Thursday, August 12, 2010

Big Brother's Driving You

I read this article "How electric cars could pull the plug on U.S. highway funding" and it got me thinking. The gist of the article is as follows. Currently US transportation projects (like highway maintenance and improvements) are mostly paid for by state and federal taxes on gasoline. Revenue from those taxes has been falling in recent years, to the point where there is no longer enough income to pay for the projects. The government has had to subsidize these projects with general tax revenue (which as we know is nearly limitless). But why can we no longer afford to maintain the roads we've built?
The problem, according to the article, is that people are driving less, and cars are more efficient. However, if you look at the graph at right you will see the real problem. Between 1998 and 2000 spending went from $20B to $30B and is now almost $40B.

Either way it is clear that the projected spending is not sustainable with the projected income. This is exacerbated by government subsidies of electric cars, which result in reducing income further.

Most people, when they realized they were spending their income to reduce their income, would stop doing it. But our government marches to the beat of a different drummer. It is more important to follow the political agenda than to make sense. The solution is to raise more tax revenue.

But how? We need to take back those subsidies from the electric/hybrid car folks. One good way to do that is to tax people by the distance they drive, rather than by the amount of gas they buy. Given we need the revenue, I actually think that's a good idea. It's fair in that the people who use the resource (roads) are the ones who will pay to maintain/improve them. True some people drive highway more than local roads, but except for outliers this is a good system.

But of course, there's a catch or I wouldn't be writing this. How would you measure how far people drive? If it were me, when the cars went in for their annual state inspection I would record the mileage and use that as a basis for taxing. Obviously cars that are junked or sold would have to have their mileage recorded or the owner would pay a penalty, perhaps equivalent to the expected mileage on the vehicle.

However, the proposed solution will use GPS tracking to monitor your car's mileage. According to the article, this is the system being implemented in the Netherlands and Poland. Aside from the fact that every car would now require a GPS, and that the system will require billions in computer technology, the government would then have the technical capability to monitor the movement of every citizen. You can probably guess how I feel about that.


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