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A pay-as-you-go tax scheme for motorists may incentivize less driving while generating the revenue necessary to improve our transportation sector


Do you own a hybrid or electric car? If you do, great! You’re a superstar. And if you don’t? Don’t worry, you will eventually. Environmentally-conscious cars are on the rise and expected to explode in efficiency and affordability in the coming years, but as with all new innovations there are unforeseen consequences playing out in the most unlikely of places. As a greater portion of the population is coming to use less petroleum, states are losing revenue on the tax normally collected on oil at the pump; revenue that is often used to fund public features such as roads and transit.


The company Transurban proposes that instead of taxing the oil, a toll of sorts could be placed on all cars on the road that would increase with the distance driven. This would generate the necessary money to fund public projects (the money is got to come from somewhere!) while hopefully incentivizing families and individuals to take more meaningful and brief car trips in the long run. Some may argue that this will de-incentivize the purchase of electric cars as now these owners will no longer be exempt from the petrol tax, but I suspect hybrids and the like will eventually outcompete traditional automobiles anyway as oil prices rise and renewables become widely available, but perhaps in the short-term there is validity to that criticism.


Regardless, test runs of this system are happening in Oregon soon (don’t worry, the participants are volunteers), so hopefully the effectiveness of this system will be known for sure. Obviously a schematic such as this will involve a national policy overhaul and investments in technology that can track cars constantly and quickly.

Read more about this proposal {here}

Earthgarage – Greener Car. Fatter Wallet.