Thursday, June 23, 2011

More on a Vehicle Miles Travelled Tax

Greg Rosston at the Stanford Institute for Economic Policy Research spotted my post a week ago on choosing between the current gasoline tax and a vehicle miles travelled tax as a way of funding highway infrastructure.  He passed along a June 2011 SIEPR Policy Brief by Kumi Harischandra, Justine Isola, Lazeena Rahman, and Anthony Suen on this issue.

They provide a useful table showing different levels of the gas tax, and revenue-equivalent levels of a vehicle-miles traveled tax. For example, the current federal gas tax of 18 cents/gallon is equal to a vehicle-miles traveled tax of about penny per mile. A federal gas tax of $2/gallon would be equal to a vehicle miles travelled tax of about 10 cents per mile.

They make a case: "Although gas taxes advance environmental stewardship and energy security, VMT fees provide a more sustainable future for funding of transportation infrastructure."

My own sense is that there are multiple policy goals here: funding transportation infrastructure, reducing fossil fuel use for a variety of reasons, and addressing traffic congestion. It may take several policy tools--perhaps including a fuel tax and a vehicle-miles traveled tax and congestion pricing--to hit all three goals.