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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

Jul 31, 2020
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 “
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 boxesin 6.5 million households has been hard? Try putting GPS chips in the country’s estimated 250 millionpassenger vehicles.) It will also be a tremendous expense at a time when LaHood’s former Republican colleagues in Congress haven’t exactly welcomedexcessive 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 downeverything 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,
“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.
Camilo Wood

Camilo Wood

Camilo Wood has over two decades of experience as a writer and journalist, specializing in finance and economics. With a degree in Economics and a background in financial research and analysis, Camilo brings a wealth of knowledge and expertise to his writing. Throughout his career, Camilo has contributed to numerous publications, covering a wide range of topics such as global economic trends, investment strategies, and market analysis. His articles are recognized for their insightful analysis and clear explanations, making complex financial concepts accessible to readers. Camilo's experience includes working in roles related to financial reporting, analysis, and commentary, allowing him to provide readers with accurate and trustworthy information. His dedication to journalistic integrity and commitment to delivering high-quality content make him a trusted voice in the fields of finance and journalism.
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