Overtaxed and Underbuilt

By John A. Charles, Jr.

An Oregon Legislative committee is proposing a massive series of tax increases to pay for various transportation projects.

The proposal calls for higher taxes on vehicle registration, increased gas taxes, a new sales tax on motor vehicle purchases, a statewide employee tax to subsidize transit, and a new bicycle sales tax.

While there are many bad ideas on this list, perhaps the most offensive is the sales tax on vehicle purchases. It is being crafted so that most of the money would be diverted from highway maintenance into something called the “congestion relief and carbon reduction fund.”

Anything that includes “carbon reduction” in the title is guaranteed to be a boondoggle.

Before this proposal goes any further, legislators should consider a bill simply focusing on improving the road system. We all benefit from better roads.

In addition, they should try to charge people based on actual road use, not the mere ownership of vehicles. The gas tax is a good surrogate for this, so it would make sense to increase the gas tax rate while lowering vehicle registration fees. This would be fair to motorists, while still raising the funds needed for road improvements.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.


  • john fairplay

    Yes, BUT, while adoption is anemic, vehicles that do not use gasoline or diesel fuel are becoming a larger part of vehicles owned. To truly level the playing field, the State should remove any tax incentives it provides on hybrid and electric vehicles, and it should have a separate fee on ownership of these vehicles to capture the amount these vehicles would pay in fuel tax. Under current law, owners of these vehicles pay nothing for the maintenance of the roads they use.

  • Bob Clark

    I am actually not against increasing gasoline taxes if the new monies are fully used to improve actual road carrying capacity, such as relieving some key bottlenecks and adding to like Highway 217 (a big If with progressive local and state government here). Electric vehicles maybe should pay based on odometer readings a mileage tax. Hopefully, over time, the highway system will become automated where big data can optimize car speed, routes, and such (this has the potential to really add effective capacity without adding actual road lane mileage).
    There is also the bike tax. I just don’t see this being very effective in raising revenue. Avoiding the tax seems to easy. It is possible for instance to build your own bicycle. Then to, folks go to garage sales and such, requiring ad-hoc secondary markets to be regulated (not likely). And if the tax isn’t substantial, it probably is going to cost as much to administer the tax as the tax raises in revenue.

  • tanpamoney

    in my country, tax always increase include diesel but own car still increase too