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Oregon Has a Bad Idea

Oregon is experimenting with a new road tax system, and it's a bad idea:

Oregon's 24 cents-a-gallon gas tax, which is used to fund roads, has not increased since 1993. Some at the state Department of Transportation say the money could dry up in future years as hybrids and other fuel-efficient cars become more popular. So the state is investigating other alternatives to pay for roads.

The mileage-fee project was designed by engineers at Oregon State University. The system works by using a Global Positioning System in a car to determine the number of miles traveled inside and outside of Oregon and at what times, which could lead to peak-driving-time fees. When the car pulls into a service station, a radio transmitter sends the data to a reader in a gas pump. The mileage fee is added to the bill, and the gas tax is subtracted...

The cost would be about $33 million to install the equipment in all state service stations, and about $1.6 million a year to collect the taxes, [Jim] Whitty [who is overseeing the project for the transportation department] said.

This is a bad idea in any number of ways:

  • An infrastructure for collecting gas taxes already exists. This would require a new infrastructure to be built, at a cost of $33 million (and who knows what the final bill would be).
  • It would only apply to new cars with GPS systems, meaning that two parallel systems of tax collection would be required for many, many years to come -- unless Oregon were to mandate installation of GPS receivers on older cars, which would be hugely expensive.
  • The opportunities for the invasion of one's privacy are nearly limitless. Every time an Oregonian pulled into a service station, government officials -- whatever their promises, whatever their denials -- would have the opportunity to see exactly that where person had driven, and when.
  • Most seriously, switching from a per-gallon to a per-mile gas tax is exactly what we don't want to do if we're trying to encourage people to buy more fuel-efficient cars. Presuming the per-mile tax were implemented in a revenue-neutral manner, it would be a net tax decrease for owners of Hummers and a net tax increase for owners of Priuses. What are they thinking?
If Oregon's gas tax receipts are going down because people are buying more efficient automobiles, the solution is incredibly simple: raise the gas tax. The impact will be the greatest on those driving the largest, most inefficient vehicles -- which is precisely what we want to be doing.

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