It’s Time to Tax Car Drivers by the Kilometre

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The RAND Corporation is calling for a new way to tax drivers in the states: by distance traveled. Car drivers may feel like they’re paying too much in taxes already, but the reality is that the costs of maintaining road infrastructure are far greater than revenue from vehicle-specific taxes. In the USA, congress has had to bail out their highway fund from general taxes and in other jurisdictions (like Canada) it’s just accepted that everyone pays for the luxury of drivers. Gas taxes and the like aren’t bringing in enough revenue so RAND suggest drivers pay per kilometre travelled, that way those who the roads the most pay the most to maintain them.

A Vehicle Miles Traveled tax is what it sounds like: a toll that applies wherever you go. Drivers pay by the mile, at a rate that reflects the actual cost of driving. The idea is popular. More than half of states have looked into taxing VMT. The most prominent has been Oregon. In 2006 the state recruited 300 drivers for a pilot program, and outfitted their cars with GPS. For each mile, they pay 1.5 cents. (They are also exempt from paying the state gas tax.)

A VMT tax could tamp down on congestion by adding a few pennies to the per-mile fee during rush hour or when drivers enter city centers. (That second bit is also known as a congestion charge.) To control emissions, gas guzzlers could pay a higher per-mile rate.

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