Monday, December 22, 2008

Vehicle for taxation

Lodged in my memory from the debate during then-Gov. Jim Gilmore's no-car-tax proposal is a fellow citizen's litany of levies already assessed on vehicles.
In a fit of pique, she listed all the fees we have to pay to the government on what is most peoples' second-most-expensive purchase in their lives.
There's registration fees and tags, there's sales taxes, there's vehicle inspections, there's locality decals and there's taxes charged on the necessary gasoline to operate each car. After that, she continued, each vehicle owner also has to pay annual personal property taxes on top of everything else.
Of course, at that time, people believed that the governor's proposal would eliminate personal property tax collections.
The illusion was nice while it lasted.
I can well understand the resentment on the wealth of provisions that apply to the automobile — in our society it's well-nigh impossible to do without personal transportation.
Besides a people conveyance, our cars have proven quite an efficient vehicle for generating government revenue.
But this is a case of you-don't-get-something-for-nothing, as the roads we need for our cars to go on, the paved ways that communities depend on so heavily for economic development and growth, the costs mount up and quickly.
Anyone who's been in listening distance of Virginia State Senator Roscoe Reynolds, D-Henry County, knows he's been talking about this shortage of road maintenance funds as a problem that been mounting ever Gilmore was in office.
It can cost millions per mile to create a road. We only need to consider the ongoing installation of the Hillsville bypass at approximately $15 million per.
Events during our nation's economic crises and the advent of new technologies may well lead to a new method of using cars to drive up taxes, much to the displeasure of all citizens who must depend on them for their livelihood.
Desperate for funds to maintain the highways and byways we've got — a reported 47,000 miles in our country's interstate system alone — states may work out a way to tax drivers per mile.
My information comes from a Charlotte Observer article explaining that a "road-use tax" may be collected to replace waning gas tax revenue, as people drive less in the wake of the credit crunch and other uncertainties arising from the slowdown in the economy.
North Carolina might just check the odometer on a car during an annual inspection and charge a tax based on the miles added over last year, the article says.
Simple.
Transportation officials expect to be able to track all vehicles in the future, with the increasing appearance of global positioning systems as a feature on cars and trucks.
Constant monitoring may allow the state to "charge people different rates based on when and where they drive, in an attempt to manage congestion," as The Observer puts it.
The way it might work is a state charging a fraction of a cent per mile driven, after the first 2,000 miles click over on the odometer, the article says. At a quarter-of-a-cent, a driver who puts 12,000 miles on would pay $25 a year, for example
Need for such a tax will only continue to grow, as Americans switch to more fuel efficient vehicles in the future.
Even with just people driving less, North Carolina expects a shortfall of $193 million in just one year.
Transportation officials foresee implementing the driving tax in combination with the gas tax.
But there's one more force that would have to be brought to bear to create a new tax: political will.
When it comes to raising the tax on the people, the will of politicians to do so often is in short supply.
But really what choice will elected officials have?
With a (very) conservative estimate on the value of the interstates at $1 million per mile for a total of $47 billion, can public officials make the decision just to let those degrade?
We've got to maintain what we've got or risk throwing those investments away.
New revenue initiatives are unlikely to stop at a driving tax, if that comes to pass. Look for an increase on gasoline taxes as well as any alternative fuel that may come down the pike to replace it, in my opinion.
But before government officials consider adding more new roads to the system and more maintenance expense, I hope they will seriously think about investing in mass transit instead.
But, in the meantime, I would take with a grain of salt any politician who promises "no new taxes."
Especially on our cars, because on top of our private costs to operate them, there's also a huge public expense to build out and keep up our transportation systems.

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