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Road User Fees Instead of Fuel Taxes: The Quest for Political Acceptability

Authors


  • Denvil Duncan is assistant professor in the School of Public and Environmental Affairs at Indiana University. His current research interests include personal income taxes and their effect on individual behavior, particularly labor supply and tax evasion. Some of his work in this area explores the impact of tax-induced behavioral responses on income inequality. He is also interested in international tax mimicry and the effect of tax policy on economic growth. E-mail: duncande@indiana.edu

  • John Graham is dean of the School of Public and Environmental Affairs at Indiana University. He founded and led the Harvard Center for Risk Analysis, served as administrator of the Offi ce of Information and Regulatory Affairs from 2001 to 2006, chaired an interagency task force on automotive industry regulation, and was dean of the Frederick Pardee RAND Graduate School at the RAND Corporation in Santa Monica, California. He has authored several books and articles on health, safety, and environmental issues. E-mail: grahamjd@indiana.edu

Abstract

In light of recent regulatory changes in federal fuel economy standards for cars and trucks, the consensus forecast is that motor fuel taxes will not be an adequate source of dedicated funding for roadway maintenance and construction. This article accepts the notion that mileage fees are a promising replacement for the fuel tax and considers steps that might be taken to enhance the political acceptability of such a reform. The authors argue that simple, low-tech ways of implementing mileage fees are possible in the near term and should be complemented by a well-developed audit mechanism. Current trends in the automotive and auto insurance industries as well as social media are likely to reduce opposition to more technologically advanced mileage taxes in the long run.

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