The Senate’s Vehicle Miles Traveled Tax is bad for our health
Buried inside the 2,700-page, $1.2 trillion infrastructure bill that just passed the Senate is a program to put in place a national tax on vehicle miles traveled.
Secretary of Transportation Pete Buttigieg has spoken publicly about this initiative, explaining that additional tax resources are needed by the federal government to continue to maintain and expand our transportation infrastructure. Their vehicle miles traveled tax would involve some form of monitoring of how much people drive (through electronic means or self-report) and require every American to pay a tax proportional to those miles. At the heart of this program is a claim that Buttigieg and others are making: Owners of exceptionally efficient or electric-only vehicles should shoulder their fair share of the cost of transportation expenditures, which they generally do not because of their reduced payment of gasoline taxes.
Presently, the 18.4 cents (or 24.4 cents for diesel) per gallon gas tax generates over $30 billion annually to help pay for a range of highway, rail and other transit costs. In inflation-adjusted dollars, that haul appears to have been falling since 2000, and critics worry that our increasingly fuel-efficient vehicles, move towards fully electric cars and a decline in overall car use threaten the fiscal future of national transportation funding.
That logic fails in several respects. State and federal policy leaders have been trying to incentivize the move to fuel-efficient and electric cars for decades, providing tens of millions of dollars in tax breaks and even more in research, development and other support for car companies. Those moves have worked, and Americans are increasingly driving hybrid and electric-only cars, reducing emissions and curbing gasoline consumption — accomplishing key goals of the Biden administration. Imposing a new Vehicle Miles Traveled (VMT) tax would likely flush away all those prior investments in efficiency and remove much of the incentive for someone to purchase and operate a hybrid or electric-only car.
While a decline in driving might worry Washington bean counters, many of us who live amongst cars are thrilled. Cars and trucks are a menace to our communities, some arguing that the deaths and injuries they cause are nothing short of an epidemic. The National Safety Council estimated that more than 42,000 people died in motor vehicle crashes last year, the highest figure in years. The current gas tax already discourages driving: the answer for the U.S. DOT is to simply increase the gas tax and get more cars off our roads.
The gas tax has been shown in numerous research studies to be an effective policy tool that discourages driving and encourages the use of public transit. If the U.S. DOT needs more money, then they ought to seek out congressional support for raising the gas tax — it has not increased since 1993. The more the federal government increases the gas tax, people will likely drive less (good for our health) and the more likely they will drive fuel-efficient or electric-only vehicles (good for the environment). Create a brand new, national-level taxation system based on vehicle miles traveled and you will discourage the use of environmentally friendly cars and do nothing to actually make us safer from the hazards of cars and trucks.
Justin B. Hollander is a professor in the Department of Urban and Environmental Policy and Planning at Tufts University and the co-editor of the 2021 book “Urban Experience and Design: Contemporary Perspectives on Improving the Public Realm.”