In a recent Op-Ed in the New York Times, Professor Michael Webber of the University of Texas addresses the very real problem of financial shortfall to the Highway Trust Fund, which is funded by the federal gas tax. Federal level gas taxes have not changed since 1993. As cars become more fuel efficient, we go to the gas station less, and thus we pay less in gas taxes. As a result, we have a decline in the conditions of many of our roads, bridges, and highways.
Professor Webber suggests that an increase in the gas tax may be politically untenable. He may be right, though faced with objective reality, politicians may eventually agree to an increase in gas taxes. This is because driving on poor roads, bridges, and highways creates an inherent tax on you and me as the driver. This inherent tax comes by way of increased wear and tear on our cars, which means more time and money spent at the mechanic. Either way, we’re paying for it already.
The solution, according to Professor Webber is a “ton mile” fee based on how far cars travel and how heavy they are. He suggests that this fee could be assessed during an annual sticker renewal or inspection that is conducted at the state level. While Professor Webber’s proposal adequately addresses the issue of the user pays principle, the reality in implementing such a proposal at the state level would be complex and create a potential administrative nightmare, thus violating one of the key tenets of good tax policy.
The reality is that every state has different laws governing inspections. Some states may require inspections for all vehicles every year, while many states grant exemptions for new vehicles. Some states also exempt vehicles that are 25 years and older. Implementation of Professor Webber’s proposal would create an administrative nightmare from a state perspective, but also require some level of self-reporting by those who are exempted. More paperwork in this day in age is not a good thing.
Professor Webber also fails to mention that the trucking industry already pays a user fee in the form of a heavy vehicle use tax, which was largely designed to compensate for the effect of heavy vehicles on roads, bridges, and highways. Under Professor Webber’s proposal, would the trucking industry be exempt from the “ton mile” fee?
The “ton mile” fee is a good idea. Implementation, especially at the consumer level as proposed by Professor Webber would be complex and create an administrative burden. Perhaps, a good solution would be to have a “ton mile” fee collected each time we renew our annual auto insurance policy. What do you think Professor Webber?
