The government loves to spend your money. This is accomplished by more taxation and
other user fees. The newest 3.5 trillion dollar infrastructure bill includes a “By The Mile
Tax”. Those that are driving electric cars, which the government is pushing, will no longer
be skirting road taxes you will now have to pay a piece of the cost for the roads and
bridges. All drivers will be paying an additional by the mile tax, which is already being charged
in some major cities. Those drivers who can’t afford newer vehicles or electric vehicles
will be burdened with gas and by-the-mile taxes.
I’m sure some of you are happy to hear about this, but what does this new tax cost the
average person? There are some pros and cons - you decide. Welcome back to Car Coach Reports,
I’m Lauren Fix. If this is your first time here, we give you more than car reviews and
first looks at new vehicles. We give you Car Smarts, because knowledge is power. Subscribe
and click that little bell for notification; so you don’t miss anything. What is the
mileage tax? The mileage tax – sometimes referred to as a Vehicle-Miles Traveled (VMT)
tax, is being proposed in various states. This tax would charge drivers a fee based
on the number of miles they drove for a given year. The specific rate varies by state but
the essential idea would be a "pay-per-mile" system. The tax revenue would then go into
building, maintaining, and repairing roads and infrastructure. No state has fully implemented
a mileage tax for regular vehicles. California, Colorado, Connecticut, Delaware, New Hampshire,
Pennsylvania, Oregon, Washington, and others are studying this or have implemented pilot
programs in major cities. The specifics of how a mileage tax would work aren't clear
but one pilot program gives us an idea of how it might work. Taxpayers would log miles
through a GPS device, apps or annual state inspection forms. Whether you would pay by
the mile and gas taxes is still not decided. Hold on to your wallet. Rates will be around
1.5 cents per mile, that adds up quickly. The average driver clicks about 12,000 miles,
which would cost you $1800 per year. The plans and rates in many states are still in the
planning stages, some states are testing tracking drivers and sending out invoices. Why is the
federal government and states considering the mileage tax? Feds say the American infrastructure
needs more revenue than what is coming from fuel taxes. California Governor Jerry Brown
recently said there's a $59 billion backlog of maintenance needed and the revenue from
gas taxes won't be enough to cover it. California isn't alone – many states are facing infrastructure
issues and not enough funding from traditional gasoline taxes. You can get more CAR SMARTS
in my book, Lauren Fix’s Guide to Loving Your Car. The link is down below. The main
arguments for a mileage tax center around revenue and fairness. Supporters say that
more fuel efficient vehicles have reduced taxable gas consumption and leaves less money
for roads and ridges. Additionally, there has been no rise in the federal gas tax in
more than 20 years. Supporters say there's simply not enough revenue to maintain the
infrastructure or to build the next generation of transportation infrastructure. Organizations
like the Mileage-Based User Fee Alliance argue usage-based taxes on the road are fairer.
This turns roads and bridges into utilities like electricity or water: the more you use
it, the more you pay. Even if you think the transportation infrastructure
needs an upgrade, not everyone believes this is the best way to do it. The main arguments
against a mileage tax center on privacy, fairness and revenue. Polls suggest people don't like
the government knowing where they are and where they are going. They especially don't
like it when tied to taxation. Many are concerned about how the government would collect this
data. Others fear how the data would be stored, as well as other purposes this information
would be used for and violates our rights. Another argument against a mileage tax is
that it's not fair. Some people specifically purchased a high-efficiency vehicle to avoid
gas costs and gas taxes. Bicyclists use the roads and they don’t pay taxes either. Some
think that raising state or federal gas taxes would be a better approach. Mileage taxes
have all the negative impacts of a gas tax with none of the positive impacts. Here’s
the Bottom line: The mileage tax may not even raise the revenue promised. As much as 40
percent of the revenue generated by the mileage tax could go to private companies. Factoring
in all the fee collection, a mileage tax might not produce as much tax revenue as the existing
or raising gas taxes. Which means the federal and state governments will add the by the
mile tax to your fuel taxes. This will cost every driver an additional $1500 or more per
year. Are frustrated yet - I am! Thank you all for helping us reach 50,000+ subscribers.
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Where we go behind the scenes to see what makes the auto industry tick. Thank you so
much for watching. And we'll see you next time!