Quantitative analysis of impacts of moving toward a vehicle mileage-based user fee

This paper offers a broad examination of the revenue generation and social equity implications of a national mileage-based user fee that could be substituted for all or part of the current gas tax. Data from the 2001 National Household Travel Survey are combined with documented elasticity values that can be used to calculate changes in vehicle fleet composition and miles of travel by time of day in response to price signals. These data provide the basis for calculating the impacts of a mileage-based user fee system. It is found that modest mileage-based fees of just 0.5 cent per mile to 1.3 cents per mile can offer revenue streams that replace current gas tax revenue. In addition, the mileage-based user fee system appears to have minimal, if any, differential impacts across income classes and thus eliminates any potential equity concerns that may arise from the implementation of such a user fee system. Impediments to a mileage-based user fee system appear likely to be technological and personal privacy issues as opposed to transportation or social equity issues.