Taxing vehicles based on miles driven, not fuel purchased, would better align highway costs with revenue generation, according to the Congressional Budget Office (CBO).

CBO officials on Tuesday said the imposition of a new tax on cars and trucks based on how many miles they drive would be one way of generating revenues for the federal Highway Trust Fund, The Hill reported.

Joseph Kile, CBO’s assistant director for microeconomic studies, told the Senate Finance Committee that a tax on vehicle miles traveled (VMT) would help the Highway Trust Fund meet its spending goals, in particular because the fund is already spending more than it collects through the federal gas tax.

But he also said the tax would better align highway costs with revenue generation, and promote the more efficient use of the highway system.

“Although taxes currently are charged for fuel, most of the costs of using a highway, especially the cost of pavement damage and congestion, are tied more closely to the number of miles traveled than to the amount of fuel consumed,” Kile told senators.

Revenue proposals for the Highway Trust Fund are being considered because the law authorizing federal highway spending expires at the end of September, and the Department of Transportation has proposed higher spending levels. CBO first proposed a VMT tax as an option in a late March report it sent to Sen. Kent Conrad (D-N.D.).
Earlier this month, it was revealed that the Department of Transportation had written a detailed legislative proposal calling for the creation of an office that would begin field testing of VMT taxes within four years. The White House downplayed that proposal by saying it had not been circulated within the administration and it “does not represent the views of the president.”