I don’t get the Vehicle Miles Traveled (VMT) tax. Let’s assume we want to tax auto travel because there are costs not captured by the act of buying gasoline: (a) the burning of a gallon gas releases carbon, which contributes to global warming, as well as pollution more generally. It may also increase tensions related to international security. This can be captured in a gas tax. There is also (b) driving causes wear and tear on the roads, and heavier cars cause more wear and tear. There is also congestion on roads, which we expect since roads are a commons and people are prone to over-consumption.
The argument is that we should have a “vehicle miles traveled” tax to capture (b). However weight causes wear and tear, and weight looks like it is just a function of mpg:
(Source) If we know the mpg of a car, we know with a high probability the weight of the car. So if we want to tax weight, we should be able to just capture that by taxing the mpg – which is taxing the gasoline used by the car.
Now there are hybrids and electric cars out there – they sneak off that line there and cause more damage to the roads relative to the gas they burn. But from a quick google search, only 3% of cars/trucks sold in 2007 were hybrids, broadly defined. As a fraction of current auto stock, it’s going to be even less. Hybrids get about a third extra mpg relative to size, I’d estimate. So that’s a 33% margin on 1% of the auto stock that is escaping paying a tax on (b) above.
Is it worth the cost of setting up this taxing regime? Do we really want to have to force everyone driving to have a subpoena-able device tracking my car – or force them to go to the DMV another time every year to get their government-allocation of driving miles checked by a bureaucrat? Obama wisely said this was not being looked into; however Oregon appears to be considering it. I hope they don’t.