6/6/2005

US, UK Move Toward Per-Mile Driving Tax
Oregon satellite road tax pilot begins this fall. UK announces plans for nationwide program.

Transportation officials in the US and UK are both moving toward a satellite-based tax on driving designed to encourage people to give up their cars and embrace public transportation. Under the plans, the current gas tax would be reduced or replaced in favor of a system where satellites would monitor the driving of individuals and charge more for those driving in popular locations at popular times. Under the British plan, motorists would be charged up to £1.34 (US $2.44) for each mile driven.

This fall, the Oregon Department of Transportation will implement a federally funded road tax pilot project. Twenty vehicles equipped with a GPS receiver will fill up at one of two special gas stations that download mileage information from the GPS device, charge the road tax and refund the amount of the gas tax automatically. Initially, the special black box will not record location data, just total mileage in-state and out-of-state, with the latter mileage being tax-free. Oregon hopes to expand the pilot to 280 vehicles by spring 2006. The $2.9 million pilot program is almost entirely funded by the Federal Highway Administration.

On Sunday, UK Transport Secretary Alistair Darling introduced his proposal for a similar nationwide road tax plan on Sunday. His proposal would add built-in "congestion pricing" by recording the places and times of travel. He wants a pilot program running in West Midlands or Greater Manchester within two years.

The gas tax is the main source for automobile taxation in both the US and UK. Although the US gas tax was initially designed to be a use tax to fund road maintenance and construction, about half of the money is diverted to other purposes. The amount of the tax in the UK has skyrocketed, accounting for 75 percent of the cost of gas and combined with other motorist taxes comprises 11 percent of the government's tax revenue.