California’s Latest Tax Idea: Charge Drivers by the Mile

Commentary California has the highest income tax rate in the country (top tier of 14.4 percent). It has the highest statewide sales tax rate (7.25 percent, plus local sales taxes). It has 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. But the state faces up to a $55 billion deficit this year, causing it to consider a host of additional taxes, including a wealth tax....