Denvil Duncan, John Graham: Yes, the current gas tax should be based on miles driven

Published: Sunday, May 5 2013 12:00 a.m. MDT

Chris King fills up his truck at a gas station in San Diego. Officials say the current gas tax, which is based on a per gallon charge, isn't keeping up with highway needs.   (Associated Press) Chris King fills up his truck at a gas station in San Diego. Officials say the current gas tax, which is based on a per gallon charge, isn't keeping up with highway needs. (Associated Press)

BLOOMINGTON, Ind. — There's a price to pay as the fuel mileage of the cars we drive increases.

Increases in miles per gallon mean less gasoline is consumed. That means less fuel tax revenue for highways. Unless new revenue is found, the result is more potholes and more traffic jams.

Many experts believe we should eliminate the fuel tax and replace it with a user fee based on the number of miles we drive.

That's easier said than done given the current political climate around taxes. So here are some ideas that add a spoonful of sugar to help the mileage user-fee go down.

The first challenge is coming up with an accurate way to determine the number of miles you drive.

You could begin with self-reporting based on a visual inspection of the odometer when you register your car. In order to discourage fraudulent reporting, public servants could compare your reported mileage with an estimate based on data from CARFAX reports, insurance companies, auto service centers and a driver profile.

More technologically advanced mileage user-fees are feasible but come with privacy and cost concerns. However, those worries are fading as automakers build cars with Internet and GPS devices and more insurance companies adopt pay-as-you-drive policies.

Therefore, it may be possible for the government to rely on the data collected by insurance companies to implement the mileage user-fee. The most important feature of these developments is that they are driven by market forces. Therefore, making this option available to drivers on a voluntary basis should reduce privacy and cost concerns that have plagued the idea of a mandatory mileage user fee.

Switching to a mileage user fee would provide several advantages over the current fuel tax.

First, the more drivers use roads, the more money is available to maintain them.

Second, the tax may persuade us to reduce needless trips and combine errands, car-pool or use public transportation.

Third, it's simply fairer than the current system. Drive more, pay more, and it doesn't matter whether you're behind the wheel of the latest hybrid or the oldest gas guzzling jalopy. Both chew up the roads at the same rate but, currently, their drivers don't pay the same amount of fuel tax.

Finally, a GPS-based mileage user fee allows policymakers to address multiple issues with one policy, as a GPS is able to track miles driven in real time.

For example, a surcharge could be implemented for heavier vehicles, driving during peak hours in congested areas, and driving on particular bridges or expressways — similar to a toll.

There are two more hurdles to this tax swap. Would it invade your privacy and what would it cost to implement?

Both need more study, but there is anecdotal evidence that younger people are more willing to share information about their travels. If you use "location services" on your smart phone, you're already being tracked.

As for the price tag, future research should focus on estimating the cost of low-tech solutions.

There is never an easy time to propose a new tax, even one that replaces an existing tax with a user-fee.

Fortunately, the ongoing fiscal debates in Congress may lead eventually to comprehensive tax reform. Such a bill could include the replacement of the fuel tax with a mileage user-fee.

The alternative is inevitably more broken roads and bumper-to-bumper traffic.

Denvil R. Duncan is an assistant professor in the Indiana University School of Public and Environmental Affairs, and John D. Graham is dean of the school.

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