MauledAgain

At the end of July, in Do IRS Agents Watch Television Court Shows?, I explained that reader Morris had found a story that disclosed how an IRS agent watching Real Housewives of New Jersey noticed some things that led to and IRS audit. Reader Morris was responding to a question I had asked a little more than eight years ago, in People’s Court: So Who Did the Tax Cheating?. I had asked, “Do IRS employees watch television court shows?” In last month’s post, I shared my opinion that “The news that an IRS agent was watching a reality show does not answer the question of whether IRS agents watch television court shows.” I concluded with this request: “Perhaps an IRS agent, or a friend or relative of an IRS agent, is willing to share that they watch television court shows. Perhaps they watch simply to be entertained. Perhaps they watch in order to spot people and situations deserving of audits and investigations. If I get any responses, I’ll share them.”

I did get responses. Two. I suppose the next question will be, “Do IRS agents read my blog?” Well, at least two have. Both of the respondents are retired. One simply said, “If I did, how would I know where these people live unless they post their appearance on their social media pages?” My reaction is that finding someone isn’t as difficult as one might think, and the IRS surely has ways of finding someone that isn’t as difficult as those who are simply using internet sites or social media.

The other “noted that IRS agents do watch television court shows, along with other shows, for entertainment purposes, and if they see something on the show or on social media, news, or some other source and there appears to be a potential tax violation they can refer it for further attention.” So there’s no agency-wide policy of watching television court shows, but there are procedures in place if an agent happens to notice something awry when watching television court shows (and probably other television shows, such as news reports).

So advice to people appearing on television court shows should include the same advice given to people on social media. Think before you write or speak or post. One never knows who is watching, reading, or listening.

It’s time again to look at the mileage-based road fee, a topic that has had my attention for almost 17 years, in posts such as Tax Meets Technology on the Road, Mileage-Based Road Fees, Again, Mileage-Based Road Fees, Yet Again, Change, Tax, Mileage-Based Road Fees, and Secrecy, Pennsylvania State Gasoline Tax Increase: The Last Hurrah?, Making Progress with Mileage-Based Road Fees, Mileage-Based Road Fees Gain More Traction, Looking More Closely at Mileage-Based Road Fees, The Mileage-Based Road Fee Lives On, Is the Mileage-Based Road Fee So Terrible?, Defending the Mileage-Based Road Fee, Liquid Fuels Tax Increases on the Table, Searching For What Already Has Been Found, Tax Style, Highways Are Not Free, Mileage-Based Road Fees: Privatization and Privacy, Is the Mileage-Based Road Fee a Threat to Privacy?, So Who Should Pay for Roads?, Between Theory and Reality is the (Tax) Test, Mileage-Based Road Fee Inching Ahead, Rebutting Arguments Against Mileage-Based Road Fees, On the Mileage-Based Road Fee Highway: Young at (Tax) Heart?, To Test The Mileage-Based Road Fee, There Needs to Be a Test, What Sort of Tax or Fee Will Hawaii Use to Fix Its Highways?, And Now It’s California Facing the Road Funding Tax Issues, If Users Don’t Pay, Who Should?, Taking Responsibility for Funding Highways, Should Tax Increases Reflect Populist Sentiment?, When It Comes to the Mileage-Based Road Fee, Try It, You’ll Like It, Mileage-Based Road Fees: A Positive Trend?, Understanding the Mileage-Based Road Fee, Tax Opposition: A Costly Road to Follow, Progress on the Mileage-Based Road Fee Front?, Mileage-Based Road Fee Enters Illinois Gubernatorial Campaign, Is a User-Fee-Based System Incompatible With Progressive Income Taxation?. Will Private Ownership of Public Necessities Work?, Revenue Problems With A User Fee Solution Crying for Attention, Plans for Mileage-Based Road Fees Continue to Grow, Getting Technical With the Mileage-Based Road Fee, Once Again, Rebutting Arguments Against Mileage-Based Road Fees, Getting to the Mileage-Based Road Fee in Tiny Steps, Proposal for a Tyre Tax to Replace Fuel Taxes Needs to be Deflated, A Much Bigger Forward-Moving Step for the Mileage-Based Road Fee, Another Example of a Problem That the Mileage-Based Road Fee Can Solve, Some Observations on Recent Articles Addressing the Mileage-Based Road Fee, Mileage-Based Road Fee Meets Interstate Travel, If Not a Gasoline Tax, and Not a Mileage-Based Road Fee, Then What?>, Try It, You Might Like It (The Mileage-Based Road Fee, That Is) , The Mileage-Based Road Fee Is Superior to This Proposed “Commercial Activity Surcharge”, The Mileage-Based Road Fee Is Also Superior to This Proposed “Package Tax” or “Package Fee”, Why Delay A Mileage-Based Road Fee Until Existing Fuel Tax Amounts Are Posted at Fuel Pumps?, Using General Funds to Finance Transportation Infrastructure Not a Viable Solution, In Praise of the Mileage-Base Road Fee, What Appears to Be Criticism of the Mileage-Based Road Fee Isn’t, Though It Is a Criticism of How Congress Functions, Ignorance and Propaganda, A New Twist to the Mileage-Based Road Fee, The Mileage-Based Road Fee: Simpler, Fairer, and More Efficient Than the Alternatives, Some Updates on the Mileage-Based Road Fee, How to Pay for Street Reconstruction, Stop the "Stop EV Freeloading Act" Because The Mileage-Based Road Fee Is a Much Better Way to Go, Why Is Road Repair and Maintenance Funding So Difficult for Public Officials to Figure Out?, Should (Will) Implementing the Mileage-Based Road Fee Cause Privatization of Highway Infrastructure?, The Freedom Caucus Doesn’t Understand that the Mileage-Based Road Fee is “PRO-Freedom,” Not the Opposite, A Mileage-Based Road Fee by Any Other Name?, Does the Mileage-Based Road Fee Work for Local Road Maintenance?, Washington State Mileage-Based Road Fee Proposal Changes: Is It Better?, and The Mileage-Based Road Fee Is Much Better Than a Federal Fuel Tax Increase.

Several days ago reader Morris directed my attention to an opinion piece on Freightwaves from 2021 that asked “What would a vehicle mileage tax mean for ride-share?” In examining that question the article repeats concerns that I have addressed in previous commentaries.

With respect to ride sharing, the article suggests that privacy concerns would discourage ride-share drivers from driving as much as they currently do, as the author gleans from surveys taken from ride-share drivers. The basis for this prediction, according to those drivers, is the presumed use of GPS technology used to track vehicle mileage. The concern certainly cannot be the tracking of mileage, because as I have explained more than once in previous commentaries, odometers track mileage and when vehicles are taken in for inspection the inspecting mechanic records the odometer reading. So, too, do many states when the annual vehicle registration application is submitted. Insurance companies also track the miles driven by insured drivers because it affects rate setting. The concern apparently is the ability of GPS information to provide a viewer the location that a vehicle is in or has visited over the period of time during which mileage is being computed. Yet other than when vehicles are in private garages, vehicles are out in the public and can be seen by whomever observes them. The notion of privacy makes little sense when an activity is being done in public. Of course, this presupposes GPS technology rather than odometer readings would be used to compute the mileage-based road fee. The only reason it would need to be used is to deal with states that want to impose the tax on out-of-state vehicles for which they do not receive odometer readings. As a practical matter, GPS technology already exists in modern vehicles, used, for example, for emergency services requests. So why the concern? Perhaps drivers who are charging customers for rides don’t want to leave evidence of the routes they took. Why? If the stories about taxi drivers and ride-share drivers taking customers on circuitous routes to jack up the cost are true, then perhaps those drivers might be wary of letting evidence exist of their route choices. And, of course, busy drivers don’t need to do that because they want to get passengers delivered as quickly as possible so they can pick up their next fare, which brings in more revenue due to higher initial mile charges and flat fees than would investing time racking up phantom miles for a passenger on a trip already underway. Another concern is that GPS data can reveal whether a driver is violating traffic laws such as those imposing speed limits, but frankly, I have no sympathy for those who resist technology because it impedes law breaking. As a practical matter, as increasing numbers of speed cameras and traffic light cameras are installed, focusing on GPS as a threat to traffic law breaking will becoming increasingly misdirected. So either the privacy concerns are misplaced or the result of keen awareness of the impact of technology on questionable driving and fare-charging practices.

The article also shares concerns about accessibility. It points out that older vehicles do not have built-in GPS technology or the OBD-II port that can be, and often is, used to connect the devices used to track mileage. The OBD-II port became standard in 1996, though not in diesel vehicles until 2006). How many 30-year-old non-diesel vehicles are still on the road? How many 20-year-old diesel vehicles are still on the road? There are some, but their numbers are decreasing, and by the time federal and state governments get around to replacing antiquated fuel taxes with a mileage-base road fee, which will be when highways, bridges, and tunnels are disintegrating en masse, the only non-OBD-II-port vehicles still on the road will be classics, which for the most part are driven so little that they probably are worth an exception.

The article, though, claims that the “tech also experiences problems when paired with electric, hybrid and alternative fuel vehicles,” and that “ For drivers of older models or vehicles with alternate fuel sources, that means a VMT tax isn’t feasible — their cars simply won’t fit into the system.” Though I understand the issue with respect to very old vehicles, as addressed in the preceding paragraph, I don’t understand the premise that electric, hybrid, and alternative fuel vehicles are not, or cannot be, fitted with GPS technology. In fact, to the best of my knowledge, these more recent high-tech vehicles rely heavily on GPS and internet connectivity, and have odometers – or their digital equivalents – to keep track of miles driven for a variety of purposes, including recharging or refueling.

The article expressed concerns that a mileage-based road fee “could disproportionately impact low-income drivers.” First, has anyone done computations to demonstrate that the mileage-based road fee would generate a higher cost than the amount paid at the pump for federal and state fuel taxes? Second, just as ride-share drivers factor fuel taxes into the rate they charge customers, so too they can factor in the mileage-based road fee when making that determination. The article also notes that some states are charging mileage-based road fees in addition to, rather than as replacements for, fuel taxes. That is an important observation, and one that causes me to point out that my proposal, along with most others, would REPLACE fuels taxes with the mileage-based road fee and not permit it to be an additional charge.

Next, the article notes that ride-share drivers “are routinely paid less than minimum wage.” That is, of course, something that should not be happening. Yet it isn’t caused by fuel taxes, nor would it be caused by mileage-based road fees. It is caused by the same business practice that causes wage underpayments throughout too many industries. Ride-share companies need to compensate drivers sufficiently to cover the costs encountered by the drivers and for the time they invest in driving.

Finally, the article concludes, “For the ride-share industry to survive a VMT tax, the model requires some major tweaks by policymakers. They’ll have to * * * enact variable pricing that takes into account things like a person’s income or job status.” That makes no sense. No one pulls up to a gasoline pump and selects from an assortment of fuel tax rates based on income or job status. Existing tolls reflect miles driven on the toll road and are not adjusted for the driver’s income level or job status. The solution to the income-expense dilemma faced by ride-share drivers and too many other Americans does not sit within complex “tweaks” to a fuel tax or mileage-based road fee but within the much wider inequality structure that is afflicting American society and culture.