Thursday, December 16, 2010

Where The Rubber Meets The Road

   For some time now I have been hearing and reading about this issue of alternative cars and gas taxes. In a nut, the issue is that gas taxes go to pay for road maintenance and cars that are more fuel efficient don't pay their fair share for road use. While I appreciate the concern, America really does not need one more argument against reducing fossil fuel consumption.

   The most common answer I have heard as a solution to this problem is to charge a mileage fee, or VMT (Vehicle Miles Traveled) tax. This would simply involve outfitting the 250 million or so vehicles on the road with some kind of mileage counter that would then be read at some undetermined interval (at the pump, quarterly, annually) by another unit that would need to be manufactured, installed in a couple hundred thousand locations, and maintained. One fear about this program is that Big Brother will record exactly where we go and us this to keep tabs on us. Personally I think the bigger fear is, who is going to pay for all of this new infrastructure required to keep track of, read, and calculate tax for 250 million vehicles? Another issue is, how do you calculate the tax rate, exactly? To be fair, a Hummer or F-350 creates a lot more wear and tear on our public roads than a Prius or a Fit, not to mention large industrial vehicles like semi-trucks, earth movers, garbage trucks, etc. For that matter, your average SUV driver actually does less damage to the road per mile than someone using their vehicle to carry heavy loads on a regular basis. Do we make mileage counters that also calculate the weight of the vehicle per mile? There are reasons the VMT idea has not been implemented on any large scale. While the gas tax is not perfect, until the advent electric and hybrid cars it was a surprisingly equitable system. 

   So, how can we better deal with the issue of needing to pay for road maintenance while simultaneously needing to cut back on fossil fuels? I have an idea. What do we already use on every vehicle that, like gasoline, must be replenished from time to time in direct correlation to the use of the vehicle? Tires. Tax tires according to their size and use and use that tax money to pay for road maintenance. It may even be a more equitable system than the gas tax. 

   Here's the beauty of this idea: when vehicles create wear and tear on the road, they also create wear and tear on the tires. It's pretty simple. There is a direct correlation of wear and tear where the rubber meets the road. Tax rates could be assigned based on tire ratings for various vehicles -- truck tires, small passenger car tires, etc. -- and vehicles that are on the road more will pay that tax each time they replace a tire. Some exemptions could even be made for off-road, farm use, or other applications where the tire is not actually going to be on the road. The best part of this idea is it would cost almost nothing to implement -- calculation of appropriate tax rates and state and federal passing of the tax. Done. 

   Is it the end-all, be-all solution to the problem? Probably not, but it's something we can do today, right now, that could be a step in the right direction. 

   Just a thought. 

1 comment:

  1. I think there's a lot of merit in a tire tax. I like the concept of use-based taxes. So I think this proposal is good. Here are some interesting challenges and side effects I'm picturing.

    For a given vehicle, there are probably 5 grades of tire that will wear at a different rate. They're already priced differently and generally have a mileage warranty based on their expected lifespan, so the tax might take into account both tire type / intended use and price point.

    It might be difficult to determine how much to tax each class of tire. I guess you could base it on current gas taxes. A car that gets 30mpg pays about $0.02/mile taxes in Washington state, based on a gas tax of ~60 cents per gallon. A big truck that gets 10mpg pays about $0.06. Somebody still needs to determine which tires belong with which vehicle. To get the size of tire I wanted for my Grand Cherokee I had buy a set with a higher load range than I needed. So I would have paid more than my share in tax, but that would have been my choice.

    For new cars, the tax for the first set of tires would need to be included with the purchase transaction, otherwise the rich person who buys a new car whenever the tires wear out (and these people do exist) will never have to pay for the roads.

    Driving style and the car's alignment affect how long the tires will last. I like this because it might provide an incentive for people to maintain their cars. A $70 alignment is worth about a 5% improvement in tire life. I've seen tires worn out by a bad alignment as early as the 40% mark. $70 could save that person more than $500 on just that one set of tires, not to mention that they'd have to buy tires more often.

    Here's the part that gets me. A gas tax spreads your own share of the roads' costs over many small payments, about $9 per fill up with a 15 gallon tank. At the above rates, the small car owner buying a 60K mile set of tires would spend an extra $1200 for a $500 set of tires at the current gas tax rate. The trucker might pay $3600. Ouch. I guess we could break it up into payments (maybe add it to a person's current property or other taxes), but that costs extra in administration fees and provides another way for people to not pay their taxes.

    So how about this thought? We maybe we split it up. Some tax for tires, and some tax added to the yearly registration of the car. Maybe even better - monthly car registration. And you need to report your odometer when you register. Now how to catch cheaters...

    Another challenge is the used tire market. If someone only buys used tires, they either skirt the tax, or the amount of tax becomes pretty subjective as you judge the remaining life of the tire.

    As for off-road use, that should be pretty easy. We do that now with diesel taxes. There are two types of diesel and the difference, besides a coloring to tell the difference, is the road tax. Many cheaters use the off-road diesel for their on-road vehicles, but the penalty is pretty high if they get caught.

    So there are some things to ponder. I think my math is correct.