Oregon looks at taxing mileage instead of gasoline

ludahai said:

article here

While I have no problem with the idea of taxing the number of miles someone drives, I would NEVER allow a government bureaucrat to put a GPS system into my car so the government can track everywhere I go.

Surely there has to be a better way to implement such a scheme.

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Today we are experiencing a unique moment. Oil prices are in a historic free fall from a peak of $147 a barrel to $39 today. In July, U.S. gasoline was selling for $4.11 a gallon. It now sells for $1.65. With $4 gas still fresh in our memories, the psychological impact of a tax that boosts the pump price to near $3 would be far less than at any point in decades. Indeed, an immediate $1 tax would still leave the price more than one-third below its July peak.

The rub, of course, is that this price drop is happening at a time of severe recession. Not only would the cash-strapped consumer rebel against a gas tax. The economic pitfalls would be enormous. At a time when overall consumer demand is shrinking, any tax would further drain the economy of disposable income, decreasing purchasing power just when consumer spending needs to be supported.

What to do? Something radically new. A net-zero gas tax. Not a freestanding gas tax but a swap that couples the tax with an equal payroll tax reduction. A two-part solution that yields the government no net increase in revenue and, more importantly--that is why this proposal is different from others--immediately renders the average gasoline consumer financially whole.

Here is how it works. The simultaneous enactment of two measures: A $1 increase in the federal gasoline tax--together with an immediate $14 a week reduction of the FICA tax. Indeed, that reduction in payroll tax should go into effect the preceding week, so that the upside of the swap (the cash from the payroll tax rebate) is in hand even before the downside (the tax) kicks in.

The math is simple. The average American buys roughly 14 gallons of gasoline a week. The $1 gas tax takes $14 out of his pocket. The reduction in payroll tax puts it right back. The average driver comes out even, and the government makes nothing on the transaction. (There are, of course, more drivers than workers--203 million vs. 163 million. The 10 million unemployed would receive the extra $14 in their unemployment insurance checks. And the elderly who drive--there are 30 million licensed drivers over 65--would receive it with their Social Security payments.)

Revenue neutrality is essential. No money is taken out of the economy. Washington doesn't get fatter. Nor does it get leaner. It is simply a transfer agent moving money from one activity (gasoline purchasing) to another (employment) with zero net revenue for the government.

Revenue neutrality for the consumer is perhaps even more important. Unlike the stand-alone gas tax, it does not drain his wallet, which would produce not only insuperable popular resistance but also a new drag on purchasing power in the midst of a severe recession. Unlike other tax rebate plans, moreover, the consumer doesn't have to wait for a lump-sum reimbursement at tax time next April, after having seethed for a year about government robbing him every time he fills up. The reimbursement is immediate. Indeed, at its inception, the reimbursement precedes the tax expenditure.

One nice detail is that the $14 rebate is mildly progressive. The lower wage earner gets a slightly greater percentage of his payroll tax reduced than does the higher earner. But that's a side effect. The main point is that the federal government is left with no net revenue--even temporarily. And the average worker is left with no net loss. (As the tax takes effect and demand is suppressed, average gas consumption will begin to fall below 14 gallons a week. There would need to be a review, say yearly, to adjust the payroll tax rebate to maintain revenue neutrality. For example, at 13 gallons purchased per week, the rebate would be reduced to $13.)

The Net-Zero Gas Tax

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bhkad said:

There is. It's a system about which I've posted on these pages previously. And here, fresh off the presses, is Krauthammer's version of that same system.




It makes sense, it's simple, fair and seems like it will work.

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Gladiator said:

Many states already collect mileage information during state inspections and emissions inspections.

Since odometer fraud has been made a crime and civil action whcih which gets automatic $1500 plus attorney fees, many car manufacgtureres have made odometers more relaiable, and less subject to winding backward, because their dealers have lost money from clever employees trying to sell a car by reducing the mileage.

Maybe the law could be that if you con't have a working odomeer, that you would have to get a GPS for tax calculation purposes. The many states already have the mileage info all they have to do is do the calcuations and sent out the tax billls.
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MrVicchio said:

Hey guys...

Let me throw a thought at you, let's just say they pass said GPS Mileage tax laws. I see a few things coming from that.

1. The state deciding that to protect the environment, they create progressively higher taxes for more miles used per week.. I.E. "Oh you shouldn't drive more then 50, or 100 miles a in a week, so if you do we're gonna tax you 1.5X or 2x for each mile over."

2. Speed limit automatic ticketing. It's really NOT hard to imagine this one. GPS Can be used to determine speed, so if the GPS shows sustained speeds over the set speed limit for an area, you get an automatic fine/ticket the next time you pull up for gas and your car interfaces with the Government computers to determine your fuel tax.

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