Published on June 27th, 2013 | by Christopher DeMorro
One Drawback of Fuel-Efficient Cars? Higher Gas Taxes
The Federal Highway Fund has had a budget shortfall for decades, owing mostly to the fact that the Federal gas tax hasn’t budged since 1993. That alone was bad enough to cause our infrastructure to fall trillions of dollars behind, and new more fuel-efficient cars are only compounding the problem. This has Transportation Secretary Ray LaHood looking at options that include higher taxes and tracking miles driven.
Between 2012 and 2013, the Congressional Budget Office estimates that the highway fund is about $110 billion short, and that doesn’t even account for the trillions in neglected infrastructure improvements across the country. LaHood has floated the idea of taxing vehicles based on miles traveled before, but the idea is gaining new traction among politicians looking to bolster Federal coffers. Some states have even floated this idea on their own, though implementing such a system would be quite expensive and difficult.
To make up the budget shortfall, politicians would either have to raise the gas tax by between 30 and 46 cents per gallon, or establish a method for tracking and taxing annual miles driven. This “miles driven” tax would cost between 0.9 cents and 2.2 cents per mile. This would cost the average driver between $100 and $260 per year, and would require GPS tracking devices in every vehicle.
That makes taxing vehicle miles traveled essentially a non-starter, which really leaves only raising the gas tax as an option, though lower tech methods of tracking mileage (like an annual mileage “check up”) could be employed. Higher gas taxes are an inevitability though, and even Bob Lutz thinks gas prices should be higher. But with the nigh-unworkable political climate in Washington D.C., it may take a few more bridge collapses to convince politicians and the public that a higher gas tax is an absolute necessity.