Of Mileage and Gas Taxes

Jeff Alworth

I was pondering the question of the Governor's proposed mileage tax yesterday while listening to the rebroadcast of Think Out Loud.  Because they are both related, the mileage and gas taxes are often discussed together.  But, based on my pidgin economics, learned mostly on blogs, this seemed backward.  Shouldn't you first ask what you're paying for and what behavior you want to promote?  So I went to a econ blog and lo, the blogger was asking the same thing:

If you are proposing Pigovian taxes, then both make sense but address very different things.  Driving a car imposes external costs through the impact on the environment, through the wear and tear on the roads and through the time cost of congestion.

A mileage tax addresses the wear and tear issue.  People who drive will be assessed a tax that is equivalent to the cost of the road wear they are responsible for....  The gas tax is Pigovian in addressing the environmental impact of the amount of carbon emitted which is exactly related to the gas used.

It is clear that each tax is also a poor way to address the other issue, to wit: a gas tax is not a good way to address wear and tear because a Prius could do a lot of wear and tear with little gas and a Mustang could do little wear and tear with a lot of gas; and a mileage tax doesn't work, for the very same reason, as a way to address environmental impact.

But even if you're clear which about objective you're targeting, there are other ramifications. Take the mileage tax.  People are innately queasy about having a government agency tracking their car--and reasonably so.  What happens to this info?  Who controls it and who can access it?  Another feature of this proposal involves taxing you more for driving during rush hours or in congested traffic.  Is this a reasonable penalty for people who already feel penalized by being stuck in traffic in the first place?  Presumably, they'd avoid the congestion if it was avoidable.  What behavior do you hope to incentivize here?

The gas tax, which is less complex, nevertheless has complications.  On the green side of the ledger, it's a no-brainer.  It acts as an incentive for people to drive more fuel-efficient cars or drive less.  It penalizes those who use gas-guzzlers proportionately.  But on other sides of the ledger, it's not so great.  As lower-income people are forced further outside of the city core, transportation costs are borne disproportionatley by them.  And it effectively amounts to a tax on rural residents who have no access to public transporation.  It's true that the correlation between carbon production and taxes are directly relational, but again, are you penalizing people who can't change their behavior?

Hmmm.  Your thoughts?

  • SCB (unverified)
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    My wife and I just had this discussion over lunch. We live in a small town in rural Central Oregon. Due to my work that requires travel in the region, and due to costs, we have always opted for a "compromise" family fleet.

    We have one car (we've owned it since 1987) that gets 45 MPG, but it's an uncomfortable car for long trips and its too light for winter ice driving. My wife will drive it to a weekly class she takes in Bend, 40 miles one-way. It's otherwise our "back-up" car for when others are in the shop (there isn't a car-rental place here). This vehicle gets about 3% of our annual use.

    We have another that is specifically for winter and back roads. Its a 10 year old Subaru Forester with full time 4-wheel drive that has year-around unstudded snow tires. It gets 28 to 30 MPG, replacing five years ago a Jeep that got 18 MPG if the wind was blowing the right way. This vehicle gets about 35% of our annual use.

    Then we have the "long-haul" car. It is a compromise between room for four adults, ease of driving, road stability, and MPG. It is a 3 year old Toyota Camry that gets on average about 32 MPG. This vehicle gets then the rest of our annual use, about 62%.

    So, how would various taxes hit us? The existing gas tax penalizes me for driving safely. It I drove only based upon MPG, I'd drive the Toyota all the time. But it is safer to drive the Subaru on those horrible rock/dirt back roads that my job requires me to drive on. It is safer on snow and ice (like yesterday when I went to Fossil, and hit about 50 miles of ice on the 195 mile trip).

    A miles tax would leave me completely indifferent as to what vehicle I drive. I don't drive any miles I don't need to. Whether business, recreation, or visiting family - I would not drive one mile more or less based upon taxation. On those days when I am deciding what vehicle to drive to say, Burns (round trip 300 miles), I would pick the Subaru more in the winter than I now do due to safety concerns - which would actually have me burn a little more gas. But those occasional trips add up to less than 2% of my annual trips. Pretty much I'd otherwise use the same vehicles I use now.

    So, in a practical sense, I'd look at these tax packages as to what would cost me more. If a miles only tax cost me more, then I'd favor a gas tax over it. And the reverse is true too. A combined tax would be complicated to figure out, but given my grasp of how much I drive each vehicle, it could be done. -- Again, my motivation is to pay the least tax possible, so my support for various tax schemes will follow that.

    --- With one exception. If the miles tax includes a device that allows the Government to track where I am, or where I have been, then I will always oppose it. I don't mind if they track how fast I am going. However, if the Government thinks that going 8 miles an hours is a consequence of traffic congestion - well, they are just wrong. The only time I drive 8 miles an hour, and this comes up four or five times a year, is when I am on a god-awful back road doing my job. Sometimes if the rocks are bad enough, I have averaged one mile per 10 minutes (6 MPG) - only twice my walking speed. Giving me a tax penalty for that would be nuts.

    We need to remember that any taxing scheme needs to work both rural and urban.

  • Ukalelie (unverified)
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    I was in a meeting earlier today that claimed that suburban people drive more than rural folks -- that is, rural folks may make a few long trips but on average drive less than suburban folks, who have to drive everywhere, and not necessarily to convenient things.

    Moreover, the proposed mileage tax would have a multiplier -- that is, include a factor for average fuel efficiency (i.e. pollution) of that model. So both are combined into one.

    Designing the perfect tax is really hard, and I think it makes the most sense to design the tax you want, and deal with equity issues separately (i.e. subsidize rural folks, etc. if you need to for equity's sake). Don't let the need to include everything in one mechanism trip you up.

  • sparrow (unverified)
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    As a progressive Democrat the best way to proceed is to have BOTH a mileage tax and a gas tax - and also add in an SUV tax. Nothing should go untaxed / unregulated.

  • sparrow (unverified)
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    Oh, I forgot to add that studies show that Black cars are more likely to be in crashes - especially at night. So adding an additional tax on people choosing a black car would be ok. Make it like $12 or so - then gradually increment it as we need money to fund other stuff - like light rail.

  • Doug (unverified)
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    The debate over the gas tax and mileage tax, and the differences between the two, are causing the transportation funding discussions to focus too much on behavior we want to promote or discourage. The far more important issue is how we pay for the construction and maintenance of roads. Currently, the state highway fund is sufficient to pay about 1/4 of the cost of maintenance. We are basically consuming past capital investments by letting the existing system deteriorate, while we continue to build more roads. It makes about as much sense as building an addition on to a house rather than fixing the leaky roof.

    At the local level, new investments in roads are funding by the property tax, with no connection whatsoever with extent to which the taxpayer uses the roads.

    The price a motorist pays to drive a mile is far below the cost of providing the service that makes the drive possible. This is extraordinarily inefficient. Imagine the choices consumers would make and what the demand for electricity would be if the electric utilities charged consumers 1/10th of the cost of generating the power and taxpayers were on the hook to pay the balance without regard to how wisely they were using energy.

    Government cannot keep up with the demand for roads any more than other producers could keep up with the demand for their commodities as long as the price charged for the service is so far below the cost of providing the service. The end result of this situation is that the service must be rationed. In the absence of a political willingness to adopted a rationing program, congestion is the default mechanism.

    Unfortunately, the Governor's ill-conceived funding plan does little to correct the problem. Instead of increasing the variable costs of driving, it will increase the fixed cost of vehicle ownership as a way to address congestion.

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    Both the mileage tax and the wear and tear tax contribute more to the cost of food that is transported long-distance by heavy trucks. Is that a desirable aim?

  • Will Neuhauser (unverified)
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    Jamais asks about the impact of gas / mileage taxes raise the cost of transportation thus making food that travels far more expensive ... and is that good?

    Well, the issue is that roads and green house gases cost. And the cost should be borne by that which creates the cost in order to know its true cost. That long-distance food costs in roads and green-houses gases is true and the cost of food should reflect that or we pay for it in some other indirect way.

    One of the our great 21st economic challenges is to a better job of "internalizing" previously externalized costs (polluting is free!) and moving closer to the contributor of the cost is a good thing in getting things to reflect their true costs much better. By being closer to true cost, less regulation should be needed to "enforce" internalizing the externalized costs.

    As someone else noted, equity issues can be dealt with an "add-ons" in the tax code, but it is a real mess when we depend on remotely generated financing (ie unrelated to the cost).

    First: do the right thing. Then work on equity.

  • Dave Porter (unverified)
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    The most important issue before our country is whether to enact a substantial, revenue neutral gas tax ($1/gal or more) to reduce carbon emissions, to reduce the flow of our funds to petro-states hostile to our interest, and to keep our funds in the US instead of buying oil abroad. It is the big, transformational issue before both President Obama and Governor Kulongoski. It’s part of getting back on our economic feet. Finding the appropriate user tax to support funding for highways and similar infrastructure for vehicles is a more limited issue. Given a gas tax big enough to shift the US off of gas-powered vehicles, Oregon would need to find another source of funds for highways.

    Tom Friedman is the foremost proponent of a revenue neutral gas tax. Under his proposal, revenues from a gas tax would be used to reduce the pay-roll tax (here). The NY Times and the Oregonian have both called for such a gas tax. Joe Klein, Michael Kinsley, and Andrew Sullivan all support one. Charles Krauthammer just came out for one.

    The auto bailout makes no sense without one.

    In my view, this is the issue that tests whether our democracy and our generations are ready for the 21st century. I know the politics of the issue are bad. That’s what makes it a big test.

    Such a tax would be disruptive. Of course, that’s the point. That makes it transformative, and we need to change. And, of course, it raises equity issues, but, I agree with earlier comments, those can be handled separately, as can how to fund roads.

    And, as I have said on my own blog (here): “Lots of public and voter education is needed. Oregon Democrats need to lead. The Oregon legislature needs to draft revenue neutral gas tax legislation, to hold hearings on it and to get the issue out for discussion, and then, if President Obama has not made a national gas tax proposal by the end of the 2009 session, to refer a revenue neutral gas tax measure to the Oregon voters. It’s the responsibility of the governing Democrats to do this.”

  • Jill Pearson (unverified)
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    My name is Jill Pearson, I work for ODOT and was the project manager on the Road User Fee Pilot Program. For accurate information and to learn more about the Road User Fee in detail, please visit our Web site at: http://www.oregon.gov/ODOT/HWY/OIPP/index.shtml

  • Doug (unverified)
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    The federal government may be able to enact a big revenue neutral gas tax and there certainly are excellent arguments for doing so. (However, given the debt that we are passing onto future generations, perhaps the tax should not be revenue neutral.)

    It would be a waste of time, energy, and political capital to pursue a revenue neutral gas tax at the state level. The voters have consistently rejected, by wide margins, changes in the state constitution to allow the use of highway funds for non-highway purposes. It is hard to imagine that are not more productive paths to follow than asking them yet again to amend the constitution and, in all likelihood, losing another two years of progress.

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    Whatever the merits, it's definitely piqued a national conversation. As I documented at LoadedO this morning, the original AP article was widely picked up, and other services like LAT did their own version of the story. The green and auto industry presses also covered it, and several in state papers also weighed in.

    I think the key thing to understand is that the mileage tax proposal is a long term solution to a longer term problem--how do we get revenue and eliminate gas as fuel simultaneously?

    For those worried about the GPS in their cars--I don't hear folks worried about what TomTom and Garmin are doing with our info, nor the transpo agencies with toll transponders...

  • SCB (unverified)
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    Torridhie (???) writes, "For those worried about the GPS in their cars--I don't hear folks worried about what TomTom and Garmin are doing with our info, nor the transpo agencies with toll transponders... "

    Hmm. I don't have and don't want a GPS in my car monitored by anyone. That's my choice. Now, we are talking about taking away a choice and putting in a government requirement. TomTom and Garmin don't get my information. I don't want the State having it either.

    Torrid whoever, you argument holds no water.

  • Greg D. (unverified)
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    I already wear a foil hat, now I need to put a foil hat on my car to keep Ted K from keeping track of where I spend my free time?

    I like simple. Raise the gas tax by a dollar or dollar-fifty per gallon. That will discourage driving, encourage use of mass transit, force people to consider purchasing high mileage cars, and reduce driving and therefore reduce wear-and-tear on the highways. Exempt off-road fuel use, as they now do, so that farmers, etc. don't pay extra tax on fuel for equipment used to raise and harvest food. Maybe reduce or exempt over-the-road trucks, as they are more or less a public utility delivering the necessities of life.

    Or you can screw around for the next five years trying to develop the "perfect" tax model. Perhaps charge a high fee to drive into Portland or downtown Bend or Eugene or Salem or Ashland between 8 am and 6 pm. I don't think we are there yet and it is very complicated to consider.

    Solidarity Forever.

  • Dave Porter (unverified)
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    @ Doug,

    I agree that the national level is most appropriate for a substantial, revenue-neutral gas tax. But what if the Obama administration punts and proposes nothing? I’ve heard of no such proposal leaking out. Then, in that case, how do we best promote such a national proposal at the state level. I submit that we put the issue as a state tax out to our voters. That way, win or lose, the issue gets attention. To do nothing is to lose two years.

  • mp97303 (unverified)
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    @Dave Porter

    Re: gas tax

    How would people who are not subject to employment taxes ( students/seniors/stay at home parents) be compensated for the increase in taxes? Mr. Flat Earth doesn't mention it.

  • Sherry (unverified)
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    And here we go again!We can't take another year like this past.The high cost of gas seriously damaged our economy.I just read a profound book called The Manhattan Project of 2009 by Jeff Wilson. Among the things I learned that fascinated me is that it would cost the equivalent of 60 cents per gallon to charge and drive an electric car. If all gasoline cars, trucks, and SUV's instead had plug-in electric drive trains, the amount of electricity needed to replace gasoline is about equal to the estimated wind energy potential of the state of North Dakota. Why don't we use some of the billions in bail out money to bail us out of our dependence on foreign oil? www.themanhattanprojectof2009.com

  • Dave Porter (unverified)
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    @ mp97303,

    Under Friedman’s proposal to reduce payroll taxes by the amount of revenue generated from a substantial gas tax, I do not think people who are not subject to employment taxes (students/seniors/stay at home parents) would get any tax breaks. Friedman’s proposal could be amended, of course, but I think it would be hard to match gas tax increases to tax breaks across all categories. A gas tax will hit rural communities harder than urban communities. Some businesses are much more dependent than others on gas based transportation. All that would suffer the most have been creating more of the problem. But neither life nor taxes are entirely fair. Reducing payroll taxes is slightly progressive and gives a slight incentive to employment. This change will not be easy. But, if we are serious about changing the direction of our country, some version of a substantial, revenue-neutral gas tax is necessary. No way around it. Put up or shut up.

  • Erik H. (unverified)
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    As much as I hate more taxes, I actually agree with the "mileage tax" plus "gas tax" concept.

    Mileage Tax is to maintain the roads. It's not a "green" or "environmental" tax. It's STRICTLY to maintain what we have. So, a Prius and an Focus will pay the same mileage tax since they are comparable vehicles, use the roadway in comparable ways, have the same impact on the road system... Your mileage tax would be based upon vehicle weight as well, so motorcyles/mopeds would pay the least in tax, while semi-trucks would pay the most. Yes, a Hummer would pay more than a Civic.

    I agree with the GPS system and I think it should track where you go - so that the tax is apportioned to the roads that you drive on. However, there needs to be extra legal precautions to ensure the information is used ONLY for that purpose...and there should be an "opt-out" option where someone can have a calibrated odometer installed that doesn't track location, and a pre-defined ratio of tax revenue apportionment based upon the vehicle residence. (To encourage use of the GPS system, someone that chooses the "opt-out" method might have to pay a surcharge...)

    Gas Tax is a pollution tax, and is applied to ALL fuel sales (so there's no more "red dyed fuel" credit for off-highway use. Railroads and aircraft will pay the tax; so will gas in your lawn mower, or in a car.) The Pollution Tax will be used to mitigate pollution issues - whether it be credits to wind farm producers, energy efficiency/weatherization programs, mass transit, whatever. So in this case, the Prius would pay far less than other vehicles (but a motorcycle would pay even less).

    It's a simple and most importantly FAIR solution.

  • conspiracyzach (unverified)
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    If Kulongoski loves GPS for every car let us put a GPS ankle bracelet on him so we can track him 24/7. He can be the subject of the "pilot project".

  • Zarathustra (unverified)
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    Oh, I forgot to add that studies show that Black cars are more likely to be in crashes - especially at night.

    but red cars are more likely to be falsely accused of speeding, so they already pay a "color tax".

  • David Wright (unverified)
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    Soooo... just so I'm clear on this... it's now the "progressive" position that those who actually use government-provided services/infrastructure more should somehow be obligated to pay more for said services/infrastructure???

    Fascinating. I'll be looking forward to the new tax structure proposals for funding most everything that government does in the future (but most especially schools...)

    ;-)

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    Rather than an expensive and possibly intrusive GPS and all the associated infrastructure needed to collect and crunch the data, why not just a tax on tires? Generally speaking, little or lightweight vehicles tend to use little tires, big luxo-cruisers and large SUVs & F350 trucks tend to use larger size tires, so an appropriate add'l tax amount for a particular tire size and/or style would fit the potential damage wrought by that vehicle. Tires have an expected lifespan (20K, 30K, 40K miles etc) so factor that in too. Drive more miles per year, replace tires sooner, automatically pay more fees. If you don't keep your wheels aligned, and you drive like Speed Racer on meth, the tires wear out sooner and you get to pay 'additional tax' when you replace them. Studded tires get a triple whammy, maybe chains too, for their destructive influence on the roadway. Alternative seasonal 'snow & ice' tires, (like Blizzaks) that don't cause extra damage (compared to studs/chains) get a tax break of say 33% to encourage their use. Cars based in nearby states, or brought in from elsewhere might require additional consideration. Lots of details but surely simpler than another electronic gadget that might be prone to failure or hackery. Hey, has Diebold got the contract for the milage tallying devices, I hear their products are reliable and bulletproof. Every car I ever saw on the road uses tires, they need replacing periodically, so maybe this is a relatively simple way to collect a fee for maintaining the roads based on probable wear from any particular vehicle.

  • Frank (unverified)
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    No way, no how am I going to support the government being allowed to track my movements by GPS.

    Is Kulongoski planning to protecting that information from Dick Cheney the next time they try to seize that tracking information for one of the neo-cons Total Information Awareness programs? I somehow doubt it.

    Not only will I not support GPS tracking of citizen movements, I'll fight like hell against anyone who attempts to implement it.

  • James X. (unverified)
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    The mileage tax is such an intrusive way to collect taxes, it's like a bad joke about Democrats. I'm embarrassed by our governor supporting it. Just raise the gas tax. Then when gas use goes down, raise the gas tax again. Once this becomes unsustainable, tax whatever new fuel is being used or tax something else entirely. But don't put tracking bugs in our vehicles, that's so 1981.

  • James X. (unverified)
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    1. It's five in the morning.
  • Kurt Chapman (unverified)
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    The original post shows both the ying and yang of current tax policies. It is historically relevant that the gas tax was first imposed to help pay for infrastructure upkeep and maintenance. If one wishes to now impose social change through taxation then that is an additional justification and somewhat at odds with collecting taxes to pay for upkeep of roads.

    The proposed mileage tax patterns itself after the weight-mile tax presently paid by heavy duty trucks in Oregon. The difference being truck companies self report and Gov K would place a reporting device in our vehicles. The references to 1984, while accurate, are behind the times. Every cell phone has GPS tracking capabilities already.

    I could support a mileage tax IF there were a corresponding drop in the gas tax. Unfortunately I do not have faith that the new tax will have an offset in what the state currently charges for a gas tax.

  • Frank (unverified)
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    Kurt Chapman: "Every cell phone has GPS tracking capabilities already.

    That's not correct, Kurt.

    They cannot track your cellphone. They can track what cell phone company cell phone antenna your phone is being received on, and then try to triangulate your position if your signal is switched to a different tower. If your calls aren't switched, they only can tell you are somewhere in the range of that one particular tower.

    If you want to track the location of a car, person, or pet by GPS you need a system that's designed to do that like ...

    http://www.zoombak.com/

  • Jiang (unverified)
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    Posted by: David Wright | Jan 6, 2009 11:40:38 PM

    Soooo... just so I'm clear on this... it's now the "progressive" position that those who actually use government-provided services/infrastructure more should somehow be obligated to pay more for said services/infrastructure???

    Fascinating. I'll be looking forward to the new tax structure proposals for funding most everything that government does in the future (but most especially schools...)

    ;-)

    Since everyone seems to want to use the word "progressive" for bear baiting on here, I'll humor you.

    Yes, that would be easy to do. Remove the deduction (subsidy) for each child. Having children is a hobby. If your hobby were off road adventures in a 4-wheeler I'd expect you to pay more for those services too. And that's looking at it generously.

    Saying that it's just natural and normal for everyone to breed, regardless of the consequences of the behavior, is no different than saying it's normal for a woman to submit mindlessly to the carnal desires of her husband.

    This business that we're a highly advanced, intellectual society that finds ways to inject the basest animal instincts into those lofty goals will be the end of both. Choose. Biology or civilization. Likely we'll continue on as is. Cling to every last stupid primate assumption until it is destroying everything else in the picture, then reluctantly change as little as necessary. Look at civilization since the 1400s. Plenty of people held in esteem the logic you use today to support your mindless rutting. A very, very few thought like today's progressives. How many think more retrograde? How many more think what was called "progressive"? How long will it take for conservatives to realize that all they are trying to conserve is yesterday's stupid thinking.

    Don't give me "natural" BS either. Slavery was universal. Hunting nearby troopes because they look different is natural. Sexual relations between nuclear family members is practiced by most mammals. We've consciously decided to take over the wheel, though. We've decided those things aren't consistent with our vision of society. We need to fully take responsibility for where we're going, instead of grabbing the wheel whenever the car's about to go off the road, with climate change, population, conflict and the like. This is unlikely to happen. More likely those that espouse stone age values will get their ideal stone age world eventually.

  • Lani (unverified)
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    The mileage tax is an idiotic idea.

    The vehicle registration tax was $20.00 in 1950. Oregon has one of the lowest registration and licensing fee structures in the country.

    Economic Partnerships Unit The Economic Partnerships Unit of the Director's Office is charged with exploring and developing future funding sources for Oregon transportation systems.

    If a mileage tax is the best these people could do, how much do we save by getting rid of this brain trust?

    These fools ignore gas taxes, licensing fees, matching grants, transportation and useage fees at ports and airports, truck mileage fees, etc. They ignore any practical solution but go for a scheme that's probably impossible to implement by requiring GPS' in all cars and a massive data collection that isn't likely to work well.

    Dumb. Really, really dumb idea.

    Unbelievable.

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    Hmm. I don't have and don't want a GPS in my car monitored by anyone. That's my choice. Now, we are talking about taking away a choice and putting in a government requirement. TomTom and Garmin don't get my information. I don't want the State having it either.

    Don't kid yourself if you think the government isn't already well-equipped to track you down if they really want to. But you're missing the point--private tracking is already widespread, as are various forms of pseudo-government tracking devices like toll transponders and even stoplight or speed cameras. They know that you crossed MP 120 on Highway 9999 at 10:32:02PM on January 3rd. Knowing that you drove 40 miles somewhere in the vicinity of "here" is not that much different.

    By the time something like this would be implemented, I suggest that most cars will already have some form of tracking system on board, standard.

    Someone was asking if their gas tax would be reduced if they paid by mileage instead. As I understood the proposal, you'd get a refund on you 24c per mile gas tax, and pay 1.2c per mile instead.

    The bottom line: if you don't like the idea of a mileage tax, what alternative do you propose when fuel efficiency makes gas tax revenue completely unsustainable? Because that's what this proposal is about, fearmongering notwithstanding.

  • Frank (unverified)
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    Torrid Joe: "what alternative do you propose when fuel efficiency makes gas tax revenue completely unsustainable?"

    How about a car/truck TIRE tax?

    Gotta have tires if you're going to drive, and you need more tires if you drive more. You need tires on hybrid cars, biodiesel trucks, electric cars, or hydrogen cars, too.

  • Frank (unverified)
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    One more thing on a tire tax...

    A tire tax can be made higher on truck tires, studded tires, etc., anything that causes extra wear on roads.

  • Lani (unverified)
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    GPS is an OPTION on most new cars. What percentage of cars on the road today have GPS? 10? 20?

    You want to start another government coupon program to get these out on the road or just create another invisible tax to force people who can't afford it to add it to their cars? How much would this program cost to implement and maintain?

    You don't know and neither do the idiots who proposed this.

    And what about this brilliant idea from people PAID BY THE STATE to come up with these plans. We aren't getting our money's worth.

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    A tire tax could easily be avoided by buying tires in another state. I'm quite sure most Oregonians live within 50 miles of another state, and tire companies would pop up on the borders.

    Furthermore, a large tax on tires could discourage people from buying new tires when they need to for safety reasons.

    This post brought to you by the friendly people at Les Schw-ok, not really.

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    A tire tax would be prohibitive. A rough estimate of 20gal every two weeks is 520gal. At 24c per gallon, annual taxes would be about $130 a year. So if you replace your tires every four years (say), that's $500 in tax for about $400 in tires. Ever seen a product with a 120% tax levy? Me neither.

    Lani makes my point for me on GPS. It's already an option for 10-20% of cars; that means in 10 years they'll be standard. It wouldn't be that many cars to retrofit, and tech would likely vastly improve the cost/intrusion of the transponder.

  • Lani (unverified)
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    Torridjoe sez: Lani makes my point for me on GPS. It's already an option for 10-20% of cars; that means in 10 years they'll be standard. It wouldn't be that many cars to retrofit, and tech would likely vastly improve the cost/intrusion of the transponder.

    Now you're just making things up. No estimate for the cost or how you propose to force people to comply. Also, the state constitution has a privacy provision, so let's waste more money on lawsuits while we're implementing this brilliant piece of legislation.

    Instead of waiting 10 years for these fools to act how about bridge tolls, raising the registration and licensing fees (after 50 years you can justify it). Alcohol &/or other luxury taxes, increasing port fees, hotel taxes, rental car taxes, gas taxes, airport ticket fees, hotel sales taxes, parking charges, toll roads, bridge tolls, etc

    See, you didn't even have to pay me state tax dollars for the suggestions. Unlike idiots at the Economic Partnerships Unit at ODOT.

  • joel dan walls (unverified)
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    Well damn, but given that Jim Kaarlock hasn't popped up yet on this thread, someone's got to present his sort of quasi-libertarian argument, so WTF, here's a straw man: no gas taxes or mileage taxes. Instead, we need the Libertarian Fantasy State where the roads are privately owned and car owners pay usage fees to the owner of the roads. This is the kinder, gentler version of the sort of highway banditry that exists in some allegedly uncivilized parts of the world; main difference is that in the Libertarian Fantasy State, the fees are not collected at gunpoint.

  • SCB (unverified)
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    TorridJoe writes, "Don't kid yourself if you think the government isn't already well-equipped to track you down if they really want to. But you're missing the point--private tracking is already widespread, as are various forms of pseudo-government tracking devices like toll transponders and even stoplight or speed cameras. They know that you crossed MP 120 on Highway 9999 at 10:32:02PM on January 3rd. Knowing that you drove 40 miles somewhere in the vicinity of "here" is not that much different."

    It's always interesting to hear from a completely arrogant urbanite. On Monday, I drove 195 miles to a work assignment (round trip). In that trip, I drove through a total of 4 traffic lights, all in the first 3 miles while in my town. That is to say, of that 195 mile trip, there were no pass cameras, traffic light camera's, detection stations, transponders, or other stuff. Heck, my cell phone doesn't work for 95% of that trip due to no reception.

    I'm reminded of the paranoid vote people. There was once a proposal that every ballot box should have a webcam on it. In Paulina, 50 miles out from Prineville, there is a ballot drop box. The only cable going out there is an old copper phone line, and a lot of the people on that phone line are still on an old fashioned "party line". A webcam just isn't possible there. In similar fashion, Torrid Joe thinks that the entire world is like his world.

    Tell me Joe, it just ain't so.

    Proposals of Statewide law need to work for all geographic areas of the State. I know several ranchers that are driving 1970's vintage pick-up trucks (and even I have one, but its not running now). Assumptions that all vehicles are replaced every 10 years are false assumptions. Assumptions that technology reaches every corner of the State are false assumptions.

    The only point Torrid Joe makes that is valid is to ask, "if not the miles tax, then what?"

    I don't know. Few of us are in a position to have enough data in front of us to make a reasoned proposal. I don't know how many gallons of gas are currently consumed versus how many miles are currently driven in Oregon in a year like last year. I don't know how many tires are sold per year. I don't know how many vehicles have the existing hardware to support tracking miles.

    Personally, I'd like to see a blend, possibly with options. I would like to keep the gas tax. I would like people to be able to self-opt for a miles tax in lieu of a gas tax, but I don't know how that would work, as the gas tax is at the pump. I wouldn't mind a small tire tax. But keep in mind that even from here in the middle of Oregon, if such a tax is too high, I just might buy my tires when I am otherwise out-of-state on other business - thereby avoiding the tax.

    Commerce is a part of all of our lives, urban and rural. What I buy at the store most likely got here in a truck, and the same is true in urban areas. The roads and bridges under those trucks are therefore something we all depend upon. I would be okay with any new tax or revised tax scheme that helps support all the State's infrastructure. As it is now, we are depreciating the State for lack of funds. Depreciation is a real cost, delayed to the future. If we don't spend money now on what is needed, we will pay more later.

    It's really time that we were all "adults" and realized we just have to raise some new revenue to make it all (schools, jails, prisons, senior services, roads, foster homes, parks, the zoo, etc. etc.) work. We are well past the belt tightening phase that the likes of McIntire and Sizemore forced upon us. At a certain point, belt tightening becomes choking. We are at that point.

    We need new State revenue. I'd rather not pay it, but it looks like I and we need to.

  • RichW (unverified)
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    How about a tax on used tires. That should satisfy the flat-tax proponents!

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    We should some combination of a mileage tax and a gas/carbon tax.

    To help lower income people, we should have some kind of rebate or assistance targeted towards them.

    The full cost of goods and services should be reflected in their price, in order to capture all externalities. Targeted assistance should be targeted to the poor after the fact, rather than attempt to subsidize things for rich and poor alike out of concern for the poor.

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    A weight/mile tax without any GPS usage would be the most fair and the easiest.

    A "black box" in every vehicle would record mileage mechanically.

    Change DEQ inspection to an annual event, and make it universal, with the black box mileage read by DMV employees each year and a tax assesed based on a multiplier of vehicle weight.

    Lighter cars typically (but not always) get better mileage and do less road damage. Studded tires get taxed separately and you could make that one a sliding scale based on tire size too......

    The Big Brother problem goes away and I get to use my passive GPS without fear of gummint intrusion. Only GPS that gets real time updates on traffic or allows voice communication (like On Star) is easily trackable.......

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    Pat makes a really good point which had never dawned on me - recording mileage some other way.

    Mechanically certainly would work. But the modern speedometer wiring could be tapped as well and still avoid the pandora's box that GPS represents.

    Nice... er... "outside the box" thinking, Pat.

  • David from Eugene (unverified)
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    The device that is the root of all this controversy is just an odometer that records mileage when the car driven inside Oregon. It uses the signals from Global Positioning System’s satellites to determine where the car is. When the device is in close proximity to a properly equipped gas pump the device reports is the total amount of mileage recorded by the odometer since the last reading and that is all. A different device associated with the gas pump takes that mileage data calculates the amount of tax due and adds that amount to the purchase transaction as well as deducting the state gas tax normally collected for the amount of fuel collected. To meet a requirement of the Federal Grant that financed most of the test, the device used in the test contained several separate odometers giving it the capacity to record the miles driven in separate discrete areas and times permitting imposition of congestion taxing.

    Unless it is given some other capabilities beyond those that are needed to provide the above functions it cannot be used to track or locate the vehicle it is mounted on. Nor can it be used to determine in more them the most general way where the vehicle has been.

    This is not to say there are not some potential problems that would need to be worked out, starting with the fact that the device does not care where the fuel that the vehicle is using came for and whether a tax was collected on it. For example the device would track miles traveled in Oregon even if the vehicle was using fuel purchased in Washington State, and it would collect the mileage tax on that driving the next time fuel is purchased in Oregon even though Washington State’s Gas Tax had been collected on the fuel used. Additionally should more then one state adopt such a system, there would need to safeguards to insure that an out of state system does not collect for miles recorded as being driven in Oregon. The two biggest problems however are political not technical; what will the mileage tax rate be and who will pay for the necessary equipment both the on car device and the collection device at the gas station or fueling point.

  • Donald Brandshaft (unverified)
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    Assuming we want a mileage tax at all, I would prefer to have a tamper proof odometer and have the DMV read it when I renew my car's registration. I believe the Oregon gas tax is 43.4 cents per gallon. In my case that comes to about $250 per year. I assume this is a fair approximation of the average mileage tax. If people cry fowl because they do a large part of their driving out of state, sell or rent them a GPS device. (We'll need such devices with any GPS proposal to allow people to buy out of state used cars. I'll guess they should sell for about $100 or rent for about $15 per year.) To reduce tampering fraud, insist that their total GPS and odometer mileage more or less agree. I think that their will be very few takers.

  • Betsy Imholt (unverified)
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    Oregon's gas tax is 24 cents per gallon.

    Facts can be found at http://www.oregon.gov/ODOT/HWY/RUFPP/mileage.shtml

  • Terry Parker (unverified)
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    Missing from any proposal is a method to tax the users of the road that currently pay nothing and therefore freeload. Take for example the Hawthorne Bridge in Portland. PDOT estimates that 20 percent of the crossings are by bicycle. Even though the Hawthorne Bridge was modified a number of years back by widening the sidewalks costing millions of dollars, bicyclists still pay nothing towards the infrastructure they use and rant for. Many claim they own a car and therefore are already paying taxes for roads and bridges. It that were true, then motorists in Oregon are being overcharged for their use of the roads and bridges because there is plenty of extra money to fund bicycle infrastructure and subsidize a group of freeloaders, On the Hawthorn Bridge, it amounts to 20 percent of the users. Therefore, the primary target of Governor’s socialist proposal and agenda is to implement more social engineering, more government controls over the people, limit democracy, and create a venue where less choices are available that meet the needs of families or for people who need vehicles with cargo capacity than it is a way to pay for the roads. Once again the Governor is not being completely truthful whit his motives.

  • Donald Brandshasft (unverified)
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    Thank you Ms Imholt (for the authoritative number, 24 cents per gallon, for the gas tax. If a typical driver only pays well under $200 dollars a year what's the fuss? Why not just an appropriate amount to the registration fee and be done with it? Certainly there are far greater injustices to worry about.

  • Zarathustra (unverified)
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    Posted by: joel dan walls | Jan 7, 2009 1:35:36 PM

    Well damn, but given that Jim Kaarlock hasn't popped up yet on this thread, someone's got to present his sort of quasi-libertarian argument, so WTF, here's a straw man: no gas taxes or mileage taxes. Instead, we need the Libertarian Fantasy State where the roads are privately owned and car owners pay usage fees to the owner of the roads. This is the kinder, gentler version of the sort of highway banditry that exists in some allegedly uncivilized parts of the world; main difference is that in the Libertarian Fantasy State, the fees are not collected at gunpoint.

    I don't want to indulge the libertarian straw man presented, but I can understand the ornery motivation to present the viewpoint. To extend the reasoning, one of the great attractions of this kind of thinking is that it is empirical. People tend to stop the logic at the absurd conclusion, like paying private road owners. Reality doesn't stop, though, and you never know what real data will be collected at that point. Maybe people get disgusted and it fuels a civilian aviation industry with small, private, anti-grav vehicles. Maybe telecommuting goes through the roof. Maybe people start buying local. Who knows? The seductive part is you get data and find out what happens before you make policy decision instead of arm chairing it.

    JK needs to stay out of more of these discussions. We're doing his point better service than Billy would!

  • SCB (unverified)
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    You know, in all this discussion about a miles tax, nobody noted that all the out-of-State vacationers won't pay a dime.

    Used to be, don't know the current statistics, that a million people came up each year from California to visit the Oregon Coast. The coast is about 300 miles long, 600 round trip. How would that 600 million miles get paid?

  • Juri (unverified)
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    Registration fees can be quite regressive, because people that can only afford clunkers must change cars frequently - their old cars simply don't last.

    Cars do very little road damage compared to heavy vehicles, because roads must be constructed to accomodate the heavy weights. So most road damage from cars is negligible compared to damage caused by heavy vehicles, (unless those cars use studded tires!). That's why a weight-mile tax on trucks is fair and equitable. The 'damage' from cars is more related to congestion, and a Prius competes headon with a Navigator in that regard.

  • Steve (unverified)
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    "For those worried about the GPS in their cars--I don't hear folks worried about what TomTom and Garmin are doing with our info"

    TorridJoe - Instead of wasting taxpayer money working on your blogs, you should get a tech book and read. GPS is a receive only system (it gets a satellite ID, position and time to receive from multiple satellites and calculates your position.)

    The only way it transmits position info is from a cellphone if enabled and if the phone company requests it. Teddy wants us to ride around with boxes and track our location and then download for "tax" purposes.

    Compared to random phone taps, this is 100% invasive of any right to privacy. Don't give me just because someone spots you some place that anyone should be able to know where you are 24 hours a day.

    On the other hand, if I drive a gas-guzzler and pay .012/mile, at 12 MPG I only pay .144/gal in taxes instead of .24 which is a great savings. Its the stupid people who bought 48 MPG Prius' that will get socked at 2x the rate they would pay on a .24/gal gas tax.

    When are you people going to realize Teddy just ain't playing with a full deck? His ideas are about as well-thought and original as what he gets walking past a newstand.

  • Tom Vail (unverified)
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    Excellent post and (for the most part) interesting discussion.

    I have a problem with the premise that Jeff has implied when he said:

    "Shouldn't you first ask what you're paying for and what behavior you want to promote?"

    It would appear that he is saying that the State should tax us to pay for one thing and also to promote something else. My understanding of taxation is that it is a government imposed fee to pay for a government supplied service. In theory, the government supplies only those services which the people cannot provide for themselves or which the people believe are provided more efficiently by government. Roads and Highways are almost universally accepted as among those services best provided by government.

    If our goal is to maintain and even improve our road and highway system, that sets up one set of criteria against which each taxation proposal should be weighed. If our goal is to limit the amount of auto fuel consumed, that would suggest different criteria.

    I am just naive enough to wish that our politicians could work to solve a problem, eg., our decaying infrastructure, without all the social engineering.

    The above discussion appears to have lost sight of the main thrust of this post which considered essentially the Governor's Mileage Tax proposal. I would argue that with this proposal the Governor is trying to accomplish his social engineering goals while bowing (slightly) to the need to fund the repair of our infrastructure. In my view we need to fund the repair of our infrastructure and be aware of the impacts of the method of funding. The Governor's proposal has the tail wagging the dog.

  • Betsy Imholt (unverified)
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    SCB-

    Drivers from out of state would still pay the gas tax.

    Facts can be found at http://www.oregon.gov/ODOT/HWY/RUFPP/mileage.shtml

  • Tom Vail (unverified)
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    To Ms. Imholt -

    Thank you for the link to the report.

    I was very pleased to read the Criteria for a new tax established by the task force.

    I was equally displeased with the fact that the second major recommendation of the task force was to try to engineer the way in which the public uses the roads and highways - "congestion pricing."

    My understanding of the charge of the task force was that it was to find a new system to replace the current funding system for roads and highways. It is very telling that it was important to the task force to add to the original charge a desire to include "congestion pricing." When the report states, "The Oregon Mileage Fee Concept easily adapts to congestion pricing strategies for urban areas," it has just set the stage for this set of regulations and taxation to creep into other areas.

    The public fear of loss of privacy is addressed often in the report. Is it not possible that the public fears just this same "creep" will happen once each of us has a "monitor" in our vehicle?

    My reading tells me that this is anything but a transparent solution. Hidden in this solution are the seeds for great expansion of both regulation and taxation.

    Until shown the error of my ways, I will oppose any 'solution' that addresses more than the problem - funding the maintenance of our roads and highways.

  • Zarathustra (unverified)
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    The public fear of loss of privacy is addressed often in the report. Is it not possible that the public fears just this same "creep" will happen once each of us has a "monitor" in our vehicle?

    You wouldn't have to fear the monitoring if you didn't accept a scad of laws you don't believe in because you think you can beat the odds on getting caught. Americans fear monitoring more than most, not because we're such lovers of liberty, but we agree with so few of the laws on the books. Just about everytime there's a row over the authorities having a new source of data, the real concern is that now they can enforce a law that we allowed to pass thinking it would not be enforceable and go away.

    Put another way, how long do you go before breaking a law? When I lived in the Netherlands I noticed once that I had not done anything illegal in over a year. I can't walk to the store with the same result here. Under the US and Brit systems, we serve the law, not the other way around. Look at the way the role of the shire reeve, now the sheriff, evolved. States where it is the other way around, are much less fearful of monitoring.

    Bottom line, like almost every progressive discussion, this ends with, "that would be a great idea, but we've got all this baggage crap that we won't get rid of and that kind of complicates the picture, so, unfortunately, we've concluded that the idea is unrealistic". You have to address American politics like you're talking to a ratty 4 year old. The overriding and eternally abiding question is always, "Why do I have to?" Unfortunately, that trend only became attenuated by the reality of massive casualties in the world wars, and Britain's being ruined financially by the second world war. Unfortunately, North Sea crude saved their pasty arses and...SURPRISE...Margaret Thatcher and Tony Blair immediately begin extending the "nanny state".

    In other words, brutally repressive regimes are destroyed. They don't moderate or go through a progressive phase. As long as every bumpkin can proclaim, "best in the world, greatest, etc.", none of this has a chance.

    "Shouldn't you first ask what you're paying for and what behavior you want to promote?"

    Way too rational. That is exactly the opposite thinking. You might as well try preaching it to the birds. Most people would sooner die than think, and they do. I've lost it; quoting English philosopher I can't stand... It is a horror, though. If you are an iNTj and choose to stay in this society, your life will be a waste. Who misses Eisenhower? He fully understood the coming threat and accomplished what, exactly, relative to it? It doesn't matter how much you understand. If you can't get the ratty four year old to do it, you might as well be the only person that can land a B-52 on a Pebble Beach green.

  • George Anonymuncule Seldes (unverified)
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    @ Terry Parker:

    Missing from any proposal is a method to tax the users of the road that currently pay nothing and therefore freeload. Take for example the Hawthorne Bridge in Portland. PDOT estimates that 20 percent of the crossings are by bicycle. Even though the Hawthorne Bridge was modified a number of years back by widening the sidewalks costing millions of dollars, bicyclists still pay nothing towards the infrastructure they use and rant for. Many claim they own a car and therefore are already paying taxes for roads and bridges. It that were true, then motorists in Oregon are being overcharged for their use of the roads and bridges because there is plenty of extra money to fund bicycle infrastructure and subsidize a group of freeloaders, On the Hawthorn Bridge, it amounts to 20 percent of the users.

    Jeff Jensen of Portland agrees with you (letter to the Oregonian):

    As a bicycle commuter for 17 years, I fully agree with Willie Nyquist's suggestion (Letters, Dec. 9) that we tax bicycles by adding a registration fee. In fact, I would like to suggest that the rate be the same for all vehicles and reflect the relative use of the road. How about $1 a pound?

    THAT's good thinking.

  • Lani (unverified)
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    This is still a lame idea.

    The technology isn't there. Maybe when those long-awaited flying cars arrive it'll make sense.

    In the meantime, other states license bicycles.

    A progressive car registration with licensing tied to the value of the vehicle. New, larger trucks and cars cost more than smaller, fuel efficient cars. After almost 50 years, the system could use an update. People on food stamps aren't going to be registering and buying new cars.

    Increasing the gas tax penalizes people with gas guzzlers while a mileage tax is regressive and equally punishes people who use fuel efficient cars.

    The state also has businesses that file plans every year to decrease commuter costs. There aren't any penalities charged or enforcements for businesses that ignore the guidelines and do nothing. Maybe they should think about enforcing this and push businesses to more remote workers, give people transit card, etc.

    I've seen much better suggestions from the amateurs posting here than from the "professional" policy wonks we employ at the state.

  • Lani (unverified)
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    Creating a new, expensive, untried system of taxes that punish fuel efficient car owners instead of increasing the gas tax isn't sensible.

    Car registration fees haven't changed by much since 1950, but that's not under discussion.

    Why won't the legislature do something cheap to raise revenue?

  • Lani (unverified)
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    <h2>Isn't a gas tax a mileage tax?</h2>

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