Vehicle Mileage Tax Tested In The Netherlands: Saves Money, Reduces Congestion

Taxes are crazy. Is it better to raise them or lower them and on whom? What should be taxed and what should not be taxed? The debate has raged in the United States for generations. Other nations have their tax problems too but are looking at solutions, such as the Netherlands, where IBM has just completed vehicle mileage tax (VMT) test program.

Certain taxes in the United States go to pay for the maintenance of America’s roads and bridges. However, it is no secret that America’s roads and bridges are in a horrible state of disrepair—the taxes that are in place are just not doing the trick. A VMT could potentially fix that dreary fact and the model of such a tax is happening in the Netherlands and headed by IBM.

IBM has designed a system that is installed into the dash of a car. The system calculates a charge for each car trip by using a mileage based formula. The system is connected to a GPS device and wirelessly to the Internet. The system also takes into account fuel efficiency and the time of day of the car trip. At the end of each month the driver would receive a bill in the mail detailing the distance and times and thus cumulating into a charge—not unlike a cell phone bill. This was a six month trial so participants in the trial of the system did not have to pay any money during the trial period.

IBM noticed some very interesting results. When people are being “taxed” to drive their car it turns out that driving behavior changed and for the better. IBM saw a driving improvement in 70% of the trial drivers. The driving improvements came in the form of avoiding congested highways, not pushing a car hard and thus using more fuel during drives, and a vast increase in using GPS to plan out more fuel efficient routes.

IMB predicts that a full on VMT would make a 58% decline in traffic related delays, a 10% reduction in overall carbon admissions, and a 6% increase in public transportation ridership, which in the states might just lead to more problems. On a psychological level it seems that people have short attentions spans, the high price of gas is a problem when one is filling up but soon forgotten after the driver continues on their trip. Yet, when a person is glancing at a mileage meter that is constantly ticking up, that mileage meter servers as a constant reminder of the cost of driving and thus the driver takes measures to lessen the economic blow.

This type of driving tax seems crazy and there is no way that something like this could happen in the good old U.S. of A. Right, seriously right?

Actually, Oregon has proposed a system that would charge drivers of only electric and hybrid cars $0.85 cents a mile through 2015 and then jump to $1.85 cents by 2018. The idea behind this electric/hybrid car fee is that those types of vehicles use less or no gas than regular vehicles. That is good for the consumer, less pain at the pump, but that means less revenue for states from their gas taxes. This charge for mile on electric and hybrid cars would, supposedly, offset the loss of gas tax revenue. For now the Oregon legislation has been stalled but other states like Texas and Minnesota are looking into similar programs.  It should be noted that Oregon currently has a $.30 per gallon gas tax.

An attack on the green auto movement or a necessary evolution? Sound off!

Source: infrastructurist.com

Andrew Meggison was born in the state of Maine and educated in Massachusetts. Andrew earned a Bachelor’s Degree in Government and International Relations from Clark University and a Master’s Degree in Political Science from Northeastern University. Being an Eagle Scout, Andrew has a passion for all things environmental. In his free time Andrew enjoys writing, exploring the great outdoors, a good film, and a creative cocktail.

 

 

 

 

Andrew Meggison

Andrew Meggison was born in the state of Maine and educated in Massachusetts. Andrew earned a Bachelor's Degree in Government and International Relations from Clark University and a Master's Degree in Political Science from Northeastern University. In his free time Andrew enjoys writing, exploring the great outdoors, a good film, and a creative cocktail. You can follow Andrew on Twitter @AndrewMeggison