More on Fuel Taxes

In an earlier post I proposed a three part tax to replace slowly diminishing fuel tax collections. The critical piece of the concept is the mileage tax. Both calculating the tax and collecting it challenge us with problems of privacy, accuracy, cost and enforceability.

Because of the privacy issue an onboard system of measuring mileage, by state, and computing the amount of tax due to each state requires combining GPS technology with an small computer. Sending the collected information to tax collecting facilities requires including a low power transmitter. Mass produced these devices will not cost a prohibitive amount – probably well under $100.

By keeping the data on the vehicle until the tax is paid, and erasing it at that time, eliminates the worry of many people that a large state or federal database of mileage and location information would be subject to many prying eyes.

At specific tax collection facilities the data gathering and computing device transmits the data so, one way or another, the tax can be collected. Stations could be specific to tax collection, or service stations, or even grocery or convenience stores. If the vehicle does not use any of the collection facilities the authority issuing the registration for the vehicle can collect the tax. If no taxes are due the taxing authority will have the information and no tax would be added to the registration fee.

Obviously, cost of the various devices needs thorough study, measuring one system against another. In addition, the concept requires research to determine the tax rates used for the various states. Other components of the three part tax structure, presented in an earlier post, also need research.

Implementation of the concept will take several years. Eventually the taxing concept will replace the current gasoline/diesel fuel tax.

Your comments are always appreciated.

The Gasoline Tax Dilemma

A look into the future shows an alarming dilemma in the way our country funds its highway construction and maintenance costs.

The largest funding source for highways is the gasoline and diesel fuel tax. The essence of the future problem is that the fuel tax, over the next twenty years, will decline as vehicles use less gasoline and diesel because of better fuel efficiency and/or the switch to hybrid or electric power sources. As we green our planet, we, in fact, will run out of adequate highway funds.

Starting some six weeks ago, a plan has bubbled around in my head and finally has enough body to it to post it here. Concept only is described. Omitted are the details – I am seeking funding to fully research the concept and its many ramifications and do not want to divulge too many details. And there are many!

The tax plan has three parts:

· A tax that will encourage resource conservation

· A tax that will discourage the use of petroleum based fuels

· A tax that will discourage miles driven

Regarding the last of the three, there has been much written about measuring mileage driven using GPS technology. This rightly causes invasion of privacy concerns, because time and location data from the GPS could be inappropriately used.

In the Schaul concept (clever, creative name) is a system for measuring mileage and collecting a mileage-based tax that does not depend on GPS technology, does not invade privacy, and seems reasonably easy to collect. This may be the greatest value of the concept.

The various parts of the three tax bases adjust easily to replace the amount of fuel tax now collected, and as the fuel tax declines, can continually adjust to keep revenue at a level necessary to maintain our highways and bridges.

There are competing realities here. First, no one wants to pay taxes or add complication to the way they are calculated and collected. Second, the highway infrastructure will gradually wear out if we do not continue to improve it as population grows, and maintain it as wear and tear takes its toll. Making the taxes realistic and based on measurable factors, with easy collection systems seems a good way to proceed.

Your comments are always welcome.