Although conservative activists across the country gather today to throw "Tax Day Tea Parties," their anti-government zeitgeist is badly out of favor in Washington. President Obama and the Democratic majority in Congress have committed to increased discretionary spending on a variety of programs in the years to come and, coupled with their pledge not to repeat the Bush administration and congressional Republicans' budget-busting ways, they are going to be looking for new sources of revenue to keep the deficit down.
Highway and mass transit infrastructure spending got a lot of attention in the stimulus package -- President Obama just cut the ribbon on the 2,000th transportation project made possible by the stimulus funds -- and it will be getting a lot more with the Surface Transit Re-authorization bill due this year. While all Democrats and even some Republicans agree that highways and railroads need to be built and maintained for the economy to thrive, it seems that some Democrats, and even some administration officials, disagree about how we should pay for it.
Transportation Secretary Ray LaHood recently raised a kerfuffle when he suggested that the federal government should start paying for transportation infrastructure by taxing drivers for every vehicle mile traveled (VMT), rather than with the current 18.4 cent per gallon tax on gasoline. The White House quickly distanced itself from LaHood's remarks, saying that the president does not support such a move. And rightfully so. Taxing drivers for the amount they drive is both more difficult and less environmentally beneficial than taxing gasoline. To do it, you have to put mileage-calculating GPS devices in people's cars, which raises privacy concerns.
Also, taxing VMT means making no distinction between a mile traveled in a Prius and a mile traveled in a Hummer, even though bigger cars cause considerably more road damage. And anyway, if you are concerned about global warming you should be encouraging people to switch to more efficient cars, and one way to do so is by taxing gasoline. It is pollution, not traveling per se, that we should tax. Moving goods and services is not a bad thing, especially during a recession. Pollution, on the other hand, always is a bad thing.
The flimsy counter-argument is that VMT is a measure of wear and tear on the roads, so the people who do the most damage should pay the most for repairs. But VMT does not take into account the fact that heavier vehicles, such as trucks, which also tend to burn more fuel, do more road damage by virtue of their size and weight. So a gas tax may be as good a proxy for road-usage. You could partially correct this by creating different taxes for different weight classes of cars, but that would make the VMT even more difficult to implement.
LaHood is not the only politician with power over transportation policy who has raised the possibility of a VMT tax. Rep. Jim Oberstar (D-MN), who chairs the House Transportation and Infrastructure committee, dispatched a staffer to the recent Revitalizing Older Cities conference to say, among other things, that Oberstar supports moving to a VMT tax in the Surface Transit bill, which he will have a major hand in writing. Why is this odd idea catching on?