LaHood Proposes Flawed Mileage Tax; Administration Spokesmen Shoot It Down

Citing insufficient funding for roadways, Transportation Secretary Ray LaHood has proposed a vehicle miles traveled (VMT) tax, based on the number of miles a person drives rather than fuel consumption.

In an interview with The Associated Press yesterday, LaHood rejected the possibility of raising the gas tax in the economic downturn, preferring to “[think] outside the box on how we fund our infrastructure in America.” The VMT tax would likely require the installation of a GPS chip in every vehicle in the country to track mileage.

It’s hard for me to see how this is not worse than a gas tax on every level. First of all, getting the program started will be a logistical nightmare. (Think installing digital converter boxes in 6.5 million households has been hard? Try putting GPS chips in the country’s estimated 250 million passenger vehicles.) It will also be a tremendous expense at a time when LaHood’s former Republican colleagues in Congress haven’t exactly welcomed excessive government spending.

But most importantly, it gets the incentives all wrong. Under LaHood’s plan, the driver of a Rav4 (22/28 MPG) would pay no more than the driver of a Prius (48/45), even though he’s consuming twice as much gas. A shopper at a Toyota dealership will see the Rav4′s lower price tag and spacious interior and feel little motivation to spring for the cosy Prius.

The only possible rationale for a VMT tax is political. A higher gas tax is tangibly painful for drivers who find themselves shelling out much more at the pump. It’s a hard sell. A little GPS chip in their cars and some extra tax forms, on the other hand — well, that just might be sneaky and abstract enough to work.

Still, if a gas tax is politically impossible when gas prices are just about as low as they’ll get, then when will it be feasible?

UPDATE: Transportation Department spokeswoman Lori Irving just shot down everything LaHood said: “The policy of taxing motorists based on how many miles they have traveled is not and will not be Obama administration policy.” Guess our transportation secretary was just speculating when he told the AP, “We should look at the vehicular miles program where people are actually clocked on the number of miles that they traveled.”

LATER UPDATE: Press Secretary Robert Gibbs also dismissed the notion of a VMT tax. “It is not and will not be the policy of the Obama administration,” he said at this afternoon’s press briefing. Again, makes you wonder why LaHood would bring it up without consulting anyone.