February 20th, 2009
03:00 PM ET
5 years ago

Transportation Dept.: Obama will not pursue mileage tax

The Obama administration will not support a policy of taxing drivers based on their mileage, the Transportation Department said Friday after a published interview in which Secretary Ray LaHood called it an idea 'we should look at.'
The Obama administration will not support a policy of taxing drivers based on their mileage, the Transportation Department said Friday after a published interview in which Secretary Ray LaHood called it an idea 'we should look at.'

WASHINGTON (CNN) – The Obama administration will not support a policy of taxing drivers based on their mileage, the Transportation Department said Friday after a published interview in which Secretary Ray LaHood called it an idea "we should look at."

In a written statement, the department said, "The policy of taxing motorists based on how many miles they have traveled is not and will not be Obama administration policy."

The idea - which involves tracking drivers through global positioning system (GPS) units in their cars - is gaining support in some states as a way of making up for a shortfall in highway funding. Oregon carried out a pilot program and deemed it "successful."

Speaking to The Associated Press, Transportation Secretary LaHood, an Illinois Republican, said, "We should look at the vehicular miles program where people are actually clocked on the number of miles that they traveled." The remark was part of a discussion about various options to help make up for the highway funding shortfall on the federal level.

When contacted by CNN, the Transportation Department said LaHood was unavailable. A spokeswoman provided the department's statement and said she could not elaborate.

Officials in Massachusetts told CNN this week that there has been talk of proposing such a system for the state. Colin Durant, a spokesman for Gov. Deval Patrick, said "privacy would be our top priority."

Patrick on Friday announced a different plan to help raise highway funds: a 19-cent hike in the state's gas tax. But he said that alone "will not solve all our challenges," and some "major reforms" will be needed.

Under a VMT (vehicle miles traveled) tax program, GPS units would allow the government to keep track of how much each car is driven and where - though not necessarily with exact street locations. It may also track other things, including the time each car enters a certain zone.

For decades, the fuel taxes that drivers pay at the pump have been the central source of federal and state funding for roads and bridges. But they are no longer nearly enough. Last fall, Congress approved an $8 billion infusion into the depleted federal highway trust fund.

The problem stems in part from something good: more and more Americans are buying vehicles with better gas mileage. That means less gas tax money from each car, though the car is causing the same amount of wear and tear on the roads.

Officials including LaHood have opposed raising the national gas tax, particularly in the current recession, and have said a new system is needed.

A report by the Oregon Department of Public Transportation, published in November 2007, said a "Road User Fee Pilot Program" found that a VMT tax is "viable."

"Privacy is protected," the report argued, saying the pilot program included "engineering requirements to maintain as much privacy as practicable while still allowing a feasible way to audit and challenge billings."

"No specific vehicle point location or trip data could be stored or transmitted" in the pilot program, and "the only centrally stored data needed to assess mileage fees were vehicle identification, zone mileage totals for each vehicle and the amount of fuel purchased."

Some officials support using tracking zones and times of day in determining a VMT tax, so that more would be charged for driving on crowded roads during rush hour.

But some people across the country have spoken up against a VMT tax.

"Is this a good idea? In a word, no," columnist Glenn Reynolds wrote in January for Popular Mechanics. "At best, it's overcomplicated and intrusive. At worst, it's a threat to privacy and the environment."

Reynolds added, "Gas taxes are a pretty good proxy for road usage - the more you drive, the more gas you burn - and there's a bonus: Gas taxes encourage people to use less gas... A mileage tax, presumably, doesn't care whether you're driving a Prius or a Hummer, giving no incentive to save."

The Civitas Institute in North Carolina - which describes itself as standing for "liberty and prosperity derived from limited government" - said it carried out a poll in North Carolina and found that voters disapprove of the idea.

A federal blue-ribbon panel plans to issue a report next week on ways the country can make up for its highway funding shortfall. Other possibilities include tolls, higher registration fees, and other types of taxes.

In its interim report, the National Surface Transportation Infrastructure Financing Commission said new technologies could allow for a mileage gas tax that would take into account the type of vehicle and level of emissions. Programs of that type are being developed in other countries, including Germany and Netherlands, the report said.

It added, "Such programs may not be ripe for widespread implementation in the U.S. yet, but are maturing rapidly."
–CNN's Kara Yates contributed to this report.


Filed under: President Obama
soundoff (72 Responses)
  1. Marcia, Marcia, Marcia in CA

    Tax the banks.

    I mean, states are setting up ATM cards for unemployed workers to use to get their benefits and charging them fees to access their own money. The banks also earn interest off the government money deposited for the benefits.

    How greedy is that and HOW stupid or pandering are these politicians?

    A new low.

    February 20, 2009 04:46 pm at 4:46 pm |
  2. Observant

    BEST NEWS OF THE DAY!!!! One more tax burden that I could not accept. We pay enough in gasoline taxes as it is, and having to pay a mileage tax would have been too much on the American people.

    Eliminate the number of individuals in government , that will have pay for the remaining government workers and their benefits.

    February 20, 2009 04:50 pm at 4:50 pm |
  3. Chris

    This is at least 1,000,000,000,000 times scarier than the Patriot Act. Want people to drive less and solve the infrastructure issue? JACK UP THE GAS TAX.

    I'll die before I have a friggin government GPS tracking even the broadest my movements.

    February 20, 2009 04:53 pm at 4:53 pm |
  4. Virginia

    Boy, doesn't that cut right into the face of purchasing cars with higher gas mileage???????????

    Why would we bother?

    What an idiotic idea!!!!!!!!!!!!!

    February 20, 2009 04:55 pm at 4:55 pm |
  5. Sniffit

    @ Don't Blame Me

    Wrong article for proving you're off your meds. The article about Kennedy's support of universal healthcare was a couple higher up on the ticker.

    February 20, 2009 04:55 pm at 4:55 pm |
  6. Sniffit

    @ vic

    Calm down. He had to discuss this with Obama before he made a representation to the public about whether it would be a policy of Obama's administration or not. Deep breaths....

    February 20, 2009 04:58 pm at 4:58 pm |
  7. boered1

    @ Dont blame me you said "WAKE UP AMERICA ——-THE TIME IS NOW!!!!!!!"

    i disagree the time was 6 years ago when bush started his fascist state what is happening now is the President Obama is starting to correct the radical religious rightwing republican mistakes of the last 8 years, plus those from the previous 40 years. two simple arguements that you members of the radical religious right have never been able to counter.

    1st arguemnt FACT the republicans have controlled the Whitehouse about 3/4 of the time for the last 40 years (28 yrs vs 12 yrs) FACT the republicans have controlled Congress for over 50% of the time for the past 40 years (24 yrs to 16yrs) So either the problems we have are the result of the republican party since they have been the controlling party for the last 40 years OR Democrats are much more effective leaders in which case they should be the ones to fix the current problem.

    2nd arguement If trickle down economics works as you claim it does (cut taxes on companies, they hire more people, more jobs more income taxes) than explain that over the last three years the US oil companies have reported record profits (ignoring the money they do not report) and yet they have REDUCED THEIR MANPOWER EACH YEAR.

    i await your response to these FACTS, it should be interesting to say the least.

    February 20, 2009 05:00 pm at 5:00 pm |
  8. Hankers

    simple... tax the gas

    February 20, 2009 05:03 pm at 5:03 pm |
  9. Jim

    This would in no way be a fair and equitable tax. How about the independent trucker that makes his living driving. He would absolutely be taxed to death, in addition to the tax he pays for fuel, tires, oil, etc.

    However, just wait. Soon it will happen.

    February 20, 2009 05:05 pm at 5:05 pm |
  10. GuyInVA

    First, it's a stupid idea and kudos to the President for saying no to it. Second, "PRIVACY WILL BE PROTECTED"?!?!? You're going to put a GPS device on cars, and tell drivers their privacy will be protected? Try going a full week without hearing about a bank or credit card company's security being breached. Is this a joke?

    February 20, 2009 05:09 pm at 5:09 pm |
  11. Texas Teacher

    Did anyone seriously think that Obama would support such taxation? Not a Man of the People for the People! Now Bush would have loved it!

    February 20, 2009 05:11 pm at 5:11 pm |
  12. Randy - Denver

    An interesting concept, I could see it working without the government being given ANY information. First every VIN is tied to a type of vehicle so you set the rate based on type of vehicle (ie lower milage higher millage) You then connect the "counter to the odometer (yes this can bemessed with, and most likely will be by some people, nothing is fool proof, however, it is already an serious offense to mess with the odometer). When you stop to gas up a signal is sent to the pump which tells it your miles travelled since last time the signal was sent and your VIN (or maybe just the part that ids the type of vehicle not the whole thing). The pump recieves this signal, calculates your taxes and begins to pump. If no signal recieved no pumping happens. you pay just as you do now. The memory in your car, except for the VIN is deleted each time it is acknowledged as recieved and the pump clears its memory when the hose is shut off (returned to the storage position etc (we know this works we saw it in the 2004 electronic voting booths)) Simple, No memory stored of who used what or where they went. No REAL information, other than type of vehicle and milage is exchanged. If your car has good milage but you drive alot you tend to pay more if your car gets bad milage (or is heavy) but you rarely drive you would pay less. Simple no privacy concerns and the price of gas would drop (about $0.48 here in CO I THINK not sure) The tax would show up as a separate line on the bill allowing local, state and federal to each determine their cut. republicans like this you pay for what you use, Democrats like this because if you have a fuel efficient car you pay less. Libertarians like this because no information is saved and Government involvement does not change from where it is now.

    February 20, 2009 05:12 pm at 5:12 pm |
  13. bsmith171

    ray la hood is a mobster!

    February 20, 2009 05:13 pm at 5:13 pm |
  14. Matthew, Detroit

    WOW,, Thank you Master Barack for not taxing me for driving my car.

    I love how they make it sound like he is doing me a favor.

    You already tax the car, the plates, the gasoline, NOW you want to tax me for how far I drive.

    Freaking joke. DICTATOR.

    February 20, 2009 05:14 pm at 5:14 pm |
  15. yuri

    No more taxes- is almost a golden saying. People's anger may erupt like a volcano with potentially and possibly disastrous consequences. Many are dying to vent their vehement vitriols at the slightest stimulus (pun intended). Beware, Dems! Do not go overboard.

    February 20, 2009 05:16 pm at 5:16 pm |
  16. Matthew, Detroit

    YOU GUYS ARE MISSING THE POINT.

    They already tax Gas, Car, Plates..... they dont want you to drive.

    This is a socialist issue clear and simple. Welcome to russia where
    most people dont have cars. WHY do you IMPRERIALIST need your cars? Do you think you are better than everyon else in the WORLD?

    This is a deep deep socialistic agenda. Anyone that does not admit this DEM or REP is not reading the whole story.

    Now he acts like he is doing us a favor by not taxing mileage..

    February 20, 2009 05:17 pm at 5:17 pm |
  17. sandee in Portland

    He may say "Oregon deemed their pilot program successful", but he's wrong. The majority of the people in my state (Oregon) are against this. Why should people be penalized because they use their cars to make a living, such as realtors, inspectors, truckers, appraisers, etc. I certainly don't mind paying higher gas taxes, but would draw the line at being taxed on how much I drive.

    February 20, 2009 05:20 pm at 5:20 pm |
  18. Matthew, Detroit

    This is not a tax issue you minions.

    This is an issue of control. Call it socialism fascism, what ever you want.

    They want to tell us we can not drive. I am taking a class on solar energy right now. They teach you a little on solar energy but the

    BIG PUSH is on social awareness, social responsibility. THE FAR LEFT WING much like the FAR RIGHT WING is very extreme. YOU MAY HATE GOD but I SURE HATE TREE HUGGERS trying to take my car away.

    February 20, 2009 05:20 pm at 5:20 pm |
  19. annie - Palin 2012

    Why? Is he too busy with the 1mil $ insurance policy on every gun an American taxpayer owns.

    February 20, 2009 05:28 pm at 5:28 pm |
  20. ConsiderThis, FL

    This idea isn't even worthy of comment; it's so bizzar. The people who should be paying mileage tax are those who continue to drive around the country in half million dollar RVs, and those who fly in private jets to go shopping and gamble. How about taxing the $18 billion in Wall Street bonuses. Yeah, at 15%, that would be a cool $2.7 billion. That would repair a lot of highway.

    February 20, 2009 05:30 pm at 5:30 pm |
  21. J.P.

    Why hasn't anyone generated a side-by-side comparison of the plummet of the DOW over the past 18 months with the rise of Barack Obama as the forerunner for the Democrat nominee for president, all the way up through the general election to current?

    I personally know people who saw the writing on the wall 18 months ago as Obama rose to the forefront promising to "share the wealth" (literally at gun point) and these folks liquidated their holdings. They literally cashed in their chips and headed for the exits, parking their investment dollars in gold, bonds, property or anyplace to weather the Democrat-led socialist storm of the century.

    Sure, there were problem spots in the overall market (Democrat-championed "food stamp mortgages" er uh I mean "fair lending standards")... but anyone with an inkling of economics education cannot deny the impact Obama had on investor confidence and the fear he instilled in anyone remotely "successful."

    Obama's mere presence, with his two-year long campaign of threats against prosperity and businesses have had a devastating effect on investor confidence. You remember investors, right? They are the people who create all the jobs in this country... that is, they do whenever the government isn't threatening or harassing them for being successful.

    "A nation attempting to tax itself into propserity is like a man standing in a bucket tryign to lift himself up by the handle." Winston Churchill

    "The problem with socialism is eventually you run out of other people's money." Margaret Thatcher

    "Most people understand you cannot confiscate a farmers' seed one year and then wonder why your stomach growls the following spring. So why is it people insist government repeatedly mug and assault successful businesses with taxes and then wonder why no new jobs are being created?" Me

    "A poor man has never signed my paycheck." Me

    February 20, 2009 05:31 pm at 5:31 pm |
  22. dustin

    hmmm.....a republican for bigger gov and more taxes....i thought we voted them into irrelevency.

    February 20, 2009 05:33 pm at 5:33 pm |
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