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Congress Debates VMT Tax for Trucks

Trucking and the transportation industry as a whole have been a hotly-debated topic in the halls of Congress. It looks like we have another discussion on our hands: a truck-only VMT tax.

What is the VMT Tax?

VMT stands for “vehicle miles traveled”, so a tax on this would be a payment proportional to the miles traveled. One example of this is car and vehicle insurance, you pay more money for it the more you drive (although the money goes to the insurance companies instead of the government). Another, more direct example is gasoline. Different governments (local, state, federal) have different taxes on the fuel, and people who drive more miles pay more in taxes (although this is not always the case, as a fuel efficient hybrid would pay less for this VMT than a minivan, due to fuel efficiency).

Essentially any costs that are directly caused by more driving are vehicle miles traveled taxes. A new one for truckers would most likely entail tracking the number of miles driven per quarter or year, then sending a check to the proper party based on the miles logged.

A VMT Tax’s Effect on the Trucking Industry

The cost per mile of this VMT tax would either cut directly into a trucking business’ profit margin, or it would be passed on to the company needing their freight hauled, which would reduce the number of loads the country has traveling on the road on any given day. Neither is a good thing for the trucker: lower profit margins mean needing more loads to survive, and fewer loads means less chance of getting work.

Four percent of vehicles on the road are trucks, yet trucks foot almost half of the federal Highway Trust Fund. If a VMT tax for trucks only becomes law, this percentage will rise.

Assume a commercial driver travels 400 miles a day for 350 days in a year:

  • A one cent per mile tax would cost the driver or his company $1,400 per year.
  • Ten cents per mile would cost $14,000 per year.
  • A quarter per mile would cost $35,000 per year.

The effect on the trucking industry is compounded by the possibility that the VMT tax would almost certainly not solve the problem it is intended to fix. America’s roads are in dire need of repair, but current VMT taxes in the form of gasoline and diesel fuel taxes are apparently not enough to fix it, despite the Highway Trust Fund having a current balance of over 20 billion dollars.

Conclusion

America’s road repair is a bipartisan issue. Congress is debating the issue of adding a tax of some amount to help raise money to help fix roads, bridges, and other forms of public infrastructure. Whether or not it passes has yet to be determined, but numerous trucking organizations oppose it, including the Owner-Operator Independent Drivers Association (OOIDA).

“Professional truck drivers cover tens of billions of miles on American highways each year, so our members can speak from experience about the significant need to update and maintain our roads,” OOIDA President Todd Spencer wrote in late January. “The economic success and competitiveness of both small-business truckers and the nation depend on a safe, reliable and well-funded national transportation system. Simply put, our members understand the value of an efficient highway network and support efforts to increase Highway Trust Fund revenues so long as they are done in a fair and equitable way.”

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