For decades, federal roadway maintenance and other infrastructure spending has been primarily funded through a national gasoline tax. If America’s crumbling roads are any indication, however, the tax is not generating enough revenue to keep up with infrastructure needs. For one, the tax has stood at 18.3 cents per gallon for nearly 30 years, meaning its value has been undermined by inflation. On top of that, with the push for more electric and fuel-efficient vehicles across the U.S., some worry that gas tax revenue will only further diminish, even as the country’s infrastructure needs grow.
Enter the vehicle miles traveled tax, or VMT tax. The idea is simple: Taxing every mile traveled by a given driver is the most precise way to tax the actual use of infrastructure, allowing funding to automatically keep up with the amount of wear and tear. In 2006, a Department of Transportation-commissioned report called the idea “the most promising technique for directly assessing road users for the costs of individual trips.” Oregon and Utah have introduced state-level versions of the policy.
At the federal level, however, policymakers have been more wary about a VMT ta... Read more