The “Withholding” Tax You Pay by the Mile

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One of the biggest economic incentives to drive a hybrid (or a full-boogie electric car) is to not have to buy gas and – by dint of that – not have to pay the extortionate taxes applied to the purchase of gas. These total around 50 cents in taxes applied to every gallon of gas. Proportionately, gas taxes are just about the most regressive taxes after those applied to cigarettes, with the difference being no one has to smoke while almost everyone has to drive.

And even if you don’t drive, you still pay – because the cost others (truckers) pay for their gas (and diesel) plus taxes is folded into the cost of the things you buy, such as the food that is trucked from A to B.

But government doesn’t like it when people evade paying, as by driving a car that uses very little or even no gas at all. Notwithstanding the government’s pushing of such cars.

The solution? Make those who bought them pay by the miles they drive rather than by the gallons they no longer buy.

Virginia is the latest state to initiate such a program – purely voluntary, of course . . . for the moment. The Mileage Choice Program, as it is styled, offers participants the option to “save money” – the carrot – by not having to pay the annual highway user fee (which is of course a tax)  that owners of hybrids and electric cars are otherwise required to pay to make up for the gas taxes they thought they would be able to avoid paying and thereby actually save money. Leaving aside the money they spent on the hybrid or EV to “save” it.

The electronic monitoring device makes paying so  . . . easy.

The vehicle’s owner agrees to automatic debiting – which works a lot like “withholding” in terms of the psychology of the thing. You are less apt to miss the money you never actually held in your hand – or which you didn’t actually have to hand over. It’s simply deducted as you drive, like a slow air leak you don’t pay much attention to, until the tire goes flat.

“By choosing to participate in the Mileage Choice Program, customers may pay less, but will also spread out their highway use fee instead of paying one lump sum annually,” acting DMV Commissioner Linda Ford said in a news release announcing the launch.

Italics added.

“Customers” – a term formerly applicable to free market transactions, co-opted by government to parody the free market – “may pay less.” Indeed, they “may.” Just like you “may” lose 20 pounds in a week without changing anything about the way you eat . . .

In fact, they will pay. More, inevitably. Because pay-by-mile taxes, like all taxes, go up rather than down and in this case, are certain to go up even more than gas taxes, which are held back by dint of being more noticeable. Every time a person buys gas – which for most people is at least once a week – they are confronted with how much they are having to pay for gas, plus tax. Taxes are already so high on gas (and diesel) that even small upticks are usually met with vociferous opposition. This is why gas taxes haven’t gone up that much over the past 20 years even though the cost of gas has more than doubled over just the past two years.

There is probably a hard-deck limit on how high they can go, in terms of the political consequences of raising them appreciably. But the mileage tax is subtler. It is easier to increase without triggering an uproar, very much in the same way that streaming TV services add a buck or three to your monthly subscription and most people don’t even notice it.

Naturally, the state is “partnering” with a for-profit private company – Emovis – to extract the funds, very much in the way the insurance mafia and Big Pharma cartels  use government to extract them, for their very private profit.

It will be a rude awakening for hybrid and EV drivers – who thought they would be “saving money” by buying cars that use less or even no gas. Especially when the mileage tax is upped to provide the revenue to finance the “investment” in “infrastructure” necessary to keep those hybrids and EVs rolling, viz – the additional generating capacity that will be needed to offset the additional use of that capacity by hybrids (the plug-in ones) and EVs.

Unless, of course, the object is to keep them from rolling. And not just electric and hybrid cars, either.

The mileage-monitoring bugs they intend to require, eventually, will be required generally – in all cars, including those that aren’t hybrids or electrics. It will be said that it’s “unfair” to tax some by the mile and others only at the pump. And these bugs they want to install in all cars, eventually, can and will be used eventually to tax them in another way.

If you drive too much – exceed your allotted “carbon footprint” – the bug that is used to monitor how far you drive can also be used to trigger the end of your allotted drive. Remember the “kill switch” that the Biden Thing has “mandated” as standard equipment in all new cars beginning with the 2026 model year? When the government decides that more than “x” miles per week – or day – is “excessive” or “contributing to climate change” – it will be an easy thing to use that kill switch, triggered by the bug in your car letting the DMV know their “customer” has driven too far this week.

This electronic leashing will also probably be used to permanently leash older cars that lack the necessary electronica and so aren’t “compatible” with mileage monitors and cannot be “killed” remotely, via an electronic signal. A law will likely be passed decreeing that every vehicle must be equipped with the bug as well as the kill switch in order to be legal for us on “public” (that means government) roads.

If it sounds crazy, remember the craziness of the times. Who could have imagined that the government would order the closure of practically every small business, in the name of “stopping the spread” – while leaving every big business free to remain open?

Understand the common denominator, which isn’t that you are “customer.” Except in the sense that you are to pay whatever they say – and do whatever you’re told.

. . .

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21 COMMENTS

  1. It doesn’t help that many states, gas is double taxed. You have gas taxes, then on top of that you have the regular sales tax (that tax people pay on items without “special” taxes). Illinois adds the sales tax AFTER the gas taxes have been applied so your paying taxes on the other taxes……..

  2. My “Driver’s License” expired over two years ago.
    I just replaced the head gasket and lapped the valves in my 50 old car.
    F-em. Bring me my red shirt and my brown pants.

  3. Eric, I love your writing but I am finding your articles a bit repetitive. Now here’s where you would think I am complaining, but that is not the case… Keep writing the symphonies you hear in your head. “Today’s” article about the mask or EVs not living up to the hype are needed. You may not “sing” to a reader with one article, but you may with another. I don’t want to stop you from keeping on with what you are doing.

    However; as a regular reader, I am getting bored. I think you need an article asking your regulars what they think would be good things to write about.

    I’m not going to say anything without offering a solution to my “gripe”. My take away from Eric’s articles is “usually” about how boring and not-fun new vehicles are. Occasionally, some good ones come along and Eric writes well about them. But at the end of the day, it usually comes with a nostalgic throwback to the “good times” that the rare new vehicle dares to sport today.

    I’d recommend looking to the good side for a little bit. What do I want to hear about? What’s fun? Jeeps, off-road trucks, rear-engine vettes, etc.

    I drive all the time. I used to have an employer installed GPS that screamed at me if I didn’t drive like an old man from Florida. I now have a new employer, a new vehicle, still with GPS, but no requirement to drive like an old man. I have so much more morale and happiness working for a company whose only demand is “don’t go over 80”. I know this may not sound like much to those that don’t have the GPS Granny Nanny but you have no idea what it is like to be micro managed as a driver.

    I’m tempted to write a “Eric style” auto review of the Dodge Promaster City. What it is: A big bore 4 cylinder with an actual automatic transmission that sits on proper sized tires/wheels. Compared to a Nissan NV 200, it’s the Dodge Charger of the working man’s world.

    The Not So Good: The radio always wants you to accecpt terms and conditions. The radio will not remember your last settings and default to AM/FM. Your air conditioner will not remember it was turned on if you turn off the van with the AC off.

    My employer isn’t going to buy EVs, nor am I. I know they are a raw deal but I yawn when I read it 3x a week.

    Always remember, the audience is listening.

  4. Does the Virginia program require a dongle in the OBDII port?

    Didn’t “Flo” discontinue her discount program using an OBDII dongle because of the problems caused by a full time connection to a diagnostic port meant to be used only for a few minutes?

    • I use a Bluetooth adapter on my OBDII port that pipes diagnostic and real time data to my tablet. Items such as oil pressure, batt stats, ect. All the measurements that should be onthe dash but car manufacturers leave off.

  5. ‘If it sounds crazy, remember the craziness of the times.’ — eric

    That’s how I feel after reading a delusional interview with Mary Barra:

    ‘General Motors CEO Mary Barra isn’t backing off of an audacious prediction: By the middle of this decade, her company will sell more electric vehicles in the U.S. than Tesla, the global sales leader.

    “To really get to 30, 40, 50% EVs being sold, you have to appeal to people that are in that $30,000 to $35,000 price range,” Barra said.

    ‘GM exited Europe in 2017 by selling its Opel brand after years of losses, but Barra said plans are being formed to re-enter the huge market with electric vehicles.

    ‘Most electric vehicles are sold on the US coasts, where people tend to have more liberal views. But most of GM’s income comes from pickup and SUV sales in the country’s more conservative midsection.’

    https://apnews.com/article/general-motors-ceo-mary-barra-3f1a6d9b9f99ce06a8b89d8843b68be3

    Poor Mary has chugged the whole pitcher of EV Kool-Aid, but doesn’t see the iceberg lurking in the final paragraph quoted above.

    Tesla is her model of a business to emulate? And she wants to re-enter Europe to sell EVs, despite having no particular edge against European incumbents?

    This is how you go about bankrupting an old-school industrial company for the second time — by betting on pie-in-the-sky schemes that radically diverge from your core business of making IC-engined vehicles.

    • Sure, but then again, well before we put “wimmin-n-minorities” in charge of big car companies, GM had long since become a company that provided health insurance and family leave and sold cars fewer and fewer people wanted to buy to finance it.

    • Jim,
      If it wasn’t for the fact that GremlinMotors will be bailed out of their incompetence yet again I’d be cheering for their commitment to a 100% EV fleet by 2030whatever. That sh*tcan of a company hasn’t made anything of value since…Saturn? Anything GM newer than the 90’s is made of mildly compressed rust or will outright try to bankrupt or kill you (see: any cadillac, keyring cobalt, burning bolt) with very few exceptions. They should have died in 2008 if it weren’t for that meddling Uncle Scam.

      • ‘That sh*tcan of a company hasn’t made anything of value since…Saturn?’ — SaltbeltHillbilly

        Exactly my interior reaction to Mary Barra. My first car was a General Motors GTO; my family had a series of GM station wagons. Our brand loyalty was there, in spades.

        Now GM makes nothing I would want to drive, even if it were free. How does a company lose the vision, trash the customer connection, and mess up on this scale?

        Surely it started by building appliances instead of cars, offering all the excitement of a new transistorized dishwasher with a flat-screen display. So what; who cares?

        But GM’s full-boogie electric future is the final betrayal. To put it in Madison Avenue speak, We deliver dystopia.

        • Hi Jim,

          Second that. I grew up in a “GM” family. I have owned numerous GM vehicles – and still do (my much-revered Trans-Am). But today? An automatic-only Corvette? A Camaro that looks like a bloated parody of a ’69 Camaro? What else? Nothing else. There isn’t a single vehicle GM sells I would keep if one were given to me. I’d sell it immediately – and buy a Challenger 392!

      • When GM dumped Saturn I cash bought a heavily discounted $11,400 base Astra (Opel). Manual five speed that really needed an overdrive as the automatic had a taller gear and no buzzing at 75. The suspension on that thing was superb comfort and not bad handling. Ride over railroad track crossing was hardly noticeable. Nothing chintzy on the base model. I should have bought another at 11k flat with no fees but my daughter couldn’t live without A/C and a stick. They only sold about 20k of those Astras but there was some commonality of parts. There are several millions of those from Australia to Europe so parts would not be any problem.

  6. Now that the saaaaafety inspections here are computerized and uploaded to Big Brother your odometer gets recorded every year. Simple step for them to calculate your mileage and send a bill. If that’s how it gets done might be able to find a way to hack your odometer.

    • MIB,
      You might be able to disconnect your Vehicle Speed Sensor and ABS wheel speed sensors to keep the odometer from spinning. This is more likely to work on manual trans cars than automagics. Of course you’ll get money lights lit up on the dash, your all-wheel drive, abs and traction control will turn off and you’ll have to reconnect everything for inspection. That said it would be hilarious to get billed for a couple hundred miles of road use tax and give ’em a triumphant “up yours”.

  7. Virginia and some other states tack a surcharge to annual registration fees for EVs and hybrids because these cars pay less or nothing in fuel taxes. The EV surcharge is over $100/year in Virginia. Owners choose between the surcharge and the new mileage-based scheme. Owners of very economical non-hybrid cars have a small surcharge as well, by the way. That new Mitsubishi Mirage you bought to sip gas will have one.

    Frankly, if it’s me and I’m driving a hybrid, I’ll pay the surcharge any day, rather than allow the government to track me. I leave my cell phone home most of the time when I drive my pickup (which is more than 10 years old) for the same reason.

  8. Boy, that “Red Barchetta” song from Rush is becoming more prophetic with each passing day! Mileage taxes will be real bit on long range commuters such as me! (50+ miles into work) arghh. Hopefully, motorcycles and antiques will be able to avoid this dragnet.

  9. LEO will have the app to stop you anytime they choose.

    Got stopped by a sheriff’s deputy for no good reason. They were at a stop sign almost crowding a T intersection, had to swing wide to turn. The headlights were super bright, have a blinding effect.

    Asked if I was okay, I said it is a tricky corner and you were right there, I had to turn like I did. I was free to go after the driving record check.

    I did notice the intimidation tactics, they want you to get agitated. You can’t really trust them.

  10. I don’t believe the roads should be government owned, but while they are, they need to be paid for somehow. Historically, this has been gas taxes, but EV’s break this model twofold. First, they don’t burn gas, second, they’re much heavier and damage roads more. Road wear goes up as the square of weight, meaning something twice as heavy wears the road four times as much. This is why big rigs cause the majority of highway wear, for example.

    So, how do you “fairly” pay to use government roads? Gas tax no longer works. Mileage tracking is rife with privacy issues. Maybe something based on (vehicle weight * odometer)?

    • Opposite:

      Great point about the weight being the major contributing factor for road wear. In Michigan where I live, the registration fee was previously based on curb weight. That changed in the late eighties to being based on new car transaction price.

      So now the road wear and registration fee that is supposed to fund it are totally disconnected.

      And now we have heavier EV cars (compared to ICE cars of same size) wearing out roads and tires much faster.

      And Michigan has the worst roads in the country. That’s the price we pay for being on the largest salt mine on the planet.

    • @opposite lock

      If roads are gov owned, then its a simple deal: all municipal citizens pay for road costs by dividing up the cost equally among all vehicles owned within the municipality, with different rates for commercial and private.

      All highways ought to be toll roads.

      No gas taxes or any other form of funding needed.

  11. And what becomes of the gasoline tax when all cars get (up to) 50 MPG? My Cherokee gets 24 MPG on a good day, about 300 miles on 13 gallons of fuel per fill. When that becomes 600 miles on the same tank-full, the road tax revenue will be half what it is today. To maintain roads that will require much higher labor expense due to those evil corporations raising bids for work because they cannot get workers at the same wage they were paid back in 2019 for some unknown (to the government) reason.

  12. Drive the average person to the brink of bankruptcy, and increase the cost of driving. Sounds almost like a plan. Including abundant thievery along the way. Instead of outright banning you from driving, they make it too expensive to drive. I suspect EV and Hybrid drivers are headed for a lot of rude awakenings. Especially the EV drivers. So are those with “connected” cars or trucks sitting in their driveway/garage.

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