VMT Madness

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Highway 401 in Canada

Highway 401 in Canada

I’m a supporter of higher taxes, so if I were a Senator and someone was bringing a vehicle miles traveled tax to the floor I suppose I’d be prepared to support it. But the sporadic bouts of enthusiasm for this idea are really baffling. As public policy, a VMT has no advantages whatsoever over higher gasoline taxes. Raising a given quantity of funds through a new VMT rather than through higher gas taxes creates (a) more administrative headaches, (b) more civil liberties concerns, (c) fewer environmental benefits and in exchange you get nothing. They say higher gas taxes is a hard sell politically (though given that elites from both parties privately acknowledge that it’s a good idea you could always just not sell it) but a VMT would be just as hard a sell.

As Andrew Samwick says “The appropriate tax instrument to make up for declining or inadequate gas tax revenues is … a higher gas tax rate.” If at some future date vehicles have become so incredibly fuel efficient that no gas tax rates could possible raise the revenue we need, then that would be an excellent problem to have. And it’s certainly not a problem we have right now.