1/2/2023 0 Comments Vmt tax in infrastructure billAfter having spent $1.9 trillion on COVID pork, it may be a hard sell in the Senate. A VMT program would dramatically shift taxpayer psychology from ambivalence over current rates to visible amounts via a VMT tax to meet infrastructure needs… Capitol Hill is chatting about funding a $4 trillion infrastructure bill. That tax scheme adds a whole new paradigm to the meaning of double taxation… Oregon and Utah have already launched a program to tax per mile driven and many more states are willing and able to implement a Vehicle Miles Traveled (VMT) tax system… The majority of taxpayers are not aware of the amount of state and federal taxes included at the gas pump. I say that without remorse because we got what we voted for over the course of many years, rigged or not… Your glorious leaders are in the process of rolling out legislation and programs that will tax you for every mile you drive on the roads you’ve already been taxed for via the gas pump (and tolls) to maintain them. domestic and international affairs was predictable after the 2020 election result stomped onto your doorstep. I suggest you wander over there and review the dirty details on what you thought you knew but didn’t and how local roads and interstate highways are funded. The danger, of course, is that in Washington any bipartisan good idea gets taken hostage for partisan objectives, such as an expansion of the social welfare state and punishing corporations.Just shy of five months ago, I warned that “ A Mileage Tax to Experience the American Dream” was on your doorstep. It is exactly the right thing for the economy and supported by both sides. The Congressional Budget Office has a nice report on the design issues.Īn efficiently financed, targeted infrastructure bill should not be a legislative bridge too far. Second, the VMT should be sharply tilted toward trucking, where the combination of weight and axles leads to the greatest damage to roads and bridges. First of all, the VMT should replace the federal gasoline tax, not add to the existing burden. Cries of a damaging tax on the middle class filled the air, but this need not be the case. Transportation Secretary Pete Buttigieg’s rollout of the VMT, however, spooked conservatives. These are large improvements in the incentives for road use. One can even split the VMT into a relatively high rate in urban areas - which have the bulk of roads and infrastructure repair needs - and a lower rate in rural areas. The most promising fee is the vehicle miles tax (VMT), which would tax users of highways based on the type of vehicle (particularly its weight and number of axles), how many miles it traveled, and even where those miles are traveled. A superior solution would be to charge users of transportation infrastructure a fee commensurate to the wear and tear they impose on the system. For ports and airports, it is easy enough to charge ships and airplanes, which will be passed along to travelers and cargo shippers as part of the pricing structure.įor roads and bridges, the traditional user fee has been the gasoline tax, but it has been frozen for decades and the expansion of electric and hybrid vehicles increasingly makes it disconnected from use of the infrastructure. A better way to go is to keep to the tradition of levying user-fees, so that those who use (and wear out) the infrastructure pay for its construction and maintenance. The Biden approach is to start with the most economically destructive tax, the corporation income tax, and to begin with the most inefficient way to raise the revenue – increasing the rate. The second step is paying for the spending. So, why not start out with something that covers those areas and would likely cost in the area of $500 to $700 billion? Unlike the AJP or the broader Build Back Better (BBB) plan, this approach would focus on federal spending with a clear positive impact on productivity and not watered down by social welfare transfers. And there is a good case to be made for broadband as 21 st century infrastructure. People often ask: “If you don’t like the American Jobs Plan (AJP), what do you support?” It is easy to see that there is a bipartisan consensus supporting spending on traditional infrastructure such as roads, bridges, ports, airports, and the like. Eakinomics: An Infrastructure Plan for the Economy
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