Pete Langr: Guess who's thinking about a new tax?
The word "tax" may be the scariest word in our language. The threat of taxes is so fearsome that the governor can boast of almost no significant policy initiatives and still maintain relatively high approval ratings. With the phrase "no new taxes...
The word "tax" may be the scariest word in our language.
The threat of taxes is so fearsome that the governor can boast of almost no significant policy initiatives and still maintain relatively high approval ratings. With the phrase "no new taxes" on his lips and a friendly personality, the governor gets along just fine, and we don't have to be afraid.
Congressman Oberstar recently had the audacity to suggest a mileage tax for autos, and the resulting outcry was as predictable as it was unenlightening.
After Oberstar's comments, we were treated to the usual litany of "no new taxes" rhetoric. We heard about how our taxes are already high enough. We heard that we pay gas taxes, so we shouldn't have to pay a mileage tax. We heard from high-mileage drivers, who don't think they should pay extra for the privilege.
In truth, the result of the tax fight between the governor and the legislature will be little noticed either way. On the huge background of the state budget and this year's massive shortfalls, most of us wouldn't have noticed the tax increases, and most of us won't notice Pawlenty's cuts.
Sooner or later, though, we need to learn to have a sensible discussion about taxes, without the brain-freeze that seems to develop in many when they hear the word "tax."
We need to talk about the fact that a tax break for some group is usually an increase for another. We need to talk about which taxes go where, and we need to look seriously at the side effects of every tax.
Simply spouting "no new taxes" doesn't do anything for that discussion. But, if you agree, with many experts, that transportation isn't being funded properly, then Oberstar's proposal is a good place to start.
Oberstar, for years, has been an advocate for modern, high-quality transportation systems. With that mindset comes the need to find funding. The gas tax is supposed to do that, but it's not enough. What's worse is that, while infrastructure needs are increasing in cost, gas tax receipts have been falling.
That problem is going to get larger, because new fuel-efficiency standards mean we'll be buying less gas -- even if we drive more.
On top of that, there's a small trickle of alternate fuel and plug-in electric cars hitting the roads now, and if that trickle grows, we'll see another drop in gas-tax receipts, because those drivers pay no tax at all.
So do we want roads? Then we're going to have to change how we get the money to do it.
The mileage tax has plenty of legitimate questions. One is the privacy issue of having a government GPS on our vehicles. Those concerns might be alleviated by realizing that it's not necessary to store vehicle location or trip date to be able to tax for mileage.
Others worry that the mileage tax isn't "green," since with the gas tax those with fuel-efficient vehicles pay less tax, while with mileage taxes all vehicles might pay equally.
But it would be easy to adjust the mileage tax based on the type of vehicle, and if we want fuel-efficient vehicles to pay less, as they do now, that would be an option.
The mileage tax may have other benefits. It can be higher for those who drive on the most-expensive roads, or the most-congested roads. (If you're in the "no new taxes" crowd, make that to read "a tax break for those who drive on less expensive or less congested roads.") The effect of such a higher rate would eventually mean that fewer Americans would clog roads at peak times and locations, making for less -- and cheaper -- road construction and faster commutes.
Ironically, such a scenario might mean less taxes overall.
Of course, if we can't think of a new way to fund roads, there's always the ability to stick solely with the gas tax. But that tax, per gallon, may need to rise dramatically if it's going to be able to fund transportation while people buy less and less gas.
I'm personally OK with that. I'm planning to drive less than average, in higher-mileage cars. People like me won't pay too much of that tax.
Meanwhile others may eventually pay a small fortune every time they fill up.
If that scenario rubs you the wrong way, then perhaps we all ought to quit having conniptions every time the word "tax" is used and begin to discuss things like rational human beings.
That's not impossible. Governor Pawlenty has signed a bill to appropriate $5 million to study a mileage tax. Presumably there's at least one new tax he would consider.
Pete Langr lives and works in Duluth. E-mail him at email@example.com . Langr writes once a month for the Budgeteer News.