Big Brother Black Box for Your Car?

A recent story in the LA Times explains that government officials at various levels are keen on putting little black boxes in everyone’s vehicle. Civil liberties groups are concerned—and rightly so—about Big Brother being able to track everyone’s movements. Yet even the official reason is ominous: It will allow the government to tally a citizen’s mileage and then send him or her a tax bill.

Here are the chilling details:

WASHINGTON — As America’s road planners struggle to find the cash to mend a crumbling highway system, many are beginning to see a solution in a little black box that fits neatly by the dashboard of your car.

The devices, which track every mile a motorist drives and transmit that information to bureaucrats, are at the center of a controversial attempt in Washington and state planning offices to overhaul the outdated system for funding America’s major roads.

…

And while Congress can’t agree on whether to proceed, several states are not waiting. They are exploring how, over the next decade, they can move to a system in which drivers pay per mile of road they roll over. Thousands of motorists have already taken the black boxes, some of which have GPS monitoring, for a test drive.

…

The push comes as the country’s Highway Trust Fund, financed with taxes Americans pay at the gas pump, is broke. Americans don’t buy as much gas as they used to. Cars get many more miles to the gallon…

“The gas tax is just not sustainable,” said Lee Munnich, a transportation policy expert at the University of Minnesota. His state recently put tracking devices on 500 cars to test out a pay-by-mile system. “This works out as the most logical alternative over the long term,” he said.

It is no surprise that political liberals support the plan, since it allows government to raise revenue (always a plus for those in favor of Big Government) and it is yet another mechanism to punish the use of fossil fuels.

However, what may surprise some readers is to learn that some libertarians are applauding the innovation as well. Their reasoning is that it’s more efficient to charge for road use in terms of actual miles driven, rather than (say) how many gallons of gasoline are sold at the pump.

It is amazing how often free-market economists analyze government policy from the perspective of the best possible outcome. Yes, in theory a textbook tax system based on miles driven, rather than gallons of gasoline purchased, arguably would be a more sensible way to finance road construction and maintenance.

Yet the government in the real world doesn’t operate according to the textbook plans of economists. Giving the government yet another source of tax revenue will simply mean that…the government gets more tax revenue. The mileage tax will be based on political expediency, rather than a desire to set the “optimal” fee for road usage.

When government manages a resource like a road, they have less incentive to manage it efficiently. Because it derives its revenue from involuntary taxes, the government has little incentive to keep its customers happy. And because it is a monopoly supplier, there is little innovation.

On top of the economic waste, there is the added danger of giving government officials the ability to track every motorist’s movements. One doesn’t have to work for the ACLU to see why that is a bad idea.

IER Senior Economist Robert P. Murphy authored this post.