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If I hadn’t seen this at The Hill, I would have sworn it came straight from The Onion.

The Obama administration has floated a transportation authorization bill that would require the study and implementation of a plan to tax automobile drivers based on how many miles they drive.

The plan is a part of the administration’s “Transportation Opportunities Act,” an undated draft of which was obtained this week by Transportation Weekly.

This follows a March Congressional Budget Office report that supported the idea of taxing drivers based on miles driven.

Among other things, CBO suggested that a vehicle miles traveled (VMT) tax could be tracked by installing electronic equipment on each car to determine how many miles were driven; payment could take place electronically at filling stations.

The CBO report was requested by Senate Budget Committee Chairman Kent Conrad (D-ND), who has proposed taxing cars by the mile as a way to increase federal highway revenues.

There is nothing here that is not completely bizarre. Let me count the ways:

You have to believe the proposed new tax would punch lower and middle-class working Americans right in the gut. It would hurt people who live in the suburbs who have to drive to work most of all. It would also crush small businesses that rely heavily on transportation: delivery companies, restaurants (especially franchise restaurants like pizza shops), service-based companies that come to your home (like cleaning services, landscapers, and home repair contractors).

Let’s take a guess at what sort of impact that might have. I’ll use myself as an example. I drive about 300 miles a week — my commute is fairly short, but I do a lot of “in town” driving. Now, let’s assume the tax is very modest, say 2 cents a mile. Over the course of a week, this new tax will cost me an extra $6. Over the course of a year I’ll pay the government another $312. Not terrible, right?

Except that’s two or three weeks’ worth of groceries. Or a car payment plus insurance for a month. Or, with gas prices what they are, 5 weeks worth of gasoline.

But there’s more. A lot more.

Now imagine what that might do to a small landscaping business with a large coverage area that drives ten times the distance I do each week. Their tab would be $3,120 a vehicle. If they have three trucks, the bill goes up to just under $10,000 a year, not including the extra they may have to pay for lawnmowers and weed whackers for which they’d buy gas when they gassed up their trucks. What could a small business like that do with ten grand a year? How many people could a company like that employ part-time during the busy season if they had that money to spend? I’d guess at least a couple, even at $10 an hour.

Remember, also, that this tax would apparently ride on top of existing gas prices, which right now hover around $4 per gallon. I seriously doubt the government would replace the 18.4 cent per gallon tax it already collects. After all, the idea is to collect more revenue, not replace one revenue stream with another. One might conclude that the Democrats are trying to drive up the cost of driving a car so that people would change their lifestyles to ones better-suited to the progressive ideology. But that would be crazy talk, wouldn’t it?

One last point. The entire premise of this trial balloon is that we need more money for our highways, so let’s see whether that’s actually true or not. Earlier this year, Congress passed a transportation bill that spent almost $42.5 billion dollars on highway funding. If we divide that up among our 42,973 miles of federal highways, that breaks down to $988,993 per mile of interstate highway.

We know, though, that Washington doesn’t restrict its spending to federal highways. So lets pretend, just for sake of illustration, that states don’t spend anything on their own roads and the transportation bill has to cover all 4 million miles of “public roads”. I know that’s a bit of an exaggeration, but even if we stretch highway money that far, we’d still spend $10,625 per mile of public road just for 2011.

Does that seem like a lot to you? It certainly does to me. I’ve tried to find some good information on how much it should cost to maintain a mile of highway each year, but I’ve had no luck. I’ve found plenty of sources, mostly from government and highway industry sites, full of information about what they think it should cost, but those are hardly objective sources. I’m darned sure we can make the highway maintenance system a lot more efficient and effective than it is and I suggest we do that before we allow the Democrats to contemplate yet another unnecessary and harmful tax increase.

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2 Responses to “As Tax Increases Go, This One Would Be A Humdinger.”

  1. EricH says:

    "Democrats are trying to drive up the cost of driving a car so that people would change their lifestyles to ones better-suited to the progressive ideology."
    Here's what I don't get: if you want to encourage green energy use-and as I understand it, that's the end goal that the progressives are shooting for-then taxing based on mileage is exactly backward. Because the driver who spends thousands of extra dollars for an electric car ends up paying just as much toward this tax as the SUV driver who gets 15 miles to the gallon. If it doesn't correlate to fuel consumption, it's no incentive at all.

    • Jimmie says:

      My guess is that the “pay at the pump” part of the proposal would handle that, perhaps with some sort of rate based on how frequently you filled up.

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