Road Usage Charge Versus Carbon Tax

Talking Tax on Think Tech Hawaii, September 24, 2022

Potholes Ahead for Drivers. The hosts for this show are Jay Fidell and Tom Yamachika.

Hawaii Department of Transportation has been studying implementation of a Road Usage Charge (RUC). Such a charge would be assessed to a driver based on how many miles they’ve driven on our highways and byways, and it’s (at least in theory) designed to replace the fuel tax that is now the primary contributor to the state’s Highway Fund.

But there is a contingent of people who are pushing a carbon tax. A carbon tax collects money to pay for the societal costs of pollution, global warming, and other environmental damage wrought by fossil fuel burning. Given that many of the environmental damages have already occurred, the goal of the tax is to fix the past damage and not simply compensate for current social costs. Furthermore, it is there to dis-incentivize (i.e., penalize) fossil fuel use. Rather than getting rid of the existing tax on gasoline, they want to jack it up big time.