GPS May Help Create a New Tax

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Some state governments are seriously looking at the possibility of using GPS tracking to help create a brand new tax. If you are a GPS enthusiast, this probably sounds like one of the least desirable applications of your favorite hobby. When you know just how the proposed tax will work, however, you might agree that it makes a lot of sense.


The story begins with electric and hybrid cars, which are slowly becoming more common on the roads. In the northwestern U.S., lawmakers are growing concerned about the fact that because these cars consume less gas than traditional vehicles, drivers will end up paying far less each year in gas taxes. These taxes are the primary source of funding for road building and repair, and a reduction in that funding could create a real budget problem for state governments.


In order to get these drivers to pay their fair share for using the roads, lawmakers want to use GPS tracking to identify how many miles each electric or hybrid car travels per year. The driver would then pay a “per-mile” tax, ideally contributing a similar amount to the gas tax for a comparable vehicle.


Hybrid car owners who pay a per-mile tax would get a credit for the tax on the gas that they do buy, so that they wouldn’t end up paying more tax money than other drivers. But there are other questions, too: What happens when cars leave the state? Should drivers pay taxes on the miles they drive through parking lots, on private driveways, or other areas not maintained by tax dollars?


Lawmakers hope that GPS tracking can provide the solutions to these problems. An accurate GPS system could track only miles driven on state-maintained roads, “stopping the odometer” when the car moves into private territory. Oregon is already testing this method on a small scale, and is excited about the initial results.


Of course, resistance from the auto industry exists, with many experts claiming that the tax would hurt the public’s interest in efficient cars. It is difficult, though, to argue with the state government’s statement that those who use the roads should pay for the privilege. If drivers aren’t buying gas, GPS tracking could help the government continue taxing them in a fair way.

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Mark Rummel

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