It turns out that with more efficient vehicles on the road, governments are concerned that their tax revenues will decrease as drivers buy less gasoline, diesel or petrol.  Many governments rely on those fuel taxes to pay for road improvements or for general revenue. So it would not come as any surprise if they try to remedy this.

How about taxing your annual mileage then rather than your fuel?  That is what the US state of Oregon is thinking according to TheTrucker.

Oregon drivers may someday have a choice in how they pay a road users fee.

A task force within the state Department of Transportation is reviewing mileage-based assessments and looking at electronic systems for measuring and reporting mileage, systems that may already be used by private companies.

Driving the issue is a drop in revenue from the state fuel tax, which pays for highway and bridge maintenance. Revenue is falling as fuel efficiency increases and as more people are expected to drive hybrids or electric cars.

A few years back the state looked at a GPS-based system that could track the number of miles a vehicle was driven. This did not get any public support so the idea was dropped and the state is now looking at alternative, less intrusive means of determining individual car mileage. A  pilot project will test and demonstrate various reporting methods including using date from insurance companies, cell phone apps, or just an annual flat fee.

Transportation officials plan to approach the 2013 legislature with a bill authorizing a mileage tax for vehicles that don’t pay gas tax.

The state may also someday propose a mileage-based system for all vehicles, not just hybrids and electric cars.

In a related article we learn that the UK government faces a £13 billion revenue shortfall over the next two decades from having more fuel efficient cars on the roads. Wales Online notes that to cover the shortfall the government might consider a special electricity tax for EVs, extending the existing vehicle excise duty to EVs, or imposing a new fee related to mileage and congestion. Otherwise, if the duty on petrol and diesel were to remain, it would need to increase from 58p per litre to 87p per litre to keep revenue neutral.  See also Kent Online, Fuel duty `could rise 50%‘.

These articles, of course, beg the question: what is your government up to?





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2 Comments on Nothing is Certain Except Death and Taxes

  1. […] order to track their distance. There is a video with this post. You will recall that the state of Oregon is also studying a mileage tax fearing that road tax revenues funded by gasoline taxes would fall […]

  2. Elroy Jetson says:

    In spite of the golden rule in economics of avoiding multiple taxation (to preserve the government’s ability to distinguish effects) you can be sure that none of these taxes will be optional, and the most likely scenario is a plethora of new taxes for road use in general; tolls on specific roads; vehicle taxes (annual city/state); additional taxes on all forms of energies; and general confusion on the part of governments as to why the domestic economy can’t pull itself out of the doldrums. There is not, and never will be a free lunch.