Monday, October 13, 2008

Should a mileage tax replace the gas tax?

Steve Berg recently posted an article on "Should a mileage tax replace the gas tax?" on MinnPost.com following the Humphrey Institute's roundtable on the German model of distance-based transportation finance.



Berg captured a primary argument for the mileage-based tax: "A stagnant tax rate on gasoline isn't the only problem. As fuel prices rise, people drive less, buy less gas and pay less tax. The move to fuel-efficient cars, including hybrids, also lessens the revenue flow." At the same time, national studies have shown that we are significantly under-investing in transportation infrastructure in the U.S. A national commission shows the U.S. "spending about $225 billion a year on maintaining and building roads, transit, rail lines and other surface projects. Governments currently are spending about $90 billion. In other words, the country must find a way to increase its infrastructure investment by 2œ times in order to catch up."

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