CBO report supports the viability of per-mile taxing

The notion of taxing drivers based on miles driven isn’t a totally new concept, but such a measure has never been put into place. However, that could soon change as the Congressional Budget Office released a report this week stating that a tax based on miles driven could be a viable way to increase revenues.

Although not a full-on recommendation by the CBO, the report concluded that a tax based on miles driven could be a way to offset slumping revenues. The federal government is looking for new sources of tax revenues as it fears a shift to more fuel efficient vehicles could hurt highway funding.
The report states that the new form of taxing could be made possible by new technologies that can track total vehicle miles traveled (VMT).
“In the past, the efficiency costs of implementing a system of VMT charges — particularly the costs of users’ time for slowing and queuing at tollbooths — would clearly have outweighed the potential benefits from more efficient use of highway capacity,” CBO wrote. “Now, electronic metering and billing are making per-mile charges a practical option.”
However, the CBO did address cost and privacy concerned associated with VMT devices.
“Having the devices installed as original equipment under a mandate to vehicle manufacturers would be relatively inexpensive but could lead to a long transition; requiring vehicles to be retrofitted with the devices could be faster but much more costly, and the equipment could be more susceptible to tampering than factory-installed equipment might be,” CBO said.
The CBO acknowledge privacy concerns associated with the tax system, but didn’t offer any real solutions. The CBO only suggested limiting information that would be transmitted to the government.
The report isn’t yet scheduled to be brought in front of Capitol Hill, but Senate Budget Committee Chairman Kent Conrad, the man that requested the report, is pushing for portions of the report to be heard by year’s end.