New pay per mile scheme would boost taxes 250 percent

An on-again, off-again move by the Obama administration to scrap the federal gas tax in favor of a pay-per-mile fee would boost the tab to Americans as high as 250 percent, raising their current tax of 18.4 cents a gallon to as high as 46 cents, according to a new government study.

But without a tax increase, said the Government Accountability Office study, the government’s highway fund is going to go dry. One reason the fund is going broke: President Obama’s push for fuel efficient cars has resulted in better mileage, and fewer stops at the pump.

The GAO study is just the latest review of federal spending that paints a grim picture of the nation’s infrastructure. Just keeping spending at current levels, the GAO said, would require a near doubling of the gas tax to 32 cents a gallon, and that would jump to as high as 46 cents should the federal government add spending to fix crumbling infrastructure and build new roads.

The average driver pays about $96 a year in federal gas taxes, said GAO. Should the administration seek to raise the highway trust fund from $34 billion to the $78 billion needed to fix and maintain roads, that could rise to $248. Translated into a pay-per-mile plan, drivers would face a tax of 2.2 cents per mile compared to the 0.9 cents they pay now. Trucks would pay far more.

“We modeled the average mileage fee rates that would be needed for passenger vehicles and commercial trucks to meet three illustrative Highway Trust Fund revenue targets ranging from about $34 billion to $78.4 billion per year. To meet these targets, a driver of a passenger vehicle with average fuel efficiency would pay from $108 to $248 per year in mileage fees compared to the $96 they currently pay annually in federal gasoline tax,” said GAO.

The administration floated that plan in the first term, but scrapped it when it was met with public outrage. However, several states and some in Congress are now eyeing the plan, keeping it alive as a federal option.