if i feel deceived or not....i can say that this doesn't particularly bother me though.

Joined: 05/23/12
Posts: 680

"Jessica80" wrote:

How is this the federal gov't's fault? Or am I reading your statement incorrectly? These taxes are state taxes not federal.

Really? There has been all the push from federal and state level to get more energy efficient, so when we did now they go and tax us because we've made better decisions. So basically, we can use the same logic and NOW ban cigarette smoking after people start quitting they say ....oh oops, now we're not getting the smoking tax so let's start taxing the quitters or the non smokers because they quit smoking and we need that missing revenue.

Both are responsible. There are interstates and I am sure the federal govt will take their share. Can you see them not? The Federal govt takes their share in all gas that we pay for...so, the state's loss is also their loss.

Number 1:
Government incentives for fuel efficient vehicles in the United States - Wikipedia, the free encyclopedia

The U.S. Energy Policy Act of 2005 established a federal income tax credit of up to $3,400 for the purchase of new hybrid vehicles, purchased or placed into service after December 31, 2005.[1][2] Vehicles purchased after December 31, 2010 are not eligible for this credit.[1][2] The law limited the tax credits to the first 60,000 eligible vehicles per carmaker, meaning that credits for popular models will be phase out before the tax break's scheduled expiration date. Note these are credits — dollar for dollar tax savings — not merely deductions. The tax credit is to be phased out two calendar quarters after the manufacturer reaches 60,000 new cars sold in the following manner: it will be reduced to 50% if delivered in either the third or fourth quarter after the threshold is reached, to 25% in the fifth and sixth quarters, and 0% thereafter.[1][3] The Internal Revenue Service is responsible for certifying that certain passenger autos and light trucks qualify for the credit and the amount of the credit.[3]

Number 2: just a very simple example which I am sure we can find all over the place...

Alternative-Fuel Tax Credit
Contact: Kansas Department of Revenue [tac@kdor.state.ks.us], 785-368-8222 .
Individuals purchasing qualified alternative-fueled vehicles after January 1, 1996, are eligible for state income tax credits, the amount of which differs depending on the weight of the vehicle and whether the vehicle was purchased before January 1, 2005. For vehicles purchased before July 1, 2007, a wide variety of alternative-fueled vehicles are eligible, but for vehicles purchased on or after July 1, 2007, only vehicles that run on biomass-derived fuels are eligible.

Joined: 05/23/12
Posts: 680

dp

Joined: 05/23/12
Posts: 680

"wlillie" wrote:

While you may not want to pay any more in federal gas tax, the idea has been advocated in recent years by a growing number of policy makers. In fact, in 2010, the Simpson Bowles deficit-reduction commission called for raising the federal gas tax as a way to help cut the deficit.

to the debate question- No, I don't feel deceived. Luckily, I didn't believe the campaign lies in the first place. It makes it so much easier to not get disappointed if you never get your hopes up or expect what you are promised.

I suppose this is sadder than feeling deceived...

People don't have more money to fork out for all of the taxes the governments want to create and call it for this or that reason.

Kim, I like to drive on good roads...and I pay tolls on lots of them. And as pointed out in the original article, basically after getting the tolls on some roads to pay for them, and being promised they'd be taken off, they kept them on out of their own justifications.

I am really upset because in the county my mom lives in they are closing schools, criminals get away with pettier crimes because they don't have money to pursue them, and people are lacking healthcare. The same people who obviously aren't able to support their counties are going to be taxed on how much they drive. Another tax when people are barely making it. YET we are sending money to Egypt. I want to know HOW we can send money to Egypt but can't keep up our roads and health? I am probably feeling emotional about this.

boilermaker's picture
Joined: 08/21/02
Posts: 1984

How else would you propose paying for road/highway/bridge maintenance? Use tax seems the most reasonable to me....

It seems your issue is with the larger budget? Money spent elsewhere? Is that your debate question?

Spacers's picture
Joined: 12/29/03
Posts: 4100

I feel a lot better about VMT than I do about car registration fees being based on the value of your car. I never understood why my sister, who drives nearly 100K miles per year, paid the exact same amount to register her car as I did, and I rarely put even 10K on mine. She's using the roads ten times more than me, and causing more wear & tear on the roads than I am, so she *should* have to pay more for using them. That makes a whole lot of sense to me.

I'm not in favor of the transponder idea, though. In my state I have to provide an odometer reading every two years to my insurance company, and I have to get a smog check every two years for registration and the odometer reading is logged into a state computer. That's certainly enough information to make sure that my fair share is adjusted at least every two years.

KimPossible's picture
Joined: 05/24/06
Posts: 3312

"myyams" wrote:

Kim, I like to drive on good roads...and I pay tolls on lots of them. And as pointed out in the original article, basically after getting the tolls on some roads to pay for them, and being promised they'd be taken off, they kept them on out of their own justifications.

I am really upset because in the county my mom lives in they are closing schools, criminals get away with pettier crimes because they don't have money to pursue them, and people are lacking healthcare. The same people who obviously aren't able to support their counties are going to be taxed on how much they drive. Another tax when people are barely making it. YET we are sending money to Egypt. I want to know HOW we can send money to Egypt but can't keep up our roads and health? I am probably feeling emotional about this.

I agree with Audra that your issue is really government misspending. I think we all have opinions on how the government could better spend their money, and there is a lot of disagreement on what to save and what to cut. But in the meanwhile....I don't want our roads to deteriorate, our bridges to become unsafe. If we need to make more sacrifices for this, then i think we should and find other targets for inappropriate tax hikes. Since we can't fix the current budget in one swoop....we may have to endure things we'd rather not to ensure they don't fail us. At least that's the way I look at it.

Not this time around but last year we had a couple of items on the ballot for government spending. I said no to all of them except for the one looking to get grants/money to fix our bridges. I know that money has to come from somewhere....but if that is my only option on how to get it done right now, then thats how I'm going to get it done because its too important to me.

And, like you, i will continue to moan and groan about how the government misspends money in all sorts of places. Smile

GloriaInTX's picture
Joined: 07/29/08
Posts: 4116

I think that bridges and highways are expenses that our tax money should be covering. Though I think the taxes we are spending now should more than cover it if we would cut things that we shouldn't be spending money on. We don't have a taxing problem, we have a spending problem.

Joined: 08/17/04
Posts: 2226

I see what you are trying to say but what I meant was that each state sets its own gas tax which is why some places are cheaper than others so how is that deceit by the federal gov't?

I don't see what the issue is. You bought a car that doesn't use as much gas so you are saving on gas purchases as well as giving our atmosphere a break with pollutants but you are now mad that you still have to pay for the roads you drive on in said car?

I pay gas taxes every time I fill my tank. I pay an excise tax to the town each year for my car (well cars). I pay tolls on roads that are toll roads but I don't go on them often. I don't complain that the gov't is trying to deceive me.

KimPossible's picture
Joined: 05/24/06
Posts: 3312

"Spacers" wrote:

I feel a lot better about VMT than I do about car registration fees being based on the value of your car. I never understood why my sister, who drives nearly 100K miles per year, paid the exact same amount to register her car as I did, and I rarely put even 10K on mine. She's using the roads ten times more than me, and causing more wear & tear on the roads than I am, so she *should* have to pay more for using them. That makes a whole lot of sense to me.

Yeah we have an excise tax here in Maine. I just paid $860 to register our new van....ouch. I do know that our excise tax law here is very old, from the beginning of the 1920s. My guess is back then maybe the amount people drove didn't vary quite so much from person to person?

It would seem to me that mileage would make more sense. However, i know for us at least, the money goes to my local town, not the state. I really wonder how much in-town mileage varies from one person to another, probably doesn't vary as much as overall mileage. Of course there is no good way to calculate that.

I mean if i drive 100,000 miles a year, I'm likely tearing up someone elses roads, yet my excise tax goes directly to my town anyway. Not sure how it works where you live.

Joined: 05/31/06
Posts: 4780

"boilermaker" wrote:

How else would you propose paying for road/highway/bridge maintenance? Use tax seems the most reasonable to me....

It seems your issue is with the larger budget? Money spent elsewhere? Is that your debate question?

I agree with this. I still don't get what the real debate question is, and I'm not being snarky.

Joined: 08/17/04
Posts: 2226

"KimPossible" wrote:

Yeah we have an excise tax here in Maine. I just paid $860 to register our new van....ouch. I do know that our excise tax law here is very old, from the beginning of the 1920s. My guess is back then maybe the amount people drove didn't vary quite so much from person to person?

It would seem to me that mileage would make more sense. However, i know for us at least, the money goes to my local town, not the state. I really wonder how much in-town mileage varies from one person to another, probably doesn't vary as much as overall mileage. Of course there is no good way to calculate that.

I mean if i drive 100,000 miles a year, I'm likely tearing up someone elses roads, yet my excise tax goes directly to my town anyway. Not sure how it works where you live.

Excise is town too here. I figured it all worked out in the end. If I drive mostly to 2 towns over...they still have to pay their excise tax for the roads.

GloriaInTX's picture
Joined: 07/29/08
Posts: 4116

"Jessica80" wrote:

I see what you are trying to say but what I meant was that each state sets its own gas tax which is why some places are cheaper than others so how is that deceit by the federal gov't?

I don't see what the issue is. You bought a car that doesn't use as much gas so you are saving on gas purchases as well as giving our atmosphere a break with pollutants but you are now mad that you still have to pay for the roads you drive on in said car?

I pay gas taxes every time I fill my tank. I pay an excise tax to the town each year for my car (well cars). I pay tolls on roads that are toll roads but I don't go on them often. I don't complain that the gov't is trying to deceive me.

The Feds get their share too.

What is the United States national gas tax rate?
The United States federal excise tax on gasoline is 18.4 cents per gallon (cpg) and 24.4 cents per gallon (cpg) for diesel fuel. On average, as of April 2012, state and local taxes add 31.1 cents to gasoline and 30.2 cents to diesel for a total US average fuel tax of 49.5 cents (cpg) per gallon for gas and 54.6 cents per gallon (cpg) for diesel.

What are the specific taxes for each state?
Some states charge an excise tax while other states have a flat tax. The below table displays state taxes plus fees, plus the 18.4 cents-per-gallon (cpg) federal excise tax. Additionally, some local counties may additionally charge an excise tax on gas, which is not reflected in this table. Please consult your specific local government for more information.

National and State Gas Taxes (Fuel Taxes) in the United States - GasPriceWatch.com

Joined: 08/17/04
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But again, what was presented in the article is state tax..no?

GloriaInTX's picture
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"Jessica80" wrote:

But again, what was presented in the article is state tax..no?

It also mentions raising the Federal gas tax.

Joined: 08/17/04
Posts: 2226

So raising the federal gas tax doesn't hurt people who bought electric cars. It hurts us that didn't. Where is the deceit there? It would really seem like the fed. gov't is pushing me towards a car that doesn't require as much gas as my mini-van.

The tax on the cars in the article is state tax.