CBO: Impose Mileage Tax to Raise Money for Bankrupt Highway Trust Fund
Posted By Philip Hodges on Jun 16, 2014 | 0 Comments
One reason gas prices are so high is that the Feds impose a tax of 18.4 cents per gallon on gas. It’s 24.4 cents per gallon of diesel. We’ve had federal gas taxes since the 50’s to pay for highways and bridges, but since 1983, they started diverting about 20% of gas taxes to go to a Mass Transit Account that is supposed to pay for public transportation like buses and railways. So, those of us who don’t use mass transit are paying for those that do in the form of gas taxes. That’s socialism for you.
We’ve had the 18.4-cent per gallon tax since 1993 under the Clinton administration. Nowadays, with the further destruction of the dollar, that 18.4 cents just doesn’t buy what it used to. Now, the Highway Trust Fund (which includes the Mass Transit Account) is facing insolvency.
Some credit the loss of revenue to the fact that many are using more fuel-efficient cars and therefore not spending as much on gas. Isn’t that what Obama wanted? For people to use more “green” energy? And now, the Highway Trust Fund is out of money.
That could be part of it, but billions of the gas tax revenues are used to fund pet mass transit projects, which those who drive cars generally don’t even use.
Whatever the cause, the CBO is once again suggesting scrapping the gas tax altogether. Sounds good so far, but they’re wanting to replace the gas tax with a pay-per-mile scheme. Here’s The Blaze:
The Congressional Budget Office released a report this week that once again raises the idea of taxing drivers based on how far they drive, in order to generate more revenue for federal highway programs.
One option for raising money, the report said, its to create a “mileage-based user fee to raise revenues.” The report seemed to defend this option, by saying it “could lead to more efficient use of the transportation system.”
CBO imagines collecting the tax by fitting each car with a device that tracks how far the car has gone. That data could be read electronically whenever someone uses a toll or stops at a service station for gas.
Democrats in particular have raised the idea of a VMT system over the last few years, as it has become increasingly clear that the highway trust fund is about to run out of money.
Many seem to agree that the increased fuel-efficiency of cars has made it harder for the government to raise money via the gas tax. That 18.4 cent-per-gallon gasoline tax has also note been increased for years, not even for inflation.
CBO said if the tax were adjusted for inflation, drivers would see a 30 cent-per-gallon tax today.
In the House, GOP leaders favor a plan cut out Saturday mail delivery to find short-term highway money.
Few members have talked openly about imposing a VMT tax. Late last year, Rep. Earl Blumenauer (D-Ore.) proposed a VMT tax, and said it would create a more stable funding base for federal highway projects.
In the past when the Highway Trust Fund ran out of money, they would just take money from the General Revenue Fund. If the federal government has to pay for highways and bridges, maybe they should just cut spending elsewhere and use the General Revenue instead of levying such heavy taxes on Americans, a fifth of which is used to pay for things that drivers don’t even use. With the economy the way it is, and with people’s paychecks going down, now is not the time to raise even more taxes on drivers.
The federal government could at least eliminate the Mass Transit Account, which is funded by our gas taxes. Writing for Reason magazine, Tim Cavanaugh pointed out that the Mass Transit Account hasn’t convinced more people to ride public transportation even in the past 30 years:
“According to American Public Transportation Association, Americans in 1983 took 8.2 billion transit rides. In 2008, the last year with complete statistics, we rode the bus, commuter rail, paratransit, heavy rail, light rail, trolley-bus, or “other” 10.5 billion times. The Census Bureau has 1983 U.S. population at 234 million and 2008 U.S. population at 304 million. That comes to 35 rides per American in 1983 and 34.6 rides per American in 2008. “
If states want to have public transportation, they should raise their own revenue and pay for it themselves instead of taking federal highway funds to build it. As for paying for highways and roads, we could cut hundreds of billions of dollars from any number of wasteful alphabet agencies and put those funds toward domestic infrastructure and not have to impose one penny of gas taxes to fund it. This is the kind of nonsense that should always be expected when government is handed over the reins to run anything. All they know how to do is tax and spend.
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