There are five basic legal forms of business structures found in the United States: C corporations, S corporations, sole proprietorships, partnerships, and Limited Liability Companies (LLCs). In order to understand...
- The Tax Policy Blog
- Taxing Wheels to Pay for Roads
Taxing Wheels to Pay for Roads
The council of Madison County, Indiana voted 4-3 last evening to enact a $25 wheel tax for cars, sedans, and small trucks and $40 dollars for large trucks, buses and recreational vehicles. The Council estimates the wheel tax will raise approximately $3 million for road repairs in the county.
This could be considered a user fee, given the high cost of maintaining roads for the county and the wear and tear caused to them from daily driving. However, is a registration fee for the number of wheels your car has really the best proxy measure for road usage? Someone who drives a lot will pay just as much as someone who hardly drives at all. In defiance to the vote by the council, Madison County resident Mahlon Gillard said, "Come Election Day, they're gonna be out of work."
I wonder why the user charge is limited to cars. Segways and bicycles have wheels that cause wear and tear on roads and sidewalks that must be maintained by public funds. Will Madison County next try to get parents to pay for the wheels on their children's wagons and roller skate shoes?
Nearby Allen County, Indiana is considering a similar wheel-based charge, and in several counties in Tennessee, wheel taxes can be upwards of $50 (on top of regular car registration fees). For example, residents of Robertson County, Tennessee pay $110.25 in wheel-based charges each year. While requiring citizens to pay for usage of road and the cost associated with maintenance of these roads is apt, wheel-based exactions are an imprecise proxy for road usage. States and counties might instead look to tolls.
Subscribe to the Tax Foundation Newsletter
Join the Tax Foundation's fight for sound tax policy Go
About the Tax Policy Blog
The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.