Taxing Drivers By The Mile: Part II

Ed Stasiak wrote:
> BBC News
> Sunday, 5 June, 2005
> http://news.bbc.co.uk/1/hi/uk/4610755.stm
>
> 'Pay-as-you-go' road charge plan
>
> New charges could be used to tackle road congestion
> Drivers could pay up to =A31.34 a mile in "pay-as-you go"
> road charges under new government plans.
>
> The transport secretary said the charges, aimed at cutting
> congestion, would replace road tax and petrol duty.
>
> Alistair Darling said change was needed if the UK was to
> avoid the possibility of "LA-style gridlock" within 20
> years.
>
> Every vehicle would have a black box to allow a satellite
> system to track their journey, with prices starting from
> as little as 2p per mile in rural areas.
>
> Mr Darling has outlined his proposals to the BBC - previewing
> a speech he will give to the Social Market Foundation on
> Thursday.
>
> "The advantage is that you would free up capacity on the
> roads, you would reduce the congestion that we would otherwise
> face and you would avoid the gridlock that you see in many
> American cities today," he said.
>
> "This is a prize well worth going for. We've got to ask
> ourselves: would it work. Could it bring the benefits that
> I believe it could bring, because it would make a real change
> to the way we drive in this country."
>
> A satellite tracking system would be used to enforce the
> toll, with prices varying from 2p per mile for driving on
> a quiet road out of the rush hour to =A31.34 for motorways
> at peak times.
>
> The Department of Transport says the scheme would be fairer
> because those who travel greater distances would pay the most.
>
> "We have got to do everything we can during the course of
> this parliament to decide whether or not we go with road
> pricing," Mr Darling said.
>
> If public reaction is favourable, a pilot scheme planned
> for the Leeds area could be rolled out nationwide within
> the next 10 years.
>
> It is more likely to make people think about the cost of
> a journey before undertaking it
>
> The Environment Agency's Nick Rijke warned that shifting
> money away from fuel duty would take away the incentive for
> people to use green vehicles.
>
> And AA Motoring Trust director Bert Morris said there were
> a number of issues which needed to be addressed.
>
> "Tourism is car-based in this country. Would we have empty
> hotels on summer days on the coast if people couldn't afford
> to drive?"
>
> It was also important to ensure that drivers with less money
> were not penalised, Mr Morris added.
>
> RAC Foundation spokeswoman Sue Nicholson said the plan
> could help counter a projected 45% growth in congestion
> problems by 2030.
>
> "Providing this tax was substitutional to fuel tax and road
> tax and provided we had some other guarantees then I think,
> for a lot of people, this would be a tempting option," she
> said.
>
> Environmental group Friends of the Earth broadly welcomed
> road charging but warned the transport crisis could only be
> tackled if money raised was invested in improving alternatives
> to car travel.
>
> Professor Garel Rhys, director of the Centre for Automotive
> Industry Research at Cardiff university's business school,
> believed road pricing would have to be introduced in the UK.
>
> But he warned: "The key is trying to introduce those tolls
> without affecting the flow of traffic, ie. not having to
> stop and pay at a booth which caused congestion itself.
>
> "Governments will upset at their peril society's wish to do
> what it wants to do and that is to move around."

Associated with demand pricing of roads is the pricing policy for
electricity. In some places, the pricing plan for electricity is set so
the big users pay for both capital cost and operating cost and the
small user pays only for operating cost or at most only a small portion
of the capital cost. This pattern follows from GE's (??) marketing
genius of electricity in Chicago.

The capital charge is called demand charge. Usually based on the
highest half hour usage in the previous eleven months. Demand charges
are often higher than the energy charges for a large user.

One problem of demand pricing is that the large user passes on the
costs to those that buy their goods and services. A large building
manager just increases rental. A smelter just raises the price of
metal. In the process, adding on a handling fee. So the big users of
electricity don't care about higher demand charges. Higher demand
charges equate to more profit.

Big users get a break on demand charges by agreeing to dump electrical
load in peak periods. Problem with this agreement is the peak hits and
the user is asked to dump load. But then the user doesn't honor his
agreement. The rice drier does not interupt his rice drying, but
continues to use electricity. The electrical generator/distributor has
to dump foundries and smelters. Then the generator/distributor has to
pay huge penalties to the foundries and smelters to replace furnaces
and ruined product. The rice drier could have shut down in an orderly
fashion when first notified.

I expect something similar will happen on demand pricing of roads.
Heavy users will agree to off peak use for lower prices and then find a
way to put their vehicles on the road during peak.

Fuel taxes are set somewhat higher in the United States for diesel
(about six cents a gallon Federal) and excise taxes on tires weighing
over a base weight in order to collect more from heavy users who are
not as likely to scream, since they can pass the costs on to their
customers. Some truckers do have travelling ads on the back claiming to
have paid thousands in fuel taxes. Just another way of saying why
shipping costs are up.

The further problem with trying to control demand with pricing policy
is the trolls that come out of the woodwork and even get off their
death beds to cry that tolls won't work. Or the Transportation Boards
and politicians that look on tolls as found money. Or the Congressman
that consider ride-sharing on Shirley Highway in northern Virginia to
be some type of crime.

Jon Enslin wrote:
>
> What I don't understand about this is that a basic gas tax already
> taxes those who use the roads more right? So this plan would tax those
> that use certain road even more. Is that worth the costs associated
> with setting up and monitoring this program? Just so you can shift
> revenue from those travelling in the country to those travelling in the
> city?

A few notes on Jon's comments/questions:

- The urban areas are already generating the bulk of gas tax revenues.

- Even with more vehicles and more vehicle miles driven, increases in
fuel economy have resulted in gas tax revenues not keeping up with
neither inflation nor the increase in vehicle miles traveled. At least
with a mileage tax, the revenue collected would keep pace with VMT.

- I've toyed with the thought/concept of the US eventually using a
mileage-based tax in lieu of the current federal gas tax....such a
system, IMO, would not need to be satellite based...just a matter of
odometer readings (though I do realize that odometers can be tampered
with), which could be done in conjunction with the annual registration
cycle. Vehicles entering or departing the country could have their
odometers checked at Port of Entry/Customs. A system could be phased
in at the same time the gas tax is phased out, so that it's at least
revenue-neutral at the beginning.

Froggie | Underway onboard USS McInerney (FFG-8)

There are two things that concern me greatly about this proposal:

1) Even if the existing system of gas taxes and user fees doesn't begin
to cover existing needs, it is still far, far preferential, IMHO, to a
privatized system of charging tolls by the mile...especially since the
bulk of the charges would be more than likely charged on freeways. How
they would be able to force a charge on other less access-controlled
facilities remains a mystery to me. At least with the existing system,
road users are insured for the most part that their gas tax money is
going toward highway construction, rather than being siphoned into
politicians' pockets or diverted into other programs. I'm not too sure
that most drivers -- especially those who aren't so wealthy and don't
drive long commutes on freeways -- would appreciate the idea of paying
a fee to a faceless privatized entity.

2) Although I'm a great believer in using mass transit as an
accompaniment to highways, and do believe that transit is woefully
underfunded and abandoned to this day, I'm strongly opposed to
targeting auto users for exclusive taxation merely to force them into
using transit more. That sounds to me like a form of fiscal "social
engineering" mounted by the type of pseudo-radical who argues that the
only solution to ecological issues and traffic congestion is to
confiscate all cars, tear down all freeways (or at least, privatize
then and charge tolls so expensive to fund rail and bus-based transit),
and raise the price of oil/gas to the point that auto use would be
simply beyond the reach of most people. I may be a progressive and an
enviromentalist, but I don't go THAT far...I still respect people's
right of free choice, and understand why they still prefer private
cars.

Having said all that, though, I also find Froggie's idea of a
mileage-based tax quite intriging; especially when used in conjunction
with the federal gas tax to raise revenue. I would be more keen to
keeping the Federal gas tax for Interstate and major projects; I'd
prefer the states or (the local/regional authorities) use the
mileage-based system to fund their needs.

My nickel....

Anthony

> 1) Even if the existing system of gas taxes and user fees doesn't
> begin to cover existing needs, it is still far, far preferential,
> IMHO, to a privatized system of charging tolls by the
> mile...

Absolutely. Tollboths and / or complicated and expensive toll collection
equipment is insane, and those who think a for profit private company has
the public's best interest in mind are equally as insane. The idea of
sattlite monitoring is just absurd.

> diverted into other programs. I'm not too sure that most drivers --
> especially those who aren't so wealthy and don't drive long commutes
> on freeways -- would appreciate the idea of paying a fee to a
> faceless privatized entity.

You got it there. A company's only goal is to extract as much money from my
pocket as possible.

> Having said all that, though, I also find Froggie's idea of a
> mileage-based tax quite intriging; especially when used in conjunction
> with the federal gas tax to raise revenue.

It is a way overly complex way to do a simple job.

JUST pay the road tax at the fuel depot. If it's not suffcient, increase
it. Problem solved. No sattelites, transponders, road blocks or big
brother otherwise watching over you.

Scott en Aztlán wrote:
> On Tue, 7 Jun 2005 09:46:07 -0400, "JohnH" >
> spake thus:

>>JUST pay the road tax at the fuel depot. If it's not suffcient, increase
>>it. Problem solved.

> Except they can't raise it, because the electorate will vote down any
> tax increase (or vote out the guys who instituted it).

If that is indeed the case, then why would the same argument not apply
to those politicians that propose the satellite based GPS system as a
method of collecting tolls?

On Mon, 6 Jun 2005, Ted B. wrote:

>>> "Result: Almost all road maintenance paid by the poor and middle
>>> class, and almost NOTHING paid by the rich for maintaining the roads."

> > I don't undertstand how the rich pay almost nothing but the poor pay
> > more under that scheme. The fees are based on where you are driving
> > from and not on what you make (or own). If a rich man and a poor man
> > each commute 30 miles to the city center they pay the same amount to
> > use the roadway.

> Simple: The rich can afford to live close to where they work, IF they
> work.

But *do* they live close to where they work, in general? I'd say no, they
tend to live in the far-flung gated suburban communities.

"Jon Enslin" > wrote
Ed Stasiak wrote:
> >BBC News
> What I don't understand about this is that a basic gas tax already
> taxes those who use the roads more right? So this plan would tax those
> that use certain road even more. Is that worth the costs associated
> with setting up and monitoring this program? Just so you can shift
> revenue from those travelling in the country to those travelling in the
> city?

Well, Jon, in some cases it's being looked as an alternative,

and because gas tax revenue goes down as mileage goes up.

Here's a recent article that may prove interesting.



BTW. You need to turn off HTML - newsgroup netiquette is for plain text.

Floyd R

----------------------------------

Oregon test-drives mileage-tax option

By The Associated Press

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SALEM - Plans are moving ahead to explore taxing Oregonians according to
miles driven rather than through a gasoline tax.

A one-year test is planned for Portland beginning next March involving about
300 drivers.

The cars will be equipped with a Global Positioning System (GPS) receiver to
record miles driven.

When the participants - who have not yet been selected - buy fuel at either
of two stations in the Portland area, they will be charged a road tax and
will get a refund of the state's 24 cent-per-gallon gas tax they paid.

If they buy gas at other stations, they'll go to a stand-alone reader to
have their mileage recorded and refunds figured.

For driving out of state, as recorded by the onboard receivers, no mileage
fee will be charged.

Prior to the Portland test, the Oregon Department of Transportation plans a
test in Salem this fall with 20 volunteers who will do a test drive with the
devices for 60 days.

The project is the outgrowth of a task force created by the 2001 Legislature
to look to alternatives to the gas tax as the sole means of paying for
roads.

The Legislature worried that better gasoline mileage and alternatives to
gasoline would make the state run short of money to build and maintain
roads.

The Federal Highway Administration has given Oregon $2.1 million toward the
$2.9 million cost of the mileage-tax test.

Jim Whitty, manager of the Office of Innovative Partnerships and Alternative
Funding in the Oregon Department of Transportation, said the original
schedule had the test happening in Eugene.

But he said most gas stations there are owned by major companies who were
reluctant to take part. "We had interest from one of the majors in perhaps
assisting us, but that melted away," Whitty said.

He said an independent dealer with multiple stations in Portland likely will
take part.

Witty said the GPS units will not send out signals, just receive them, so
vehicles cannot be tracked.

Whitty says he thinks the new tax system likely would not kick in for 10
years and that it would have to be taken up on a national basis.

>> Absolutely. Tollboths and / or complicated and expensive toll
>> collection equipment is insane, and those who think a for profit
>> private company has the public's best interest in mind are equally
>> as insane. The idea of sattlite monitoring is just absurd.
>
> Your conclusion ("satellite monitoring is just absurd") does not
> follow from your premises. The GPS satellites are owned by the US
> government, and the program could easily be administered by USDOT or
> some other federal agency - a "for-profit private company" is by no
> means an essential component of the concept.

Do you REALLY think government would be an efficient entity to develop,
implement and maintain a high tech GPS based vehicle tracking system?

Here, in The Real World, the government farms out such things it has no
knowledge of to private companies who make huge profits from them - ever
heard of red light cameras?

> The fact is, satellite monitoring is the ONLY way to fairly determine
> which roads (or road jurisdictions) you drove on - and therefore how
> your tax money should be distributed. Everyone should pay for the
> roads they use - and NOT have to pay for the roads they don't.

Ridiculous. Everyone uses roads, either first hand or vicariously by using
the goods delevered to them over these roads. To try to nickel and dime
everyone down to the mile of actual use is just silly and wasteful.
If you're going to be accurate with your scheme, you will also need to
include a *dynamic* weight, temperature, friction and G calculation (and
probably other factors) to actually see how much road wear you should be
billed for. Does it still sound like a great government project?

>> It is a way overly complex way to do a simple job.
>
> If the simple way was working, these proposals would't keep coming up.

The simple way IS working.

>> JUST pay the road tax at the fuel depot. If it's not suffcient,
>> increase it. Problem solved.
>
> Except they can't raise it, because the electorate will vote down any
> tax increase (or vote out the guys who instituted it).

And you think people are just going to roll over for Big Brother monitoring?
Who isn't going to attempt to defeat it?

"Scott en Aztlán" wrote:
>
> On Tue, 7 Jun 2005 09:46:07 -0400, "JohnH" >
> spake thus:
>
> >> 1) Even if the existing system of gas taxes and user fees doesn't
> >> begin to cover existing needs, it is still far, far preferential,
> >> IMHO, to a privatized system of charging tolls by the
> >> mile...
> >
> >Absolutely. Tollboths and / or complicated and expensive toll collection
> >equipment is insane, and those who think a for profit private company has
> >the public's best interest in mind are equally as insane. The idea of
> >sattlite monitoring is just absurd.
>
> Your conclusion ("satellite monitoring is just absurd") does not
> follow from your premises. The GPS satellites are owned by the US
> government, and the program could easily be administered by USDOT or
> some other federal agency - a "for-profit private company" is by no
> means an essential component of the concept.
>
> The fact is, satellite monitoring is the ONLY way to fairly determine
> which roads (or road jurisdictions) you drove on - and therefore how
> your tax money should be distributed. Everyone should pay for the
> roads they use - and NOT have to pay for the roads they don't.
>
> >It is a way overly complex way to do a simple job.
>
> If the simple way was working, these proposals would't keep coming up.
>
> >JUST pay the road tax at the fuel depot. If it's not suffcient, increase
> >it. Problem solved.
>
> Except they can't raise it, because the electorate will vote down any
> tax increase (or vote out the guys who instituted it).

And they won't vote out the guys who insttitute pay per
mile? It is really the same thing.

Ed

"Scott en Aztlán" > wrote in message
...
> On Tue, 7 Jun 2005 09:46:07 -0400, "JohnH" >
> spake thus:
>(snip)
solved.
>
> Except they can't raise it, because the electorate will vote down any
> tax increase (or vote out the guys who instituted it).
>
> --
Like we won't vote out (at a minimum) the clueless assholes that try to
require us to put a transponder in our cars, and leave an audit trail of
everywhere We drive? (We, as in We the People...)

Given how tall that mountain of data would be, I don't think anyone has the
infrastructure to even try setting up such a system. Even if they did, the
transponders would get hacked as hard as cell phones and satt dish boxes do.

aem sends...