A proposal to tax vehicles based on the mileage they drive was rolled out this week by a California state senator from Concord. A nickel-per-mile charge would replace the per-gallon fuel excise tax currently used. On top of the cries of “Another tax? Are you kidding?” come legitimate concerns of how California will actually validate the mileage, and whether citizen privacy will be compromised.
One of the underlying justifications for this proposal is that we Californians just aren’t buying as much gasoline as we used to. Raising gas taxes was a technique to encourage more efficient fuel consumption. However, less gas consumption equals less gas revenue. Darn us for actually being more efficient and conserving resources like we’ve been browbeaten into doing for decades.
In all matters of taxation, taxes on property or activities should be assessed based on the cost borne by the government directly resulting from your use of the property or activity. In other words, the more one uses a community resource, the more they should pay for its upkeep. A vehicle tax should go to building and maintaining roads so you can use your vehicle. A vehicle tax should not be used to build a homeless shelter. A miles-driven tax structure seems to support this philosophy.
Much like the traffic jams this tax plan aims to cure, this proposal will get bogged down in the details. Are all miles equal miles? If I drive around on my ranch, never touching public roads, am I still being billed? What if I go on a cross-country trip? Why should I pay California for miles I drove in Utah? Furthermore, if mileage fees are linked to the impact of the vehicle on our roads, will there be different rates based on the size of vehicle? Will a cement mixer be taxed a different rate than a Mini Cooper?
Moreover, will this system factor in the intent of the driving? If I’m driving around aimlessly towing an advertising sign, will I be charged the same as someone who is delivering hot meals to needy people as part of a charity? Should students pay the same rate as working folk? What about the minimum-wage landscaper who needs his truck to carry the tools of his craft?
One can be assured that these details will be hashed out in the halls and closed doors of the state Capitol, with many special interests carving up the proposal.
The biggest question will be how the state plans to verify and audit miles driven. Will it be on the honor system, where honest taxpayers will fill out a section on their yearly tax returns? Do we have to check in at some auditing station at the DMV or smog station to verify our mileage?
The leading solution currently entails the addition of a GPS chip in your vehicle that “somebody” would be monitoring. This leads us down a rabbit hole of “who” is doing the monitoring, and the discussion whether the tracking will always be used for the “noble” intent of collecting revenue. Will it suffer scope creep like so many other government policies, and be used to make sure citizens aren’t engaging in unapproved activities unrelated to driving?
If the objective is to tax one’s driving based on the impact on the road system, and the impact of one’s exhaust on our air quality, the efficient manner to collect revenue that will support those activities is via a gas tax. The more miles one drives, the more one pays; the less you drive, the less gas you would buy. Additionally, gas taxes are point-of-consumption taxes; like sales taxes, you pay them up front if you want to get your product.
There is no doubt that California’s aging transportation infrastructure is in dire need of vigorous investment. The percentage of our state budget dedicated to infrastructure has declined almost every year since the heyday of transportation investment in the 1960s. Creative methods to fund these expenditures should be considered, but solutions that involve burdening the people with more bureaucracy, and potentially invade their privacy, should be never be allowed on the road.
Brian Thiemer is chairman of the Solano County Libertarian Party. He can be reached at firstname.lastname@example.org.