House chairman calls for mileage-based tax to replace gas tax

Mileage-based taxes have been a touchy subject over the past few years, but one House committee chairman says such a system should be enacted in the United States as soon as possible. House Representative James Oberstar of Minnesota says the U.S. should forgo pilot programs and move forward with a mileage-based tax system.

Oberstar, the House Transportation and Infrastructure Committee chairman, says that such a tax system is not only needed but is ready to be put into place. "Why do we need a pilot program? Why don't we just phase it in?" Oberstar told The Detroit News.

Under Oberstar's plan - which is currently being drafted - every car in America would be fitted with a GPS device. The GPS unit would keep track of vehicle mileage, what types of roads were being used (secondary or highway) and would calculate taxes owed.

Although many lawmakers say such a system is at least 10-years away from viability, Oberstar says it could be enacted in as little as two years. "I think it can be done in far less than that, maybe two years," he said.

Although controversial, a mileage-based tax system would be beneficial for the funding of federal highway systems. Highway projects are currently funded through gas tax revenues, but those dollars are quickly drying up. Thanks to a slumping economy and more fuel efficient vehicles, Americans are buying less gas, resulting in a dramatic drop-off in federal funds. As such, a mileage-based system is probably the tax of the future, with only the questions of how and when standing in the way.