What a Mileage Tax Might Mean for EV Owners

As EVs become more popular across the States, lawmakers are grappling with new ideas on how to raise money for critical infrastructure projects. Many are considering the benefits of a mileage tax instead of the traditional federal gas tax, and what that might mean for the future of electric vehicle adoption here in the US. 

The federal gas tax stands at 18.4¢ per gallon (not counting individual state tax), and hasn’t changed since 1993. With the new vehicle miles-traveled (VMT) tax, would instead propose taxing drivers based on how much they drive, instead of how many gallons they pump into their car’s tanks. Just last month, the Secretary of Transportation expressed openness to the idea, saying, “If we’re committed to that view, then whether it’s upstream or at the vehicle level, some kind of road usage assessment is going to be necessary,” Buttigieg said. “The trouble is that nobody’s been able to present a version of that that fully resolves the privacy concerns and technical issues, but we certainly see some things being done, especially on the commercial side, that demonstrate that we can move in that direction.”

And while the Secretary noted the potential privacy concerns around the proposed tax shift, there are other challenges that could come into play. The gas tax isn’t an effective way to make money from EV owners, and has also helped push many to make the shift from gas-powered to electric. But while this means there needs to be another way to raise funds for infrastructure, it has to be done tactfully. 

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If this proposed measure was shot through without an extra thought, it would certainly help raise more money, but could potentially both give gas-guzzlers a major tax break, and could slow EV adoption. While we should all be contributing our part to maintain our nation’s roads, the benefit of the gas tax was that it’s been pushing more to drive electric, which is ultimately better for our planet. A more equitable approach for our pockets may not actually be the best for the climate. 

Of course, a federal mileage tax is still only an idea, and will likely undergo many changes and proposals to iron out both the logistical and privacy concerns surrounding it. Still, it’s interesting to think about the effect such a tax could have on drivers across the country. 

What do you think about the proposed mileage tax? Do you think it’s a good idea? Let us know your thoughts in the comments!