Out of Control Policy Blog

Dutch Move Forward on VMT Fee

As our roads crumble, the U.S. continues to put transportation policy on the back burner. Meanwhile, the Dutch government is moving forward with a wholesale remake of approach to financing transportation infrastructure. The Transport Ministry has forwarded a proposal to parliament that would replace vehicle taxes with a fee based on the the distance driven, or a vehicle miles traveled (VMT) fee. They say the move will cut congestion in half and reduce carbon dioxide emissions by 10 percent.

In Holland, the fee would be equivalent to about 7 cents a mile, rising to 16 cents around 2016.

According to Wired magazine:

"The Dutch cabinet approved the legislation Friday; it must be passed by Parliament before becoming law. Finance Minister Wouter Bos calls the proposal financially irresponsible. According to Radio Netherlands / Expatia, he fears that national budget could take a big hit because people might be less inclined to drive.

"Advocates of the tax say nearly six in 10 drivers will benefit because the tax burden will be shifted to people who drive the most and at peak times. The price of a new car also would decrease significantly, because taxes comprise about 25 percent of the sticker price."

Samuel Staley is Research Fellow

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