"VMT taxes that are aligned with the costs imposed by users would provide a better incentive for efficient highway use than fuel taxes do because the majority of those costs are related to miles driven," according to the report. "However, VMT taxes' effect on overall efficiency also would depend on how much it costs to put the taxes in place and to collect the money."

VMT tax collection costs could be higher than those for the current fuel tax because new vehicles would need to have electronic equipment installed while older vehicles would have to be retrofitted for transponders, the report notes. Unlike the fuel tax, CBO states VMT taxes might raise privacy concerns since the imposition of those taxes could give the government access to details on how particular vehicles are used.

While not making any specific recommendations, CBO does set forth various approaches for addressing privacy concerns. Those include limiting the information conveyed to the government and authorizing the use of devices for such other services as payment for parking.

Another approach included in the report involves giving individuals the option of paying a higher fuel tax rather than VMT fees.

"The optional fuel taxes would be set at rates high enough to appeal only to users with the greatest privacy concerns," according to the report.

The 38-page report, "Alternative Approaches to Funding Highways," is available at 1.usa.gov/CBO-Study.