This is a Good Idea?

Submitted by R-Squared Energy Blog

Regular readers know that I would be strongly in favor of increasing gasoline taxes in exchange for income tax credits. I think such an idea would be politically palatable, provided it is clearly communicated to everyone that 1). If they make efforts to conserve, this system would be better for them financially; and 2). Higher gasoline prices will push us in the direction of less energy dependence by encouraging conservation and alternatives. Those who love the idea of energy independence and hate the idea of sending our dollars to OPEC should love the idea of changing our tax system in this way.

But some have a different idea of changing the way we are taxed:

Transportation Secretary LaHood eyes taxing miles driven

WASHINGTON, D.C. — Transportation Secretary Ray LaHood says he wants to consider taxing motorists based on how many miles they drive rather than how much gasoline they burn – an idea that has angered drivers in some states where it has been proposed.

A tentative plan in Massachusetts to use GPS chips in vehicles to charge motorists by the mile has drawn complaints from drivers who say it’s an Orwellian intrusion by government into the lives of citizens. Other motorists say it eliminates an incentive to drive more fuel-efficient cars since gas guzzlers will be taxed at the same rate as fuel sippers.

Yeah, count me among those who would say that. While it doesn’t eliminate the incentive to drive fuel efficient cars – after all, there is still the matter of the gasoline bill itself – it does remove some of the incentive for choosing fuel efficiency. It also decreases the incentive for choosing alternatives to gasoline-powered vehicles. It seems inherently unfair that the person who drives the new Ford Fusion hybrid should pay the same road taxes as the person who drives a Hummer. I want to encourage people to drive the Fusion.

Besides a VMT tax, more tolls for highways and bridges and more government partnerships with business to finance transportation projects are other funding options, LaHood, one of two Republicans in President Barack Obama’s Cabinet, said in the interview Thursday.

“What I see this administration doing is this – thinking outside the box on how we fund our infrastructure in America,” he said.

I am all for outside the box thinking. But let’s be clear: There is a reason ideas are outside the box, and sometimes it’s because they are just really bad ideas.

LaHood said he firmly opposes raising the federal gasoline tax in the current recession.

Think for a second about what he is saying. He opposes raising the gasoline tax. Why? Well I presume he would say that he doesn’t want to increase people’s tax burden. OK, then why do you propose to change taxes on the basis of miles driven? Is it to raise less money? The same amount of money? No, you are trying to raise more money, because there have been shortfalls as people have reduced their consumption:

Among the reasons for the gap is a switch to more fuel-efficient cars and a decrease in driving that many transportation experts believe is related to the economic downturn. Electric cars and alternative-fuel vehicles that don’t use gasoline are expected to start penetrating the market in greater numbers.

Further, you are going to increase the costs of vehicles by requiring the GPS chips be installed. But I guess it could make it much easier to give speeding tickets. Imagine with a GPS system in your car just how easily it would be to catch speeders. Surely we can all embrace a system that could be utilized to send you a speeding ticket any time you drive 2 miles an hour over the speed limit.

Am I off base here? Someone convince me that this is a good idea. I think people are going to be much more resistant to this than what I have proposed.

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