By James Wigderson
Special Guest Perspective for the MacIver Institute
The other night I was playing cards with some friends when I asked them, “What do you think of the idea of the government asking you how many miles you’ve driven and then charging you for them?”
One of our friends replied, “Okay by me. I drive zero.” So much for honesty at the card table, and I should have expected as much.
So should the state Department of Transportation (DOT), which in a draft report is considering proposing a mileage-based registration fee, approximately a penny per mile. This is in addition to all of the other fees that go to fund our transportation system.
In other states that have conducted experiments with mileage-based registration fees, the mileage was tracked for each vehicle and the driver was charged accordingly. The mileage would self-report from a device in the vehicle using a GPS system.
Understandably, this has raised some privacy concerns. We don’t have to be Peg Lautenschlager to not want the government or anyone else to know where we’re driving.
Our neighbors that have electronic devices paying tolls are already discovering the loss of privacy. One New York divorce attorney told the Associated Press in 2007, “E-ZPass is an E-ZPass to go directly to divorce court, because it’s an easy way to show you took the off-ramp to adultery.”
When Minnesota conducted focus group testing mileage-based fees, they discovered that privacy was a major concern of drivers paying the tax.
“Initial reactions to the MBUF approaches tested were less than favorable. The higher technology approach [GPS reporting] drew stronger negative reactions, due to a concern of a loss of privacy; however, younger drivers were less adverse to the use of technology to determine the number of miles driven.
“Of the two approaches, the less technical option, relying on regular odometer checks, was preferred and considered the more ‘fair’ and acceptable method. However, this appears to be driven less by an affinity for the less technical option and more by an aversion to the more technical option.”
The “less technical option” is self-reporting mileage rather than trusting Big Brother to keep track of the mileage, and keep it to himself. Minnesota’s focus group report was willing to mollify the masses. It suggested, “Consider implementing a MBUF plan with stages to gradually transition from simple to more advanced to minimize public resistance.”
In other words, start with the self-reporting by my card playing friends. When they fail to report their mileage correctly, the state will move towards more intrusive methods of getting the data to charge them the full amount.
Because Big Brother is not going to like the self-reporting results. The drivers that will not be able to escape full reporting are those that have to report mileage on their taxes as a business cost. For the majority of drivers, mileage is something they only notice when it’s time to change the oil, and then they skip a few thousand miles here and there.
One needs to look no further than the state sales tax collection on out-of-state purchases, which is largely dependent on self-reporting. In 2010, just 1% of Wisconsin’s taxpayers reported owing sales tax on Internet and out-of-state purchases.
The report says it will create a mechanism for verifying mileage, but short of checking the records of your mechanics and turning them into IRS agents, there’s going to be a whole lot of pennies not going to the state as they hoped.
The DOT is looking for new sources of revenue to fulfill all of their transportation desires. They consider themselves to have been hit by a triple whammy. The state legislature stopped indexing for inflation the state gas tax. State borrowing for transportation, including the raids on the transportation fund by Governor Jim Doyle, means that more of the transportation budget is being eaten by debt service costs. And people driving more fuel-efficient cars, including electric and hybrid cars, are contributing less in gas taxes to the DOT coffers.
In addition to the proposed mileage fees, the state DOT wants to restore indexing to the gas tax, meaning automatic increases to the gas tax without an act of the legislature for each increase. They also want to index the auto registration fee as well. They want to increase the fees for a driver’s license by $20 and they want to eliminate the sales tax exemption for auto trade-ins. Perhaps most obnoxious of all, they want raise the annual registration fees on commercial vehicles by 73 percent. So much for Wisconsin being open for business, and it will be a cost we will all pay in the form of increased costs for goods and services.
But the likely invasion into the private lives of citizens by the government in pursuit of mileage based fees is especially obnoxious. It was rejected at the federal level by President Barack Obama. It hasn’t been tried in any other state because of the privacy concerns. Wisconsin should not be the first state to add Big Brother in the passenger seat, even if it gets us into the car pool lane.