Big Brother eyes taxes by the mile

WorldNetDaily.com ^ | Tuesday, December 31, 2002

[JohnHuang2]

The latest proposal by government to collect tax revenue may seem out of this world – that's because it is.

The state of Oregon is considering the use of satellite technology to charge taxes based on how much mileage you drive your car.

The Road User Fee Task Force set up by the 2001 Legislature plans to ask the coming 2003 session to authorize testing the feasibility of a vehicle-mileage tax, according to the Associated Press.

In 1919, Oregon was the first state to adopt a gas tax, but revenues are expected to flatten as gas mileage improves and more hybrid cars come on line.

Jim Whitty, the task force administrator, says his group is looking at a per-mile charge of up to 1.25 cents to generate revenues equivalent to the current gas tax.

"We also have to have a way to track mileage only within the state," Whitty told the AP. This rules out basing the fee on odometer readings, which would include out-of-state driving.

"Technology has improved to the degree that this can be done, with an electronic device," he said.

The device in each car would be linked to a Global Positioning Satellite system, or GPS, which allows pinpoint navigation by bouncing signals off satellites.

The task force hopes to organize a test of this system if lawmakers approve, checking to see if the system even works, then conducting a yearlong evaluation.

There are several options for actually collecting fees. One is to send vehicle owners a monthly bill, another is to outfit gas stations so they can read vehicle transponders and collect the tax at fueling stops.

The new system would not do away with the current gas tax, but in doling out the new levy, drivers would get credit for gas tax already paid.

To protect drivers' privacy, using the system to track cars in real time would be illegal. New cars would be required to have the GPS technology. Owners of older cars would be allowed to take part by retrofitting them.

A final decision on the proposal is not expected to come until the 2005 legislative session at the earliest.

[JohnHuang2]

Tuesday, December 31, 2002

Quote of the Day by Texas_Jarhead news, frontpage WorldNetDaily.com

[The Obstinate Insomniac]

bump

[weikel]

Um I thought the gasoline tax kinda already covered this.

[garden variety]

Me thinks they have gone completely mad.

[Sabertooth]

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Page 1

Road User Fee Task Force

Preliminary Report to the Legislature

September 2002

Appendix S

S - 1

MEMO

July 1, 2002

To: Jim Whitty, Administrator

Road User Fee Task Force

From: Quintin Hess, Manager

Fuels Tax Group

Re:

Taxing Gasoline at the Pump

You have requested a memo outlining the issues involved in moving the taxation point of

gasoline in Oregon from the distributor level to the retail level, i.e. the pump. [Note: This

memo does not address issues pertaining to collection of VMT fees at the pump.] We

have identified a number of issues that should be taken into consideration before

proposing such a change.

1.

Increased ODOT Audit Presence

. No other states tax gasoline at the retail level

and haven't in the recent past. Consequently, data isn't available to study/forecast the

impact of such a move by ODOT. Many states have however, moved the taxation

point up the distribution chain. In virtually all cases, the states have enjoyed an

increase in revenues, although in some cases the increase has been temporary due to

evasion schemes subsequently developed that have reduced the increase. Moving the

taxation point down the distribution chain presents an interesting question. Would

the effect be the opposite of what happens when the taxation point is moved up? It is

difficult to say, but it would be

critical for ODOT to maintain a strong audit presence

and closely monitor revenues

in the event revenue decreases began occurring.

2.

Administration Costs Five or Six Times Greater

. Initial estimates place the cost of

administering a retail based tax program in the range of

$5 million to $6 million a

year

, and FTE would increase from 15 to a total of 67

. Start up costs could run as

high as $1.5 million.

The current program is administered at a cost of approximately

$1 million a year.

3.

Increased Taxpayer Error Rate

. Retail stations as a whole would likely make more

errors due to

less sophisticated accounting systems and accounting personnel.

4.

Increased Private Sector Reporting

. In order to `verify' the total amount of fuel

entering the state, it would be

necessary to track fuel from entry into the state, to the

ultimate sale.

This is necessary in order to insure that all fuel is being accounted for.

This would require

reporting by all levels of the distribution chain as well as by

motor carriers hauling bulk fuel.

---

Page 2

Road User Fee Task Force

Preliminary Report to the Legislature

September 2002

Appendix S

S - 2

5.

Evasion a Higher Percentage of Gas Tax Revenue

. A mitigating factor to this

move would be the decreasing reliance on the gas tax as a major source of revenue for

ODOT. The portion of ODOT revenue represented by the gas tax will be declining as

alternative tax programs are used. Any evasion incurred, while a higher percentage

of gas tax revenue, will be a progressively smaller percentage of total revenue.

6.

Unsophisticated Taxpayers

. Moving to the retail level would result in an increase in

taxpayers from approximately 200 to 1000. The amount of tax reported would run

the gamut and there would be a marked increase in smaller accounts. Initial

observation indicates that this smaller segment of the fuel industry

is more susceptible

to late payments and business failures

than their larger, more sophisticated suppliers.

As such, bad debts would be more numerous but smaller in amount. If this move

becomes likely, further analysis should be done to determine an estimate, if possible,

of the amount of loss ODOT could expect to experience.

7.

New Computer System Needed

. The change would necessitate a new computer

system to handle the increased number of licensees/taxpayers and the radically

changed tax structure. Extensive involvement by ODOT's IS staff would be

necessary to accurately estimate the cost of developing such a system.

8.

Electronic Data Filing Problematic

. The transmission of data electronically

becomes both beneficial and problematic at the retail level. Electronic based filing

would reduce data entry costs and the errors that go with it, but the less sophisticated

base of taxpayers may be

less accepting of mandated or voluntary electronic filing.

9.

Increased Demand for Governmental Exemptions

. A retail based tax structure

could potentially encourage the demand for exemptions by governmental bodies from

the federal level down to the local level. Exemptions from the retail based use fuel

tax currently exists for virtually all governmental bodies in Oregon. The retail nature

of the use fuel tax has contributed to the relative ease of administering the tax

program with the exemptions, and

moving the gas tax to the retail level would likely

facilitate political pressure to extend the exemptions to the gas tax

. In addition, legal

advice would be needed to determine if the state's ability to tax the federal

government could be maintained.

10.

Bucks National Uniformity Trend

. Industry buy-in to a retail based tax structure is

unknown, but would be critical to it's success. The change would go against a

nationwide movement toward uniformity. Multi-state operators would likely be very

concerned with the `uniqueness' of the Oregon system as it

would require a reporting

structure

on their end

completely different from any other state

.

11.

Increased Costs to Other Governmental Entities

. ODOT currently administers

local tax ordinances for Washington and Multnomah Counties, and the City of

Woodburn. The tax structure of these ordinances mirrors existing state law. If the

---

Page 3

Road User Fee Task Force

Preliminary Report to the Legislature

September 2002

Appendix S

S - 3

local governments chose not to follow a move to a retail based system, their

collection costs would go up as the efficiencies gained by having the same tax

structure as the state would be lost. Similarly, the tax structure for aircraft fuels

administered for the Department of Aviation is based on a distributor level tax.

Further analysis would need to be done to estimate the impact on these other tax

programs.

Thanks for the opportunity to provide input to the Road User Fee Task Force. Please feel

free to contact me for clarification of any of these points or for further information.

LINK

[supercat]

Um I thought the gasoline tax kinda already covered this.

It would have if all the mean nasty auto companies hadn't started producing some more fuel-efficient cars.

And if you think there's something contradictory about the liberals' demands, you may be onto something.

[Arthur Wildfire! March]

But Oregon needs more money to pay for all those gorest fires. To heck with rewarding fuel efficiency. In England, diesel drivers started saving money by using cooking oil. Rather than spend $5 a gallon, it went down to $2.50 a gallon. But the government didn't like that alternate fuel idea. So it is now a crime that will send you to prison in England to run your car off of cooking oil.

Maybe Oregon can add a bicicyle mileage tax as well. It causes more carbon dioxide, after all, to ride a bike. And then they can use the location system to catch speeders, dead beat dads, etc.

[Banjoguy]

Ain't a managed tax and spend socialist economy grand? Just ask the Russians! Actually I don't know who we are kidding here. Why not start at the end. Take all the wealth produced and give back what you think people can live on.

I once saw a mock W2 form That asked you to state how much money you made during the year. Then, at the bottom was the statement in bold caps: SEND IT IN....

[Clinging Bitterly]

>> they have gone completely mad

Just now?

[Clinging Bitterly]

>> Unsophisticated Taxpayers

AKA "Joe & Mary Sixpack" to other agencies of this state's government. We can always count on the most respectful, professional treatment from our government.

[StriperSniper]

In England, diesel drivers started saving money by using cooking oil.

Did the exhaust smell like fish & chips?;-)

[Clinging Bitterly]

> gorest fires

Didja mean to type it that way?

> So it is now a crime that will send you to prison in England to run your car off of cooking oil.

Well I don't know about other states, but in Oregon it's also a crime to use untaxed fuel on the highway.
The commercially available diesel that is untaxed (for off-road use) is colored red and truck tanks are checked. The law applies to auto use as well, but is not monitored so much there. Still, not paying fuel tax is a crime.

Matter of fact, Oregon realized early on that hybrids and electrics would use less or no liquid fuel, so the annual registration fee is double for them. Seems a disincentive to cutting oil use, pollution, and all that, as the government preaches we should do. But it goes right along with using the multibillion dollar tobacco settlement fund to help folks to quit smoking. Didn't happen, and it won't.

> Maybe Oregon can add a bicicyle mileage tax as well. It causes more carbon dioxide, after all, to ride a bike. And then they can use the location system to catch speeders, dead beat dads, etc.

You know, if a significant portion of the population relied on bicycles or public transportation, deadbeat dads would already be barred from their use, as would school aged kids who get bad grades.

Dave in Eugene

[Clinging Bitterly]

> Owners of older cars would be allowed to take part by retrofitting them.

Allowed to take part? How about allowed to not take part? I suppose they would be, if they chose to just not use ther cars. It is, after all, merely a privilege.

Newspeak. Learn it, Live it, Love it.

Dave in Eugene