Thursday, May 5, 2011

Obama Wants to Tax Us by the Mile Even if We Earn Under $250k

Remember that Beatles song about the taxman? “If you drive a car, I’ll tax the street.” Well, that’s just about what the Transportation Secretary has proposed.

Bad ideas never die in Washington. They don’t even fade away. As proof, see the third effort in the last two years by the Obama Administration and members of Congress to tax us on every mile we drive. A larger issue is that the Administration ignores the core problem: using the federal highway program for wasteful spending projects.

The so-called vehicle miles tax (VMT) was first proposed by Obama’s Transportation Secretary Ray LaHood back in February of 2009.

A few months later, then-Chairman of the House Transportation Committee, James Oberstar (D–MN), backed the idea, too.

What we wrote about this idea is as valid today as it was then:

The VMT would fund transportation projects and increase conservation by increasing the cost of driving. It is unnecessary, however, because the gas tax already accomplishes these tasks—and is much cheaper to administer. A VMT would be expensive to implement because every car would need to be fitted with a device that both records miles driven and transmits the information to a government database. This complicated system would cost millions and raise concerns of big brother watching our every movement.

Americans don’t like paying the gas tax, but they are sure to be even more unhappy having to deal with the administrative nightmare the VMT promises. Secretary LaHood would be better served coming up with a plan returning responsibility for transportation funding to the states where it rightly belongs.

Of course, this is completely counter to the Administration’s push to get people in more fuel-efficient vehicles. A hybrid vehicle driving 20 miles would be taxed the same as an SUV driving 20 miles. The questions then become: Is a driver’s impact on highway infrastructure proportional to miles driven? Is vehicle weight a more appropriate measure? Should the government charge bicycles as well? Would this actually replace the federal and state gas taxes, or would it become an unnecessary additional revenue source for the government to fund transportation boondoggles such as Obama’s rejected high-speed rail and livability programs?

The priority for the Administration should be to fix the federal highway program. As Heritage Senior Research Fellow Ron Utt points out, motorists and truckers only get back about 65 percent on their user fees and taxes, with the rest being diverted to a growing collection of pet projects.

One clear example is the Livability Communities Demonstration Grant Program, in which Secretary of Transportation Ray LaHood defines livability as:

…being able to take your kids to school, go to work, see a doctor, drop by the grocery or post office, go out to dinner and a movie, and play with your kids in a park, all without having to get in your car.

In other words, how can we use taxpayer dollars to get more people into buses, trolleys and trains? Eliminating wasteful spending from the federal highway program should be the Administration’s first priority, rather than finding different ways to tax Americans.

One wonders what’s next on the LaHood/Obama agenda. Taxing our feet?

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