To The Daily Sun,
How would you like to have a green plastic box tucked below your steering column keeping track of your speed, braking, how many miles you drive and where? Oregon already uses such a device to calculate residents' tax bill at a rate of 1.5 cents per mile.
Revenue from the standard per gallon gas tax is diminishing as required vehicle mpg rises. States are looking for other ways to raise money. California has authorized its own mileage tax pilot project. At least 19 states considered 55 measures related to mileage-based fees, according to the National Conference of State Legislatures.
Oregon's experiment is the first involving ordinary citizens. Other states have been watching closely since the program began this July. New, more fuel-efficient cars have decreased gas tax revenue. The assertion is that gas tax rates have not kept up with inflation. This is hard to understand since Social Security recipients got no COLA this year and they have not been much in the last decade.
In Oregon the assertion is that the effective tax rate will fall to less than 24 cents per gallon in inflation-adjusted terms within 10 years, according to the Institute on Taxation and Economic Policy. A mileage, or road usage, tax also erodes with inflation, but is immune from improvements in fuel efficiency. The tax discussion is not centered on need. Rather, it is about how best to raise tax revenue.
For purposes of the experiment, Oregon charges 1.5 cents for every mile driven. Every driver who participates in the program, whether they drive a fuel-efficient car or a pickup truck, pays the same rate for driving on Oregon roads. The state reimburses drivers who paid more in traditional gas tax than they would be assessed using the mileage calculation.
The Oregon Department of Transportation compared a 2014 Toyota Prius and a 2014 Ford F-150. The Prius averages 50 mpg and the F-150 gets 18 mpg. The average Oregonian drives 12,962 miles a year. Given those numbers, the Prius owner would use 259 gallons in a year and pay $77.77 in gas taxes, while the F-150 owner would use 720 gallons and pay $216 in gas taxes.
The annual road usage tax due for both drivers would be $194.43. The average Prius owner pays the state $116.66 (that's the $194.43 in road usage tax less the $77.70 in gas tax), while the average F-150 owner gets a $21.60 rebate (that's the $216.03 in gas taxes less the $194.43 in road usage tax).
Interestingly the revenue hounds are not interested in your privacy rights. Nor are they interested in discussing whether lighter, more fuel efficient vehicles wear roads at the same rates as historically experienced with larger heavier older cars. They also don't want to discuss why miles driven have been declining largely due to reduced spendable income which is largely the result of rising tax burden.
Just thinking about taxes coming to a legislature near you. Keep your eyes and ears open.
- Category: Letters
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