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.