Op-Ed: Instead of a New VMT Tax, Raise the Gas Tax

"Americans are increasingly driving hybrid and electric-only cars, reducing emissions and curbing gasoline consumption — accomplishing key goals of the Biden administration," writes Justin B. Hollander. But "[i]mposing a new Vehicle Miles Traveled (VMT) tax," included in the infrastructure bill passed by the Senate last week, "would likely flush away all those prior investments in efficiency and remove much of the incentive for someone to purchase and operate a hybrid or electric-only car." 

"Presently, the 18.4 cents (or 24.4 cents for diesel) per gallon gas tax generates over $30 billion annually to help pay for a range of highway, rail and other transit costs," but "critics worry that our increasingly fuel-efficient vehicles, move towards fully electric cars and a decline in overall car use threaten the fiscal future of national transportation funding." In Hollander's view, "the answer for the U.S. DOT is to simply increase the gas tax and get more cars off our roads."

"The gas tax has been shown in numerous research studies to be an effective policy tool that discourages driving and encourages the use of public transit. If the U.S. DOT needs more money, then they ought to seek out congressional support for raising the gas tax — it has not increased since 1993,"  argues Hollander. "Create a brand new, national-level taxation system based on vehicle miles traveled and you will discourage the use of environmentally friendly cars and do nothing to actually make us safer from the hazards of cars and trucks."