Forty years ago this week—July 29, to be precise—Clark Griswold loaded his wife Ellen and children Rusty and Audrey into their brand-new Wagon Queen Family Truckster and set out on the great American road trip. National Lampoon’s Vacation saw the Griswolds touring the highways and byways from Chicago to Walley World, with hijinks, shenanigans, and an occasional felony along the way. The trip wasn’t a success for everyone—just ask Aunt Edna and her dog Dinky. (Wait, you can’t—they’re dead.) But Vacation is firmly established as one of those quotable 80s touchstones that anyone of a certain age can recall.
The interstate highway system that literally paved the way for the Griswolds’ trip is a marvel of twentieth-century design and engineering. Unfortunately, the 46,876-mile system is showing its age, as drivers on I-95 discovered when an overpass collapsed in Philadelphia last month. It takes money to keep up that much road. Uncle Sam spends about $50 billion per year to maintain the system, and state and local governments chip in another $150 billion more. Most drivers in most places will happily tell you that’s not enough. Some of them will use the same one-finger gesture they use when antisocial drivers cut them off on those crumbling roads.
Since 1993, the federal gas tax has been stuck at 18.4 cents/gallon for gasoline and 22.4 cents/gallon for diesel fuel. About 70% of that revenue goes to the Highway Trust Fund, with the remainder dedicated to mass transit. For better or worse, it’s not indexed for inflation, which has increased by 111% since then. The tax also fails to account for electric vehicles, which make up a growing percentage of cars on the road and miles traveled. And few politicians want to raise the gas tax, especially in an environment where millions of Americans judge the health of the entire economy solely by the price they pay at the pump.
There may be an answer buried deep inside 2021’s Infrastructure Investment and Jobs Act. That law authorizes the Department of Transportation to test a “variable miles traveled” fee, or VMT. Switching from a straight gas tax to a VMT fee would let the DOT charge electric vehicles just like gas and diesel vehicles. DOT could charge higher rates for travel in congested cities or peak rush hours. They could charge higher rates for bigger vehicles that spew more pollutants into the atmosphere. They could charge 18-wheelers and other heavy trucks more to reflect the punishment they inflict on roads.
Collecting a VMT fee would be no harder than collecting at the pump. We’d just slap the same sort of mobile device on every vehicle’s windshield that many states use to collect EZ-pass tolls. Of course, a VMT wouldn’t come without costs. It would present privacy challenges that go far beyond current toll collections. And perversely, including electric vehicles in the system could actually discourage transitioning away from fossil fuel.
Right now, the main obstacle to charging a VMT fee is inertia. Legislators love standing in front of cameras at new roads and bridges to take credit for bringing home the bacon. Several lawmakers who actually voted against the infrastructure bill have tweeted how great it is to see their home states getting their share of the loot. Asking our current Congress to approve a whole new model of tax to maintain the roads we already have is a tall order.
Clark Griswold was a saint with children and a genius with food additives. But he didn’t know the first thing about taxes. We could have helped him there, for sure. And we can help you, too. So enjoy your family’s summer vacation. Then call us when you get home so we can help you save for next year!