1.5 cents per mile instead of gasoline tax

So what you are saying, is that, in a broad example, we have a 5% sales tax to cover the cost of government, as inflation increases the cost of things, that 5% RATE needs to constantly increase, eventually becoming 10% 50% and then 100% just because the CPI costly increases? Absurd.

By making the tax a PERCENTAGE it is already automatically indexed to inflation. The primary reason that this rate ever needs to go up is that government gets more inefficient and/or wants to provide new services (i.e. payoffs to get elected)

Mike

 

It was a JOKE. You saved $0.47 and I was joking about the (typical) inefficiency of government...spending $1 to cut you a check for $0.47. (Seriously, though I have gotten checks for less than the cost of a stamp several times)

See my prior post.

Nope. When you get the new car the DMV computer just assigns you a fixed miles per year estimate. You can (via the web) adjust it up anytime you want. Going down requires a visit somewhere, typically you would do this at your car dealer when you come in for your first 5K or 10K service. They would do it for free. They record the odometer on their records already. It would take 1 minute to log it into the DMV. When you sell the car you settle up. Paperwork already has to be processed...at best this takes an extra couple of minutes. There is no way this takes more resources than building, buying devices, certifying them, tech support on them, fraud prevention, etc.

On a trip to Disney World

You said their were no loopholes, I thought. Here you are paying double taxes for every out of state mile you drive (assuming the other states are gas-tax based.

Mike

 

[QUOTE="JSH, post: 2238115, member: 20894"If Oregon and their partners can get the cost down to 5% I think it would be pretty competitive with other potential methods.[/QUOTE]

Hah!

Can you compare to just raising the gas tax by 5%? This cost NOTHING extra and brings in 5% more money. With this system, revenue neutral to the consumer, brings in 5-10% less money to the state. This is a program only a bureaucrat can love.

Mike

 

Collecting gasoline taxes does not cause nothing. There is a cost to the existing system. That is what the State of Oregon needs to compare; the cost of the existing system vs. the cost of a replacement system.

The mileage tax at $0.015 per mile is not revenue neutral. Break even is 20 mpg and the fleet average is above that. The average driver would pay more by paying $0.015 per mile than the current $0.30 per gallon.

 

There are no checks involved.

 

You can't get rid of the existing gas tax system because you have to pay federal gas taxes. The "extra" cost for including the state taxes has to be much less than 1%...probably more like 0.1%. Digital process of credit cards is done as low as 2% by Visa and MC and they make huge profits, provide reward/airline miles and cover fraud and theft. Yes, it is a different kind of system, but mostly totally automated.

My comment about revenue neutrality was intended as a "what if" comparison. IF it was revenue neutral you'd be losing 5-10% with the new system...compared to a very very small cost to add in the state tax to the mandatory federal tax.

Of course we need to total taxes collected to be enough to cover what the government spends (despite what politicians might say one way or the other).

My preferred methods to do this:
- raise gas taxes, index to cpi or adjust annually by some max increase (for example)
- to cover high mpg cars...sorry just need to raise the amount to cover this -- continue to encourage high mpg cars
- to cover cars that use zero gas (i.e NG, EV, hydrogen)
- first, do nothing, we want to encourage these. We give incentives to buy these, why turn around and tax them? A mixed message.
- we already tax electricity, so we are partially covered anyway
- second, determine some threshold, such as 10% of miles driven. When non-gas cars reach this start phasing in a way to tax them
- a per mile tax based on a simple odometer reading, estimated yearly, (pay quarterly), settle when car is sold or totaled, etc
payment per mile based on vehicle weight, fuel type, etc.

Driving out of state is a problem, legally. I'm not sure it will hold up taxing in one state for an activity that takes place in another state. Someone will sue and win, I'm sure. So we need all states to use the same system -- but that won't happen unless it is required to get federal highway funds.

Mike

 

I could not help but recall some of the history leading to the French Revolution. Even back then the king turned over tax collection duties to "Tax Farmers". From wikipedia:

"By the end of the 18th century, the Ferme générale system became a symbol of an unequal society. The Ferme générale, with its colossal fortune, was seen as encapsulating all the perversions of the political and social system. People blamed the injustices and the annoyances - which actually arose from the complexity of the tax system - on the company itself, including the brutality of tax collecting troops and the brutal repression of smuggling. The gabelle (tax on salt) was the most unpopular of all the taxes."

The underlining is my emphasis. We may think we are discussing a "finalized" tax system, but in reality, we are observing the emergence of taxing human behavor instead of sustaining roads and infrastructure. All this on top of creating private firms having a vested interest in siphoning as much taxes as possible. Guess it is time to relearn history by repeating it.

 

Just so you know, the proposed transportation bill draft, assuming Congress addresses that <unlikely?>, basically says states should be considering charging plug-ins a small fee to make up for the lost road taxes.

 

Well no, that is not what I said at all. I said that gas prices don't go up at cpi, nor do number of gallons of gasoline, but cost of building roads do. You need to index to the cost of road construction, which is much closer to cpi than

Rising Gas Prices: How High Has it Gone Over the Years? [CHARTS]
Well no, one reason we do inflation without food or energy is these factors seem to be quite changable.



Sure if we pick 1970 as a start point, gas usage has gone up 53% and prices have gone up a little more than inflation, but ... taxes would have spiked in 1979 to exacerbate the recession, and would have again spiked in 2008 to exacerbate the recession. Not a good idea to raise taxes in a recession, then lower them during growth like the late 90s. A straight sales tax on something that seems to spike in price during our recent recessions is bad policy. Why not add an inflator to the tax, and have the government periodically readjust? Labor and raw material prices do not move with oil prices, oil prices are only a small part of cpi.

Has government gotten more inefficient when it comes to building roads and bridges? Well there should be structural reform, but it was never efficient here. Still when I look at building toll roads versus highways, the government seems very efficient at highways. As mentioned oregon's budget for roads is only 22% from local taxes, most states are less than 50% from local and federal fuel taxes. Simply because the gas tax has not kept up with inflation does not mean the states aren't spending money, it simply means they are taking the money from other areas.

Part of the problem is slow approval of new road projects, and governments drive to build shovel ready projects even if they don't help the infrastructure. That is a harder problem to solve than taxing, but raising fuel taxes is fairly simple, and probably the best solutions for the 2 major parties for the funding short fall. My city has been abused by the state and federal government. We are the biggest city without a freeway bypass, have rapid population growth, but the interstate has needed improving for over 30 years. Money has been diverted to toll roads, and the big trucks don't take the toll roads.

 

I like how you start but not how you end. What is left out is taxing pollution. Specifically pollution coming out of the tailpipe determines the yearly tax based entirely on the make and model of the car. The old beaters go up in this tax over time. The non-polluting EV folks are not taxed in this regard. Taxing per mile is so sad since we have no "shortage" of miles to worry about. We have diminishing fuel and air quality we do have to worry about.

 

The tire tax suggestion was to target cars not using current fuels; BEVs mostly. The tax can be indexed to tread life or wear rating. Lower rates for shorter life tires, but the need to buy a set more frequently makes up for the lower rate. The issue I see is in states without regular safety inspections.

But the federal fuel tax is a flat fee per gallon, and many states also tax fuel this way. The reason for the short fall of fuel taxes not covering road work on the federal is due to the tax not being indexed to inflation or anything. Going to a rate can be another solution, but it will also need a floor amount of tax so periods of low fuel prices like now won't short change the transportation fund.

I like these ideas for the truly alternate fueled vehicles.

That is the only real issue with a simple odometer read system. A state income tax deduction for those out of state miles would be the simplest solution until the majority of states switch over to a mileage based system. Base the deduction amount on average fleet fuel economy(25mpg) and the per mile tax. Saving fuel receipts from a trip for gallons bought out of state isn't a hardship. Put a cap of, say 5000, out of state miles per year to reduce abuse from those living on the state border for individual taxes. Businesses can get a higher cap, but have tougher record requirements.

I think that has more to do with Congress wanting to avoid the federal fuel tax issue.

The amount of vehicle pollution is roughly tied to the amount miles they travel. The EPA and CARB emission bins are defined on the amount of a pollutant is emitted per mile on the test. Taxes on the gallon of fuel may be a better representation since it will cover emissions while idling stopped, but taxing the crude itself in order to cover pollution damages will simpler and fairer.

All petroleum products result in some amount of pollution; taxing the crude is simpler than all the final products at the end of the line. Taxing those products doesn't allow a steeper tax on more damaging forms of crude. A tax on the gallon going from the pump into a car's tank sees only gasoline. Put it on the barrel of crude, and you can choose to adjust on how sweet of sour it is, or if it is conventional oil or non-conventional, i.g. tar sand. Thus more taxes can be applied to the more polluting crudes.
.

 

Yes, the Feds would still need to collect federal gasoline taxes. That does not involve the state of Oregon. As someone who has owned a business and collected sales tax, there is no piggybacking on an existing system. Every month I had to submit my state, county, and city taxes, using separate websites and separate payments.

 

The last thing I would advocate is changing the gas tax setup we have now. The rates may change, but the method works perfectly when administered properly. The pollution comment was not actually advocating for a tax but a comment on 3PriusMike's list where I would go after pollution effects before embarking upon mileage effects. (But few here like anything other than the top of the list anyway.) I do like your point about crude content. Taxing corporations for pollution is much better than taxing individuals with no control on the industry. The gigantic mess that is tar sand pollution cannot be solved by taxing US citizens for Canadian controlled decisions.

 

IF gasoline perfectly followed the CPI, I would expect its graph to be exactly flat, right?
It has some ups and downs, but otherwise IT IS close to being flat over each 5-10 year period.
That is my point. Thanks for making it for me.

Mike

 

The point isn't the minor amount of effort required for a business owner. The cost and pain per transaction is identical for the consumer to pay federal taxes alone or federal plus state (+ misc). No extra work and no extra device in a car and no extra device for the retailer is required. The entire system is already in place.

Remember every gas station still has to send in state taxes collected...for example sales taxes on oil, snacks, etc. There might be a couple of states that don't have sales tax or don't tax these things...but a very high percentage of stations must collect and pay this. Every item type is processed by the cash register as to what taxes are due for each. The entire overhead for this already exists and will still exist if a state chooses to tax gasoline or not.

The Oregon system is a new, extra overhead that is not needed, IMO. Hopefully the other citizens of your state will try to stop the silliness of this new inefficient system. But that is just my opinion.

Mike

 

Oregon doesn't have a sales tax.

 

The cost of gas may have remained flat when adjusted for inflation, but the costs for road building and maintenance, the stuff the gas is supposed to pay far, has been rising. The steady value for federal and some states were set some time ago, and did not allow for such costs increases.

 

Makes sense! Apologies for doubting your common sense

 

Exactly why do you think it is a "good system"?

 

only for up to 100,000 miles.

yes, as well as the 2003-2008 corollas.

digital odometers are childishly easy to tamper in most cars (like toyota), except for GM cars.