Driving Tax vs Gas Tax

February 23, 2010

This post was inspired by: an article from the Washington Post. Currently we pay a tax on each gallon of gasoline we buy. Part of it is Federal, part State, and possibly even a local part (don’t know anywhere like this, but it is a possibility I suppose). As we move toward more fuel efficient vehicles (be they motorcycles, hybrids, or whatnot), the amount of tax money is decreasing. Obviously, the governments dislike this as they need that money to keep the roads up, one of the things that has been suggested is to replace the per gallon tax with a “Per Mile Driven” tax. This would mean that the cost of filling up, be it a hybrid or a truck would be much closer in cost. Sounds good for the gas guzzling truck, but not so much for anyone who bought a more fuel efficient vehicle to save on gas fill ups (and/or pretends to care that they really bought it to make the environment better). Were something like this to pass it could put a serious dent into hybrid sales and also standard motorcycles (like the Suzuki Boulevard S40). Since Standard bikes are fairly cheap (new and used are generally well under $5k) and get good fuel economy (40-80 mpg depending on the model), they are popular sellers when gas prices start to rise, as they usually pay for themselves in a few months, depending on your commute (not to mention the awesomeness that is a motorcycle). Hybrids on the other hand are less of an impulse buy as they are quite costly. The main reason people suffer this cost though is because they are getting a savings at the pump. Remove that savings and hybrid sales will slump. When Jon and I discussed this new tax, we kept coming back to the same question: How can you, the government/tax collector, prove how many miles I’ve driven?