Just What Isn't Needed

Why do some people think that a mileage tax is a good idea? The whole idea of taxes are to collect revenue, and nanny-politicians think that making certain taxing decisions affect people's spending and savings habits.

Think mortgage interest deduction.
Student loan interest deduction.
Earned income tax credit.
Cigarette and tobacco products taxes.
Taxes on alcohol.

Gas taxes are used to support transportation projects. People are increasingly realizing that SUVs and other low mileage vehicles are more expensive because it costs more each time they go to the pump to fill up. So, there are people switching to higher efficiency cars and hybrids, like the Toyota Prius. Oh, and those cars' owners are sometimes eligible for tax credits for using ULEV/SULEV vehicles.

Well, if you use less gas, then the state collects less in tax, even though the cars are doing more in miles. More miles on the highways means more potholes to fix, but the revenues being generated by the gas tax aren't sufficient (at least according to the groups that want to institute a mileage tax).

A mileage tax simply looks at the amount of miles that the vehicle actually goes, and assesses the tax accordingly.

Great.

If New Jersey wants to fall further behind neighboring states in economic competitiveness, I can't think of a better way to do it. Gasoline is the economy's blood and lifeline. Institute yet another tax, on the mileage of vehicles operating in the state, and you'll see people going elsewhere to do business.

Besides, you'll actually be penalizing people who think that they are helping the environment by going with the hybrid vehicles, which use less gas and do not pollute as much as conventional gas-powered vehicles.

UPDATE:
In the race to be the worst politician on record, Fernando Ferrer, a NYC mayoral candidate, proposes to raise NYC property taxes by $1 billion over 10 years to fund affordable houses. His plan might actually work; if you raises the taxes enough, people will move out and property values will fall because the costs to live in the City will become unbearable. It might even reach a point where the housing market might collapse, enhancing his ability to build 'affordable' housing. Seriously though, the only reason that there isn't enough affordable housing in New York City is that there isn't enough housing of all types being built. There is too much demand and insufficient supply. The only fix is to let the developers build more housing to meet the supply.

Of course, current owners don't mind, because they'll sell and reap the bonus of the inflated prices. And real property transfer taxes keep coming in - so why the rush to raise taxes on an already overtaxed environment?