Congress Wants to Tax You by the Mile
Sept 24, 2021 23:35:21 GMT -5
Post by leilani on Sept 24, 2021 23:35:21 GMT -5
September 24, 2021
Congress Wants to Tax You by the Mile
By Kevin Cochrane
Have you ever stood in front of the shelves of toilet paper at your local market and tried to figure out the best deal? Jumbo rolls, super jumbo rolls, mega rolls, 8-packs, 12-packs, one-ply, two-ply. It's maddening. I'm an economist, and I can't figure it out, so I choose not to waste the brain cells on it. I just pay whatever and go my way. It's called "rational ignorance" — I choose not to spend the effort to figure it out. We'll come back to this.
Jumping to the recent $1-trillion infrastructure bill, one can find buried deep inside it — page 508, to be exact — a proposal to test a new tax for driving. It's a mileage tax — essentially, a user fee for roads. Drive X miles, pay Y cents per mile to the government. Unlike most tax proposals, surprisingly, there may be some logic to this idea. Not much logic and we should all be leery, but let's break it down and see what's really going on.
First, drivers of vehicles that run on gasoline or diesel already pay a per-mile tax. It's not calculated that way, and nobody figures it out that way — remember rational ignorance — but, effectively, the federal (and state) taxes on petroleum fuels are a mileage tax. Currently, the federal government gets 18.3 cents in excise taxes on every gallon of gasoline sold. It's stated as a "per gallon" tax, but one could think of it as a mileage tax.
Here's another way to consider the federal 18-cent-per gallon tax. If your car gets 18 miles per gallon on average, that means you are paying a tax of a penny per mile. More per mile if your vehicle is less efficient, and obviously less per mile if you get 25 or 30 mpg. But, because of rational ignorance, nobody figures it out this way. Nobody looks at his 18 mpg car and thinks, "I have to pay the government 25 or 30 cents to visit my grandmother across town."
So why the big switch to openly calculating highway taxes by the mile rather than disguising it by the gallon? You gotta see this one coming. Electric vehicles! That's right: E.V.s don't use gas, so they don't pay any highway taxes. And, with the liberal push to make everyone abandon fossil fuel-powered transportation, the money for roads has to come from somewhere.
Okay, that seems to make sense, but as they say on TV game shows, there's more!
Continued at the link
Congress Wants to Tax You by the Mile
By Kevin Cochrane
Have you ever stood in front of the shelves of toilet paper at your local market and tried to figure out the best deal? Jumbo rolls, super jumbo rolls, mega rolls, 8-packs, 12-packs, one-ply, two-ply. It's maddening. I'm an economist, and I can't figure it out, so I choose not to waste the brain cells on it. I just pay whatever and go my way. It's called "rational ignorance" — I choose not to spend the effort to figure it out. We'll come back to this.
Jumping to the recent $1-trillion infrastructure bill, one can find buried deep inside it — page 508, to be exact — a proposal to test a new tax for driving. It's a mileage tax — essentially, a user fee for roads. Drive X miles, pay Y cents per mile to the government. Unlike most tax proposals, surprisingly, there may be some logic to this idea. Not much logic and we should all be leery, but let's break it down and see what's really going on.
First, drivers of vehicles that run on gasoline or diesel already pay a per-mile tax. It's not calculated that way, and nobody figures it out that way — remember rational ignorance — but, effectively, the federal (and state) taxes on petroleum fuels are a mileage tax. Currently, the federal government gets 18.3 cents in excise taxes on every gallon of gasoline sold. It's stated as a "per gallon" tax, but one could think of it as a mileage tax.
Here's another way to consider the federal 18-cent-per gallon tax. If your car gets 18 miles per gallon on average, that means you are paying a tax of a penny per mile. More per mile if your vehicle is less efficient, and obviously less per mile if you get 25 or 30 mpg. But, because of rational ignorance, nobody figures it out this way. Nobody looks at his 18 mpg car and thinks, "I have to pay the government 25 or 30 cents to visit my grandmother across town."
So why the big switch to openly calculating highway taxes by the mile rather than disguising it by the gallon? You gotta see this one coming. Electric vehicles! That's right: E.V.s don't use gas, so they don't pay any highway taxes. And, with the liberal push to make everyone abandon fossil fuel-powered transportation, the money for roads has to come from somewhere.
Okay, that seems to make sense, but as they say on TV game shows, there's more!
Continued at the link