Commentary
California has the highest income tax rate in the country (top tier of 14.4 percent), the highest statewide sales tax rate (7.25 percent, plus local sales taxes), and the highest gas tax rate ($0.78 per gallon). Yet it ranks third to last in the country in terms of road quality.
The old joke is that California would tax the air we breathe if it could. Well, California’s latest tax proposal comes close. The state is recruiting drivers for a pilot program to track and tax the miles they drive.
The plan is borne from the fact that Californians have switched to electric and hybrid vehicles at a faster rate than other states, spurred on by large state, as well as federal, subsidies. As a result, gas consumption has declined, in turn reducing the state’s gas tax receipts. One might think this could be rectified by simply shifting money from the general fund to make up for it. However, the state faces up to a $55 billion deficit this year, causing it to consider a host of additional taxes, including a wealth tax.
California has long relied on the gas tax to take care of its roads. It was a good idea at first. The gas tax was initially used in lieu of toll roads, which made a lot of sense. Pricing the cost of road maintenance into the price of gas was a good way of taxing people based on usage. Toll roads do the same, but they are cumbersome, requiring toll booths, workers, cash, and long lines. However, California ultimately succumbed to the need for more money and added some toll roads in addition to the gas tax.
But because of the state’s green initiative, it has convinced Californians to switch to hybrid or electric vehicles from gas. While electric vehicles are more expensive, Californians were enticed to buy them because of the subsidies and savings they would enjoy by no longer having to buy gas. But like most government programs, this was not well thought out. California has lost millions in tax revenue because of this scheme and now needs to make up for that. From the many options available to it, it has chosen a plan to begin tracking drivers with GPS monitors.
Buyers of electric cars may not have been aware of the new tax-by-the-mile plan before they decided to purchase their vehicles. Had they known about the potential added cost, they may have made a different decision. But regardless, California law mandates that all new car sales be electric by 2035.
Under the new plan, according to Caltrans, mileage could be tracked by plugging an electronic device into a vehicle or using the vehicle’s tracking system. There was a time when many Californians were civil libertarians and would have vehemently opposed such a government intrusion into their personal lives. But many today put their undying trust in the government, believing it to be infallible and capable of curing all societal ills.
We saw during the pandemic how most Californians had no problem trusting the government to interfere in virtually all elements of private life, mandating when we could leave our homes, who we could invite into our homes, and that we inject an unproven vaccine. Allowing the government to track our every move is right in line with such mandates.
There’s no telling what the government may use this new information for. The main page of the Caltrans website for the program, entitled “California Road Charge,” presents the tagline “Funding transportation in an equitable way.” There’s that word again. Government-imposed “equity” can take any number of forms. On the next page, it states that the charge is “Fair. Transparent. Sustainable.”
We already know California is trying to increase the cost of fossil fuels to drive people to electric cars and green energy such as wind and solar. The state has even sued the oil companies for causing climate change, in order to make it “more expensive to be dirty than clean,” according to state Attorney General Rob Bonta. By charging an exorbitant fee per mile, it could effectively reduce the number of cars on the road to reduce climate change. It could also easily charge varying fees based on driver income to impose “equity.”
It could also charge varying fees based on miles driven, penalizing those who the government determines drive too much. It could also add a tax for homeless housing, as Los Angeles recently did on all retail sales.
One thing we know is the tax is unlikely to actually improve the roads. California has ranked toward the bottom of all states in road quality for a long time, pre-dating the impact of electric cars. In 2016, Reason Foundation’s Annual Highway Report listed California as 43rd among states in road quality. It has since gotten worse, dropping in 2019 to 45th and in 2020 to 47th. Perhaps these drops are starting to reflect the effects of the reduced gas tax revenue, but 43rd wasn’t a good starting point, especially for a state with great weather that doesn’t have to deal with the effects of snow, ice, and salt.
The truth is that California has greater priorities than roads. Road upkeep is a basic, old-school obligation of government. It’s not sexy. State politicians are more focused on changing the earth’s temperature, rectifying the scourge of slavery, and building housing for all. In California, basic needs such as roads, schools, and safety take a back seat.
