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Tuesday, June 21, 2011

o'tax'n spend - Obama's Vehicle Miles Traveled (VMT) Tax

During Obama's January 2008 talk with the San Francisco Chronicle, he said:  
"Under my plan" electricity [energy] rates would necessarily "skyrocket."
From: CDFE Sent: Monday, June 20, 2011 Subject: Obama's Mileage Tax
article source: http://www.cdfe.org/
THE TAX-YOUR-DRIVING IDEA MAY BE LOOKING BETTER TO OBAMA - A MILEAGE TOLL.
      Senate Budget Committee Chairman Kent Conrad (D-ND) is still trying to figure out a way for the government to make money off of U.S. drivers as if they were a distinct breed of citizens disassociated with the term "taxpayer." For the fourth time in half as many years, he raised the issue of a Vehicle Mileage Traveled (VMT) in a March, 2011 Congressional Budget Office report. Things are tough everywhere. And government's pockets are hurting as badly as the taxpayers'.
     Add to the shrinking tax base 1,500,000 more unemployed Americans than we had when Barack Obama started passing out stimulus money like penny candy to the needy, and it's easy to see why the Obama Administration is fishing for new ways to generate tax revenue without calling their new ideas taxation. After all, on Sept. 12, 2008, Candidate Barack Hussein Obama said: "Under my plan, no family making less than $250 thousand a year will see any form of tax increase. Not your income tax. Not your payroll tax. Not your capital gains taxes. Not any of your taxes."
     Bad ideas have a perpetual life in Washington. This bad idea began as a way to sell drivers on buying hybrid vehicles. While it was bantered about during both Bush administrations, it was seriously proposed by Congressman James Oberstar [D-MN] in 2009. The idea? A tax for every mile you drive. The people of Minnesota liked the idea so much they replaced Oberstar with a Republican, Chip Cravaack, in 2010. The second person to suggest it was Obama Transportation Secretary Ray LaHood (before the 2010 election). Obama shot the idea down. That's a good way to lose seats.
     That was then. This is now. Like I said, bad ideas have perpetual life inside the beltway. They never die. Politicians simply put them in a new set of clothes and trot them out every time they get desperate for increased tax revenues - and Washington hasn't been this desperate since the Great Depression.
     The month of May was a different story. That bad idea was looking better to someone, because a draft transportation authorization bill was floated on May 2. Section 2218 of that bill would create, within the Federal Highway Administration, a Surface Transportation Revenue Alternatives Office that would be tasked with creating a sturdy framework that defines the functionality of a mileage-based user fee system. Obama was floating a trial balloon.
     How will the tax work? At this point, it doesn't matter. What matters is that the Obama Administration, which has said, four times, it is not considering a VMT (mileage tax on travelers), is considering a mileage tax. How they plan to implement it isn't as important as how much it's going to cost YOU for them to track how many miles you drive. And, of course, how and when you are expected to pay to travel over America's highways that your tax dollars built.
     On every level, this is a nightmare the American people will flatly reject. Remind Congress that if they vote to tax the miles we drive, there's going to be a lot of former Congressmen and Senators riding the bus in January, 2013.
     The idea of taxing motorists for the miles they drive, known as a Vehicle Miles Traveled (VMT) Tax has been discussed in Washington for several years. One such dialogue took place during the Bush-43 years. The Obama Administration has not officially signed on to the idea, but Obama requested $20 million in 2012 budget to establish the Surface Transportation Revenue Alternative Office. When questioned about the VMT Tax (or Toll as it will likely be called) Department of Transportation spokeswoman Jill Zuckerman said that the proposed Office is being charged with analyzing a range of alternatives, not just one, thus the DOT has not proposed any new revenue model at this time.
     The fact remains that while Obama has not used his bully pulpit to advocate a VMT Tax, by taking the step toward creating this office, and doing the exploratory work on how to achieve this goal - particularly since the VMT tax is the preferred policy option of several transportation experts - expect its covert implementation to happen. When they unveil it, as a "toll" and not a tax, Obama will sign it into law.
     The VMT Tax will not just be a public relations bad green dream, it will be a political nightmare on every imaginable policy level. The United States of America already has an effective taxing system that is based on how much you earn. We don't need one that's based on how far you drive. Today, as Obama ponders a VMT tax, his car company - General Motors - has suggested that Congress slap a $1 per gallon environmental surcharge tax on gasoline to put the United States more in line with what Europeans pay for gasoline. In GM's mind, that would help bolster sales of GM's albatross, the electric GM Volt.
     Is this merely a push to get people to buy hybrid cars? I don't think so. I think this is a tax revenue-hungry government looking for a new food source. Here's the reality. U.S. citizens should not be charged a travel tax to take their kids to school, go to and from work, see a doctor, go grocery shopping, take their spouse or date out to dinner and a movie, or just take a leisurely weekend drive in the country. While it is now starting to not look much like the America I grew up it, I believe this is still America.
      Is this merely an environmentalist devise, through taxation, to make more people use public transit? The Federal Highway Administration website offered an explanation. The FHA said that the proposed office will phase in research and demonstration efforts to analyze a range of revenue generation alternatives with the potential to replace the petroleum-based system currently used to fund surface transportation programs.
     During the Bush-43 years, a 2006 report commission by the Dept. of Transportation called the mileage tax the most promising technique for directly assessing users for the costs of individual trips within a comprehensive fee scheme that will generate revenue to cover the costs of highway programs.
     Politicians who think differently than the rest of us seem to think the mileage tax is more equitable than a gasoline tax. Senator Kent Conrad dismissed that myth in the Senate's March, 2011 report in which the conclusion reached was that highway financing was best accomplished through a combination of BOTH gasoline taxes and mileage taxes. It's not one or the other. It's both.
      On page 91 of the 2009 National Surface Transportation Infrastructure Financing Commission Study (created by the Democratically-controlled House and Senate), the report concluded that the most viable approach [for financing highways] is based directly on miles driven (commonly referred to as a Vehicle Miles Traveled [VMT] fee system. The report added that a 3.3 cents per mile charge could raise $1 billion annually. For a car that travels 15,000 miles a year, the cost would be $495 a year. That report suggested Congress was considering replacing gasoline taxes will a mileage tax.
     How much would your Vehicle Mileage Traveled tax be? How many miles did you drive last year? Multiply those miles by 3.3 cents. That's likely what you will be paying after the politicians get through posturing. If you are the government, and you have a penchant - and a need - for a new revenue stream, you don't spend millions of dollars to figure out how to assess and collect a new form of taxation, and not collect it.
      On May 5, The Hill reported that White House spokeswoman Jennifer Psaki rebutted The Hill's query about Obama supporting a VMT tax saying a plan to tax automobile drivers by the mile isn't an option under consideration. On May 9, she modified her statement admitting that the VMT tax scheme was a draft memo for legislation, but that it was not "formally" circulated in the White House.
     With all the back and forth bantering by the White House that Barack Obama is not considering a VMT tax, logic says he is. The Obama Administration and what the public increasingly calls Government Motors have made a commitment to electric cars. While the current models are hybrids that rely more on gasoline than electricity, clearly the auto industry expects that each year the vehicles produced will rely less on gasoline and more electricity.
     As the motor vehicles we use consume less gasoline, the government will receive fewer gasoline tax dollars. Since the government, and the auto industry which is now - thanks to Obama - partially owned by the nation's labor unions, believe electric cars will be the dominant personal transportation of the future, they need to find a way to tax the fuel they consume sufficiently enough to replace the gasoline tax revenues they expect to lose. Thus, Conrad was correct in his assessment that highway financing requires both gasoline taxes and a VMT tax - a tax today for the future.
     The proposal the Obama Administration includes what the DOT calls "other options." Options which include converting bridges and highways into revenue-generating toll roads although VMT is viewed by most as the best choice because it is considered to be the most reliable funding source.
     The United States has an effective way to generate revenues to keep up America's highway system. It's called a gas tax. While Americans don't like paying 36 cents in taxes for every gallon of gas they pump into their gas-powered vehicles, they are going to be even more unhappy about paying a Vehicle Miles Traveled tax.
     Eliminating wasteful spending of taxpayer dollars should be this Administration's first priority rather than spending millions of dollars devising new ways to tax the American people.
     Sincerely, Ron Arnold, Center for the Defense of Free Enterprise Action Fund -- www.cdfe.org/cdfe-action-fund
    SEND your donation to: Center for the Defense of Free Enterprise Action Fund, Dept Code - 6464, 12500 NE 10th Place, Bellevue, WA 98005 -- The Center for the Defense of Free Enterprise Action Fund is a non-partisan education and advocacy organization that lobbies to influence legislation and mobilizes grassroots support for legislation that defends free enterprise. Contributions to the Action Fund are not tax deductible.

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