New Tax? Drive More Miles, Pay More Money

gas tax

Someday, not too far in the future, you might be taxed on how far you drive.

It would be a radical shift away from a system in which motorists are taxed by state and federal governments for each gallon of gas they buy. That money is then used to maintain the roads and bridges everyone uses on a daily basis.

The problem is that today's cars are more fuel-efficient than those in the past. These vehicles take up the same space on highways and beat up roads just as much as yesterday's gas guzzlers, but don't generate as much in taxes because they use less fuel.

VIDEO: Gas and mileage tax plan

Now a $16.5 million study, funded by Congress, is looking at the feasibility of changing the tax structure for drivers. The idea is to eliminate the per-gallon gasoline tax and replace it with one based solely on how far a driver travels.

This system would allow states to tax drivers of hybrids and SUVs for their fair share of wear on roads and bridges.

Supporters of such a switch emphasize that the idea is not to charge people more in taxes but just to replace an antiquated tax system.

But convincing the driving public of that is no simple task. Reaction to such taxes so far has been lukewarm at best, and downright nasty at worst. Government officials who have mentioned the idea have generally backed down.

VIDEO: Taxing Your Miles

"It's invasive and it's got to be unconstitutional. It's just wrong in so many ways," said Janice Scarpitti, a Rhode Island resident upset about a now-dropped proposal in her state. "How much can they charge us for driving?"

Scarpitti is a home health care nurse and drives 300 to 400 miles a week. Her employer doesn't reimburse her for mileage. She said the government should focus on taxing discretionary items such as cigarettes and alcohol.

"Gasoline is a necessity. I don't have a choice about gas. You have to pay for it and you have to drive," she said. "I would have to tell somebody in the government how many miles I put on my car. That's not their business. This is still the United State of America and I wouldn't allow it.

"If they allow that, they will find a way to tax the air you breathe," Scarpitti said. "You have to stop the nonsense."

Questions About Privacy

For Jon G. Kuhl the question is: what level of privacy are Americans willing to tolerate under this system?

He heads the team of researchers at the University of Iowa's Public Policy Center studying the feasibility under the Congressional appropriation.

Last year, his team worked with 1,200 volunteers in Baltimore; eastern Iowa; North Carolina; Boise, Idaho; San Diego; and Austin, Texas. The volunteers were paid $895 to have wireless transmitters installed in their cars. The devices kept track of how many miles people drove and at what times.

The researchers then sent out various types of mock bills, showing people various levels of detail about their driving history. They are then surveyed about the bills.

Kuhl said Americans want a certain level of detail to ensure that they are being billed properly but not so much detail that it violates their privacy.

Compare it to your credit card bill. Most people are OK with their bill saying they spent, say, $115 at Wal-Mart on a certain date. After all, you want to ensure the bill is accurate. But most folks would not be comfortable to see the titles of the movies purchased and the size of the pants they bought on the credit card bill.

That's the balance that Kuhl is trying to find for the government.

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