CBO Sees Benefits in Taxing Motorists Based on Miles Driven

Friday, March 25, 2011
By Susan Jones

(CNSNews.com) - A new Congressional Budget Office study says taxing motorists based on the number of miles they drive would be a fair and "efficient" way to charge motorists for the real cost of using the nation's highways. "Vehicle-miles traveled" taxes (or VMT taxes) also would provide a strong incentive for people to drive less.

Transportation Secretary Ray LaHood floated the idea of a VMT tax one month after President Obama took office, but Obama’s spokesman immediately shot it down. "It is not and will not be the policy of the Obama administration," White House press secretary Robert Gibbs told reporters in February 2009.

But that was then.

The CBO study, released this week, says the federal government pays in part for about 25 percent of the nation's highways, which carry about 85 percent of all road traffic. Right now, federal spending on those highways is funded mainly by taxes on gasoline and diesel fuel, but those taxes do not raise enough money to support either the current federal spending on highways -- or the higher spending levels that some transportation planners advocate.

The CBO said most of the costs of using a highway, including pavement damage, congestion, accidents, and noise, are tied more closely to the number of miles traveled than to the amount of fuel consumed.

While raising fuel taxes would bring in more money, the CBO notes that a "fundamental" problem would remain: "By themselves, fuel taxes cannot provide a strong incentive for people to avoid overusing highways," the report said.

On the other hand, VMT taxes would have most motorists paying "substantially more than they do now -- perhaps several times more," the report said. "Such a system would maximize the efficiency of highway use by discouraging trips for which costs exceed benefits."

As for the costs of establishing and operating a nationwide VMT tax, CBO admitted that its estimates are "rough." Metering equipment would have to be installed in all cars and trucks, perhaps "under a mandate to vehicle manufacturers."

Full story HERE