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Classified Autos

Gas tax or road tax? Electric cars recharge an old debate

Opting for one tax over another may feel like a choice between lesser evils. Yet a simple device may solve two problems at once, fixing our broken highway funding system and charging electric cars for their fair share of road costs.

The root of the problem is the gas tax, which hasn’t been raised in 20 years. Consider what car you were driving 20 years ago. The tax is set at 18.4 cents a gallon, which at this time 20 years ago accounted for about 17.5 percent of a tank of gas. Currently, at $3.28 a gallon, only 5 percent of the price of a gallon goes to stupid taxes. Had it been last year, when gas prices were at $3.50, we would have been winning even more. More gas, less tax,

Wait, so where is all this money going? It’s not going to American roadways.  

The Highway Trust Fund is broke, or borrowing from other general taxes, to pay for the shortfall of decreased tax revenue brought on by the age of fuel-efficient vehicles and people consuming less gas.

In 1957, in tandem with the Interstate Highway System, gas tax revenues went into the Highway Trust Fund. Back then people wanted roads and they were willing to pay for it; it was a popular tax (oh sweet oxymoron!).

Jump ahead two generations later to a Congress too afraid to do anything but bicker and blame, and we have a tax rate that hasn’t changed since 1993. Interesting to note that is the year of our contemporary involvement to help democratize the Middle East. The complexities our Congress must face!

But the reductive is seductive: In 1990 and again in 1993 Congress approved an increase only to funnel half of it into deficit reduction, according to Joseph Thorndike writing in Forbes.

The point is, the system is broke and there’s no way to fix it without a major overhaul. Even if Congress had made the tax a percentage per gallon, it wouldn’t have allowed for the current innovation of electrification. Electric car owners, or plug-in vehicles that don’t need much gas, can use the roads all they want without having to pay the gas tax.

Charging plug-in car owners a one-time or annual fee would counter the government’s incentives to get more fuel-efficient vehicles on the road, and still wouldn’t fairly represent road use.

But now there’s a device to solve the problem of taxation with vehicular representation. Essentially, it is a black box that charges users based on the mileage they log. Oregon, Washington and Nevada have launched pilot programs. California and New York City are looking into a solution. And the I-95 Coalition, which represents 17 state transportation departments on the East Coast, are figuring out how to make the system work, according to Evan Halper in the Los Angeles Times.

The U.S. Senate approved a $90 million project involving 10,000 cars, Halper writes, but it never made it through the House.  

C’mon, man, even Illinois is on board! A state less known for innovative thinking than innovative road taxation, Illinois is testing a limited program on trucks.

The size of a garage door opener or an I-Pass transponder, the black box device could fit anywhere on your car. It likely would work like a transponder in that there would be toll sensors to go through on interstates. Otherwise, why couldn’t you just deactivate it when you drove?

Economically, it makes sense to be taxed for what you use. I.C.E. Dad would approve.

The technology is there but the trust is not. If the device has GPS, as many of the pilot program cars had, then it becomes a tracking device, which might cause a bigger uproar than increased gas tax.

Halper cites other sources who say a device can be simplified to just report miles every so often so you can’t be tracked, or it can be supercharged to include real team driving info and ability to pay parking meters and other driving-related nuisances.

Would it supplant the gas tax and state and federal tolls? Would it be more convenient for the user? Would it be mandatory on every car sold and, if so, how can the government keep track of 250 million vehicles when it can’t even launch a website? Would there be overlap between states or would the federal government take it on?

It raises a lot of questions but it also solves a big one. The system seems inevitable; it’s more a matter of how, not when.

Twitter @dufferrobert

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