by Tracy C. Miller
Mercatus Center
March 05, 2014
Working Paper Series
The current system of funding highways is being rendered obsolete, as increased fuel efficiency decreases revenue from gas taxes and the system’s top-down structure discourages innovation and market-based solutions for congestion problems. A new study published by the Mercatus Center at George Mason University finds that replacing fuel taxes with a comprehensive system of vehicle mile charges—particularly if the change is accompanied by a greater role for private firms in owning or managing roads—would achieve a more efficient and equitable arrangement for funding surface transportation infrastructure and could eliminate most congestion without requiring a massive expansion of the highway network. The study outlines the advantages of such a system compared to the status quo, and presents options for avoiding potential problems, such as privacy issues, in its design and implementation.

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