Wednesday, February 10, 2010

A Miles Tax Is a Bad Idea

“One of the most ridiculous policy proposals I’ve read in a while” writes Andrew Samwick in Capital Gains and Games.

"Compared to a higher gas tax rate, a tax on miles driven ignores the amount of fuel used to drive those miles. Highway travel is taxed the same as city travel. Gas guzzlers are taxed the same as hybrids. Neither change makes any sense from an environmental perspective. Nor is it necessary to raise issues of privacy involved in collecting a tax on miles driven in the ways suggested in the article by monitoring the history of the locations of the car (as opposed to an annual fee based on an odometer reading collected at a state inspection).

Many cities are experimenting with congestion taxes, which are based on miles driven at particular times in particular locations. Those are worthwhile policy measures to relieve congestion and are different from a uniform tax on miles driven."

Hat tip: Alex Tabarrok (Marginal Revolution).

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