More Miles, Better Mileage Taxing The Tax Man


Think cars aren’t getting more efficient and people aren’t driving farther these days? Well, the tax collector does think so, and if there’s one person we always believe, it’s the tax man.

Anyway, the Federal Highway Administration is estimating that in two years the revenue from state and federal gasoline taxes, which funds the national highway system, will be about $21 billion shy of what’s needed to maintain existing roads — give or take a billion, we guess.

That doesn’t include the money needed to build new roads, either. This shortfall is expected to come even as taxes already grew 10% between 2000 and 2005, and are supposed to grow another 11.6% between now and 2012.

The U.S. Department of Transportation is blaming you. Well, it’s blaming you if you drive more today than you did in 1990, when the average car traveled 11,107 miles a year. That number rose to 12,084 miles in 2005. Quick math puts that at less than a 10% increase, though, compared to the more than 10% growth in taxes collected. The government says it will start lacking funding in 2009.

So, how do we recover? How do you get that favorite stretch of interstate repaved? Higher tolls and new taxes. Some states are looking at taxing miles driven to supplement their portion of the shortfall. Instead of increasing a tax 20 cents per gallon, imagine an additional 1 cent per mile tax, like the one Oregon is trying out. 

Fuel-Efficient Cars Dent States’ Road Budgets (Wall Street Journal)

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