Could pay-per-mile taxes become the norm?

As more and more people switch to vehicles with better gas-mileage ratings, or eliminate gas usage altogether, some states are losing gas-tax revenue. Several states have begun testing a “pay-per-mile” tax plan to help replenish the lost income. This new concept involves tracking the number of miles that a vehicle travels, possibly using a transponder, and having a flat-rate charged per mile.

Oregon has started testing their OReGO volunteer program that charges 1.5 cents per mile and gives a credit towards their fuel tax when they fill up. Illinois is proposing to adopt a similar solution, but it would completely replace the fuel tax and require all Illinois motorists to apply and install a transponder. If drivers aren’t comfortable with the idea of their travelling being monitored, they can opt to pay a flat $450 tax each year, which would equal 30,000 miles at the same 1.5 cents per mile.

Illinois State Sen. John Cullerton, who proposed the new system, places blame directly on “Prius owners”. The Toyota Prius, which has sold over a million vehicles in the US, averages around 46mpg. Electric vehicles are gaining in popularity every year, and most gas vehicles are becoming more fuel efficient, so it’s understandable that the states will see a drop in gas-tax revenue. So at some point there will need to be a replacement for gas-taxes. However, this seems like a bit of a step backwards for “progress”. The incentive for buying and driving a fuel efficient or even electric vehicle was that you’d be saving money; under a per-mile system, that benefit would not be so great.

Comparing total costs with fuel tax against road usage charge in a 2014 Toyota Prius and a 2014 Ford F-150. From http://www.myOReGO.org

Do you think we should all be taxed based on how much we drive?