Taxing Drivers by the Mile Is a Political Clunker

Thursday, The Hill’s “Floor Action” blog reported that the Obama administration was “floating” a plan to tax drivers according to the number of miles they drive. Administration officials, including White House spokeswoman Jennifer Psaki, were quick to push back on that characterization saying that the plan was “not an Administration proposal.”

However, hours after the news first broke and the White House dismissed the idea that the administration was pushing this, that notion is being disputed and the proposal and its implications are attracting closer scrutiny.

The goal of the plan, according to reports, is to boost federal revenue allocated towards highway repairs and construction, regarded by some political strategists as the kind of spending priority that voters of both parties can agree on. The amount of revenue allocable to highway repairs is a subject of concern because increased takeup of fuel-efficient cars–and electrics, which the Obama administration itself has heavily pushed–will sooner or later mean less federal gas tax money with which to fund highway spending.

Ironically, however, the plan, if implemented, could easily end up hurting President Obama politically. Setting aside that the vehicle miles traveled (VMT) tax would constitute a new tax, it would hurt drivers in big Western states like Nevada and Colorado, where people drive more and further, disproportionately. Those are both states on which Obama is reportedly relying to win a second presidential term. It could also seriously impact workers who drive extensively as part of their jobs, for example realtors and tradesmen.

Pursuit of the plan would also likely add to perceptions that the administration is out-of-touch when it comes to basic transportation issues relevant to average Americans. Recently, Obama and congressional Democrats have taken significant heat for high gas prices and what some characterize as a failure to implement policy to bring them down (or express advocacy of policies that critics say could drive them yet higher). Later this year, new CAFÉ standards applicable to vehicle model years 2017 and beyond are anticipated. Those standards are expected to be high, because the administration wishes to move more Americans into much “greener,” much more fuel-efficient cars.

That particular type of government interference of course would contribute to the problem a VMT tax seems designed to solve.