Here’s my idea for the day: a variable gas tax based on local density and transit availability. This could help the state raise revenue and encourage people to park their cars where possible. But at the same time, it would make sure those who absolutely need to drive aren’t put in an impossible position.

For an example, consider Seattle. Most of the city has medium-to-high density and transit is widely available. Residents can get to work and school using the bus, light rail, or bicycles. Walkable neighborhoods mean that you can stroll to your destination as well. If we can reduce the number of cars on the street while encouraging healthier, more sustainable lifestyles and helping the city build better neighborhoods, it makes sense for gas to cost as much as $5 per gallon.

A counterexample would be a town like Ellensburg, WA. Though it is technically a college town, density is low and mass transit is virtually nonexistent. This is a place you really couldn’t survive without a car. This is a place where you wouldn’t raise gas taxes, but also a place that would benefit from the increased gas tax revenues elsewhere.

An additional feature would be to only apply this variable gas tax to individual consumers at that point of sale. It would not apply to small businesses or freight, so the price of food or other goods would not be affected.

Just an idea I thought up on the ride home so there could be some major hole I’m missing. But I think it’s important to consider alternative tax structures that could help everyone.

Thoughts?