Monday, August 10, 2009

GPS transponders in personal vehicles
Oregon thinks it should be a federal program

Daily Journal of Commerce

Using a GPS system in your car in order to collect a VARIABLE PER MILE TRAVELED tax versus the current system of paying a tax per gallon, is such a bad idea, that US representative Earl Blumenauer, Democrat Oregon, would like to take it to the federal level.

To recap, this would require installing or having installed by the manufacturer a GPS system which will monitor how many miles you drive, where you drive, and what time of the day that you drive as well as the congestion level of the road in order to calculate how much tax that you owe the government for the pleasure of traveling down the road.

THE SOLE REASON that the government claims it needs such a system, is due to the higher efficiency cars do not generate the same REVENUE as lower efficiency vehicles. In other words, less gas used = less government revenue.

James Whitty, manager of ODOT’s Office of Innovative Partnerships and Alternative Funding, believes Oregon has the opportunity to “spread its expertise” across the nation. He’s confident the federal government will recognize this, and fill the state program’s funding gap.

“Oregon is still the only state that has tested a complete testing system for mileage fees,” Whitty said.

Oregon estimates that creating a vehicle's miles traveled fee could cost $33 million however, that cost could be offset in part by charging drivers for the transponders.
[for those you that are slow, basically you will be paying yourself for the device that will collect more money from you]

Blumenauer's office however says that a federal vehicle miles traveled fee program, could require a five to 10 year. Study and slow integration.

like I've always said, if you do the math... the "per mile traveled" GPS system will cost the consumer more than the current system.

For example, let's take a vehicle that gets 60 miles per gallon versus a vehicle that gets 20 miles per gallon and compare the GPS method of road tax collections versus the current system. Which do you think will cost more?


Car #1 gets 60 miles to the gallon. Car #2 gets 20 miles to the gallon. And we'll say that the current fuel tax is $.42 per gallon

both cars will travel 500 miles

Car #1 uses (500 divided by 60) 8.3 gallons of fuel times $3.50 per gallon = $29.05
car #2 uses (500 divided by 20 ) 25 gallons of fuel, times $3.50 per gallon = $87.50
in fuel cost alone, it costs car #2, $58.45 more than car #1 in fuel to get to the same destination.

At this point, using a higher mileage vehicle seems to make sense for the consumer. In other words, if you wish to use a vehicle that gets lower mileage, you will be paying for the privilege. Including, gas tax.
Car #1 is paying (8.3 times .42) $3.36 in taxes whereas
car #2 is paying (25 times .42) $10.50 in taxes for the same trip

Under the GPS per mile system...

Under normal road conditions, light traffic, the GPS system will be charging .02 cents per mile. .05 cents per mile in high congested areas. During our trip, 50 miles were through high congested zones.

Both cars of course will be paying the same amount of tax.

50 miles times .05 = $2.50
450 miles times .02 = $9
total tax collected = $11.50.

Both vehicles wind up paying more in fuel taxes.

The high mileage vehicle, car #1 Pays $8.14 MORE than under the current system while at the same time, car #2 merely pays one dollar more.

In short, the vehicles that cost more and gets better gas mileage is actually being penalized for their efficiency.

The ONLY economical advantage to the GPS system on every vehicle, is the revenue gains for the tax system, and a financial loss for the consumer.

6 Comments:

Anonymous Gary said...

Robin,
The ONLY reason for the GPS system on every vehicle, is the revenue gains for the tax system, period. It's not about the consumer at all. And if they don't have enough revenue, see how fast they raise the per mile charges. And then they will get creative and charge more during the day than at night, more on holidays, more on weekends. I taught my granddaughter to say "a hammer is good but a big hammer is better" while we were working on a fence. The government just uses the biggest hammer and you better get out of their way.

9:20 AM  
Blogger Bobkatt said...

This line from the actual article doesn't make much sense to me:

"In essence, the system would track the number of miles traveled, and when they were traveled. At the pump, that information would be relayed electronically to a system that would deduct the tax from the overall price of the gas."

What does it mean that they would "deduct the tax from the overall price of the gas"?

I seem to remember during the original discussion on the Oregon plan they said something about deducting the tax at the pump from the GPS tax making the gas guzzler even more attractive in certain instances.

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