If there is a consensus among economists on any issue, it is that maximizing economic welfare requires prices to match costs. But when it comes to the massive “18-wheeler” trucks that haul cargo over the country’s roads and highways, the taxes they pay to use roads don’t match the costs they impose.
As a group, these “Class 8” tractor-trailers do not pay their full share of the costs of using the nation’s highway system, in part because some cause significant pavement damage that their taxes do not cover. Yet, some in the industry are now calling for Congress to establish a pilot program for some states to allow six-axle trucks to carry 91,000 pounds, up from the current 80,000-pound limit.
While policymakers should support improving trucking productivity by allowing heavier, longer, and ultimately driverless trucks, heavier trucks cause more road damage that will be hard to pay for given existing sources of infrastructure funds. Thankfully, technology provides a solution. If Congress establishes such a pilot program for heavier trucks, it should also mandate that the trucks pay taxes per mile traveled, based on axle weight and type of road they are on.
A wide range of independent, scholarly studies clearly demonstrate that heavy trucks cause significant damage to the nation’s roads. According to a 1979 GAO study it would take 9,600 cars to cause the same payment damage as one five-axle trailer hauling 80,000 pounds.
To be sure, trucks pay significantly more in federal taxes than passenger cars (e.g., diesel, truck sales, and tire taxes), in part to account for this damage. But these taxes are not related to pavement damage. The existing heavy-vehicle use tax (HVUT) tries to get at this problem, but it is a blunt instrument, because it doesn’t adjust for the actual weight of the truck (including freight) or the type of road the truck is driving on.
Here’s where technology can come in. Technology exists to easily and relatively cheaply charge trucks by the mile, varying the charge by the axle weight and the type of road the truck is on. This vehicle-miles-traveled (VMT) system is simple. The truck receives a one-way GPS signal to allow it to identify its location, and an onboard computer that’s loaded with price-per-mile data for all roads in America. In addition, trucks would be equipped with wireless axle-weight sensors. These would let the onboard computer calculate an additional surcharge based on pavement damage (a formula that factors the type of road and axle weight). The computer would then remit taxes monthly to the federal highway trust fund and to every state it traveled through.
A VMT system like this would have huge advantages over the current taxing system. First, taxes would be more carefully related to true infrastructure costs. Trucks that do more damage to roadways would pay more. This, in turn, would increase transportation efficiency by reducing pavement damage, encouraging trucks to drive fewer trips with fuller loads, or encouraging shippers to use rail if it made more economic sense.
The trucking industry will oppose this idea, of course, because it doesn’t want to pay for the full costs it imposes. It has raised three main objections, but all can be addressed. One is that a VMT would be used to increase trucking taxes. But the truth is a VMT system can be used to generate more revenue, less, or the same, just as existing tax mechanisms can. How taxes and fees are collected is a separate matter from the amount policymakers determine should be collected.
A second concern is that a VMT system (like tolling) could encourage trucks to travel on side roads that would be less efficient for them. In fact, a truck VMT system would have the exact opposite effect. By pricing the segments of roads based on the total costs that trucks impose on them, trucks would have a stronger incentive to make the most economically efficient route choices. Moreover, a VMT system can be easily structured so it doesn’t double-charge trucks driving on tolled roads or bridges.
A third objection is that a VMT system would lead to double taxation. But this is avoidable. Any system should be designed to not charge a diesel tax when a VMT-enabled truck buys fuel. Likewise, the tire tax, HVUT, and vehicle tax should not be charged on trucks equipped with a VMT system.
I had the honor of chairing the congressionally mandated National Surface Transportation Infrastructure Commission, which stated in its final report to Congress that the ideal funding “framework should cause users and direct beneficiaries to bear the full cost of using the transportation system to the greatest extent possible.” Mandating a truck VMT system would be a key step in that direction.
Robert D. Atkinson (@RobAtkinsonITIF) is president of the Information Technology and Innovation Foundation, a leading tech-policy think tank. He was formerly chair of the National Surface Transportation Infrastructure Financing Commission.
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