Should tolls replace motor fuel taxes for funding highways?

[wxfree]

How do you apportion those percentages? 

For example, I drive (a lot) in Maryland and Virginia, as well as lesser amounts in the District of Columbia, Delaware, West Virginia, Pennsylvania, North and South Carolina.

That's an important question.  I travel long distances across Texas, but only occasionally out of state.  My usual trip to Oklahoma has me buying about 7 gallons of fuel there and paying $3 in tolls, so I do contribute there.  But where states are smaller, it's easy to drive across a whole state and not buy fuel (sometimes intentionally if prices, or taxes, are higher there).  In this way, the current system has some degree of inequity.

A straight tax per mile would be even more inequitable, since you'd never pay taxes in another state, regardless of travel.  Without tracking, this is a difficult problem.  One approach would be to have the entire system administered at the federal level.  I don't think that would be a popular idea.  The current fuel tax is partly federal, which helps to balance the effect of traveling in states in which one buys no fuel and pays no tolls.  This is a matter that needs to be studied and discussed.  I hope the solution we come up with isn't more toll roads, or tracking everyone all the time.

[DaBigE]

The gas tax hits drivers of inefficient and heavy cars more than efficient and light cars, and as you say it doesn't hit drivers of all-electric cars at all.  I think it's actually a good thing that it hits drivers of inefficient cars harder.  It's incentive to buy more efficient cars and keep the cars you have in good shape.

Except one of the other problems is that many of those who drive the older, heavier, less fuel-efficient vehicles are less able to buy anything more efficient. Hitting them harder at the pump makes them even less able to afford anything better.

[vdeane]

What would happen if we just funded highways from the general budget rather than having a specific money source?

The gas tax hits drivers of inefficient and heavy cars more than efficient and light cars, and as you say it doesn't hit drivers of all-electric cars at all.  I think it's actually a good thing that it hits drivers of inefficient cars harder.  It's incentive to buy more efficient cars and keep the cars you have in good shape.

Except one of the other problems is that many of those who drive the older, heavier, less fuel-efficient vehicles are less able to buy anything more efficient. Hitting them harder at the pump makes them even less able to afford anything better.

I thought the primary drivers of SUVs were soccer moms.

[Kacie Jane]

The gas tax hits drivers of inefficient and heavy cars more than efficient and light cars, and as you say it doesn't hit drivers of all-electric cars at all.  I think it's actually a good thing that it hits drivers of inefficient cars harder.  It's incentive to buy more efficient cars and keep the cars you have in good shape.

Except one of the other problems is that many of those who drive the older, heavier, less fuel-efficient vehicles are less able to buy anything more efficient. Hitting them harder at the pump makes them even less able to afford anything better.

I thought the primary drivers of SUVs were soccer moms.

When he says "older, heavier, less fuel-efficient", I think he's referring to people still driving clunkers from the 80s because they can't afford anything better.  New SUVs are not the only inefficient vehicles on the road.

[DaBigE]

The gas tax hits drivers of inefficient and heavy cars more than efficient and light cars, and as you say it doesn't hit drivers of all-electric cars at all.  I think it's actually a good thing that it hits drivers of inefficient cars harder.  It's incentive to buy more efficient cars and keep the cars you have in good shape.

Except one of the other problems is that many of those who drive the older, heavier, less fuel-efficient vehicles are less able to buy anything more efficient. Hitting them harder at the pump makes them even less able to afford anything better.

I thought the primary drivers of SUVs were soccer moms.

When he says "older, heavier, less fuel-efficient", I think he's referring to people still driving clunkers from the 80s because they can't afford anything better.  New SUVs are not the only inefficient vehicles on the road.

Exactly what I was referring to, (the original post I was responding to did not say SUVs, although they could have been referring to cars as a generic term for anything on four wheels, I suppose). Some may be stuck with an older SUV as well. There's not exactly a huge market for late-model Suburbans and Expeditions. Those driving around new SUVs don't have any excuses.

[kkt]

The gas tax hits drivers of inefficient and heavy cars more than efficient and light cars, and as you say it doesn't hit drivers of all-electric cars at all.  I think it's actually a good thing that it hits drivers of inefficient cars harder.  It's incentive to buy more efficient cars and keep the cars you have in good shape.

Except one of the other problems is that many of those who drive the older, heavier, less fuel-efficient vehicles are less able to buy anything more efficient. Hitting them harder at the pump makes them even less able to afford anything better.

True, but it creates an incentive to cut gas consumption in other ways.  Less pleasure trips, move closer to work.  It also reduces the value of old clunkers that get 12 MPG, so they are more likely to be scrapped.

[kkt]

What would happen if we just funded highways from the general budget rather than having a specific money source?

Then the highways budget would be cut drastically, just like all domestic spending that doesn't have a dedicated funding source.

[cpzilliacus]

NewGeography.com: Higher Gas Tax Unlikely to Gain Support in Congress

Although some infrastructure advocates are hoping to use the current budget negotiations to win support for an increase in the federal gasoline tax, the idea is unlikely to gain support in Congress or the Administration.  While  the 2010 Simpson-Bowles deficit-reduction commission proposed raising the federal gas tax by 15 cents/gallon as part of a broad deficit-reduction plan, neither House Speaker John Boehner (R-OH) nor Senate Majority Leader Harry Reid (D-NV) have endorsed the idea.  Nor is an increase in the federal gasoline tax popular among  the rank-and-file.  Most lawmakers see the pressure to raise it as coming only from a narow coalition of liberal advocacy groups and transportation stakeholders that stand to benefit from increased federal transportation spending.

[DaBigE]

The gas tax hits drivers of inefficient and heavy cars more than efficient and light cars, and as you say it doesn't hit drivers of all-electric cars at all.  I think it's actually a good thing that it hits drivers of inefficient cars harder.  It's incentive to buy more efficient cars and keep the cars you have in good shape.

Except one of the other problems is that many of those who drive the older, heavier, less fuel-efficient vehicles are less able to buy anything more efficient. Hitting them harder at the pump makes them even less able to afford anything better.

True, but it creates an incentive to cut gas consumption in other ways.  Less pleasure trips, move closer to work.

Except if they're consuming less gas, they're only inflating the revenue stream problem. Those least able to afford better vehicles are usually the ones not going on random road trips and are not easily able to move. In my case, I physically cannot move any close to work. The only residential housing near my office has an income limit regulation (aka, I make too much to live there).

It also reduces the value of old clunkers that get 12 MPG, so they are more likely to be scrapped.

Which is less incentive for those that can barely afford a car to get rid of it.

IMO, there has to be a different way of funding our roads...not thru tolling nor thru never-ending fuel tax hikes. How about a tax on goods not produced on American soil? It could act as an incentive to bring jobs back here and fund our infrastructure,.

[J N Winkler]

IMO, there has to be a different way of funding our roads...not thru tolling nor thru never-ending fuel tax hikes. How about a tax on goods not produced on American soil? It could act as an incentive to bring jobs back here and fund our infrastructure.

Ever heard of Smoot-Hawley?

[cpzilliacus]

IMO, there has to be a different way of funding our roads...not thru tolling nor thru never-ending fuel tax hikes.

Never-ending?  Where do you live?

The federal motor fuel tax per-gallon rate has not been increased since the earliest years of the Clinton Administration (and  then-Sen. Phil Gramm (R-Texas) claimed that the increase was going to wreck the U.S. economy - no word if Gramm (who now works for Swiss bankers) has ever retracted that comment).

[Chris]

Yep, tolls do not replace the gas tax, but supplement them to fund projects that would have otherwise been unfunded.

[DaBigE]

IMO, there has to be a different way of funding our roads...not thru tolling nor thru never-ending fuel tax hikes.

Never-ending?  Where do you live?

The federal motor fuel tax per-gallon rate has not been increased since the earliest years of the Clinton Administration (and  then-Sen. Phil Gramm (R-Texas) claimed that the increase was going to wreck the U.S. economy - no word if Gramm (who now works for Swiss bankers) has ever retracted that comment).

I wasn't necessarily refering to just federal gas taxes. Up until a couple years ago, Wisconsin automatically adjusted their state gas tax. That law was repealed under a change in administration/party control in the state capitol. Until then, the state gas tax would automatically go up by a set amount each year. I also made that statement based on how if policticians raise the tax once, they've opened the door to do it again--similar to [at least Wisconsin's] cigarette tax increases over the years.

IMO, there has to be a different way of funding our roads...not thru tolling nor thru never-ending fuel tax hikes. How about a tax on goods not produced on American soil? It could act as an incentive to bring jobs back here and fund our infrastructure.

Ever heard of Smoot-Hawley?

At one point I probably did, but it's been a while since my last US History class.

[kkt]

The gas tax hits drivers of inefficient and heavy cars more than efficient and light cars, and as you say it doesn't hit drivers of all-electric cars at all.  I think it's actually a good thing that it hits drivers of inefficient cars harder.  It's incentive to buy more efficient cars and keep the cars you have in good shape.

Except one of the other problems is that many of those who drive the older, heavier, less fuel-efficient vehicles are less able to buy anything more efficient. Hitting them harder at the pump makes them even less able to afford anything better.

True, but it creates an incentive to cut gas consumption in other ways.  Less pleasure trips, move closer to work.

Except if they're consuming less gas, they're only inflating the revenue stream problem. Those least able to afford better vehicles are usually the ones not going on random road trips and are not easily able to move. In my case, I physically cannot move any close to work. The only residential housing near my office has an income limit regulation (aka, I make too much to live there).

There's lots of choices.  Around here there seem to be lots of inexpensive older Hondas and Toyotas that may be less desirable because of age but still get decent mileage.  Other people may chose to eat the increased taxes rather than change what they drive or how much they drive.  I realize wanting something for nothing is practically the American Way, but somebody has to pay for the roads.

It also reduces the value of old clunkers that get 12 MPG, so they are more likely to be scrapped.

Which is less incentive for those that can barely afford a car to get rid of it.

IMO, there has to be a different way of funding our roads...not thru tolling nor thru never-ending fuel tax hikes. How about a tax on goods not produced on American soil? It could act as an incentive to bring jobs back here and fund our infrastructure,.

We have mutual treaties with many countries about not taxing imports... we don't tax what we import from them, they don't tax things they import from us.  The last time we decided to start taxing each other's imports, it made the great depression much, much worse in countries all over the world.

There's no Magic Road Fairy that's going to pay for maintaining and expanding our roads.  We need to pay for what we use.

[DaBigE]

There's no Magic Road Fairy that's going to pay for maintaining and expanding our roads.

Which is why I favor infrastructure being a line-item in the overall budget and not as a tax or toll, as many municipalities already do. Even if you don't own a car, your existence depends on our infrastructure (fire, ems, police, parcel delivery...).

We need to pay for what we use.

That's a topic for a whole new thread...the ole "I don't use it so why should I have to pay for it" slippery-slope.

[J N Winkler]

I wasn't necessarily refering to just federal gas taxes. Up until a couple years ago, Wisconsin automatically adjusted their state gas tax. That law was repealed under a change in administration/party control in the state capitol. Until then, the state gas tax would automatically go up by a set amount each year. I also made that statement based on how if policticians raise the tax once, they've opened the door to do it again--similar to [at least Wisconsin's] cigarette tax increases over the years.

Wisconsin made a mistake when it abandoned indexation (under, rather unbelievably, a Democratic governor).  Kansas is considering adopting it.

A tax escalator on cigarettes has a public-policy justification since the primary purpose of tobacco taxes is to discourage consumption, not to raise revenue.

IMO, there has to be a different way of funding our roads...not thru tolling nor thru never-ending fuel tax hikes. How about a tax on goods not produced on American soil? It could act as an incentive to bring jobs back here and fund our infrastructure.

Ever heard of Smoot-Hawley?

At one point I probably did, but it's been a while since my last US History class.

What the example of Smoot-Hawley should tell you is that if you are going to propose tariffs to fund infrastructure, you have to account for the possibility of other countries applying retaliatory tariffs to our exports.  We would not be able to head off such retaliation by arguing that the revenue collected is for infrastructure, because the other countries would then ask us why we were abandoning our long-standing and economically rational adherence to the user-pays principle, and we would not be able to supply a good answer to that question.  Unless care is taken to confine tariffs to sectors where retaliation is unlikely, they can easily have the effect, opposite of what is intended, of increasing domestic unemployment.

Trade policy is complex and politically loaded enough without introducing the extraneous objective of ensuring that the tariffs collected are sufficient to fund highways.

There's no Magic Road Fairy that's going to pay for maintaining and expanding our roads.

Which is why I favor infrastructure being a line-item in the overall budget and not as a tax or toll, as many municipalities already do. Even if you don't own a car, your existence depends on our infrastructure (fire, EMS, police, parcel delivery...).

But those are access-related uses, not through-traffic-related uses.  It is appropriate to have a small copayment from property taxes in respect of the access function that the highway infrastructure serves.  It does not follow that the property tax (or any of the revenue sources which municipalities can access under their taxing powers) is appropriate as the revenue mainstay for the highway system as a whole.

We need to pay for what we use.

That's a topic for a whole new thread...the ole "I don't use it so why should I have to pay for it" slippery-slope.

This is beside the point.  The highway system is at present supported primarily by direct user fees.  If you don't travel on the highways, you are not charged.  If you travel on the highways, you are charged (at least as long as you do it in a vehicle which consumes taxable fuels).  If you don't travel on the highways but buy goods or services which entail an element of highway transport, the providers of those goods or services pay for their use of the highways out of the money they collect from you.

It is not like schools, which property owners support through taxes on land even when they are well past childbearing age.

[kkt]

There's no Magic Road Fairy that's going to pay for maintaining and expanding our roads.

Which is why I favor infrastructure being a line-item in the overall budget and not as a tax or toll, as many municipalities already do. Even if you don't own a car, your existence depends on our infrastructure (fire, ems, police, parcel delivery...).

In most places in the U.S., property taxes pay for local roads.  The gas taxes are used for state routes, maybe regional routes.

The point of having a (mostly) free market is that the prices of things reflect the cost to provide them.  Subsidizing some modes distorts that market.  If the highways are subsidized by property tax, income tax, or import taxes, that will penalize other means of transportation or possible alternatives to moving people or things around as much.  For instance, railroads for freight come much closer to paying their own way than intercity trucks because they're a fundamentally more efficient in labor, land required for right of way, and fuel.

I'm not opposed to local roads being paid for by property tax, but I certainly don't think we should extend the use of non user taxes to pay for highways.  (And if you think the roads we get even as much maintenance as they do now if they were competing with everything else from the general fund, well, I think you're very much mistaken.)

We need to pay for what we use.

That's a topic for a whole new thread...the ole "I don't use it so why should I have to pay for it" slippery-slope.

I use roads and I'm not trying to weasel out of paying for them.  But I'm not trying to make people pay for my share who live carless.

[Mr_Northside]

The gas tax should be a percentage of the sale price, not a fixed charge per gallon.  Most every other tax is a percentage of the sale price, not per amount.  That way it wouldn't have to be adjusted for inflation (or else dwindle down to not enough to fund maintenance).

I'm gonna have to completely disagree with this. 

I do think the gas tax should be a flat rate, indexed with inflation.... But certainly not directly tied to the price of gasoline. 
It's something that's just way to volatile.  From a gov't budgeting perspective, I think it could be too unpredictable, and for the consumer, when the price spikes, it will be compounded by the nature of a tax on the price/gal.
Some crisis in the Middle East, or natural disaster (a la Katrina) disrupting oil supplies, or incidents that shut down major refineries that raise prices would result in windfalls, and price slumps (which don't happen often enough for my tastes...) would have the opposite effect.

With more and more cars using less gas / diesel, at some point a mileage-based funding solution will probably have to happen anyway.

[kkt]

The gas tax should be a percentage of the sale price, not a fixed charge per gallon.  Most every other tax is a percentage of the sale price, not per amount.  That way it wouldn't have to be adjusted for inflation (or else dwindle down to not enough to fund maintenance).

I'm gonna have to completely disagree with this. 

I do think the gas tax should be a flat rate, indexed with inflation.... But certainly not directly tied to the price of gasoline. 
It's something that's just way to volatile.  From a gov't budgeting perspective, I think it could be too unpredictable, and for the consumer, when the price spikes, it will be compounded by the nature of a tax on the price/gal.
Some crisis in the Middle East, or natural disaster (a la Katrina) disrupting oil supplies, or incidents that shut down major refineries that raise prices would result in windfalls, and price slumps (which don't happen often enough for my tastes...) would have the opposite effect.

With more and more cars using less gas / diesel, at some point a mileage-based funding solution will probably have to happen anyway.

I see your point.  The only thing is that if the tax is indexed to inflation, once a year or so some official or commission is going to have to make a press release announcing how much the new tax is.  Rationally, that should be okay, but politically every time that happens it would be a lightning rod from people who think they're overtaxed.  It becomes a cheap political short-term fix to end the annual adjustment, and then we're right back where we are now.

[J N Winkler]

I see your point.  The only thing is that if the tax is indexed to inflation, once a year or so some official or commission is going to have to make a press release announcing how much the new tax is.  Rationally, that should be okay, but politically every time that happens it would be a lightning rod from people who think they're overtaxed.  It becomes a cheap political short-term fix to end the annual adjustment, and then we're right back where we are now.

Another reason to keep the fuel tax as a volume-based excise tax rather than an ad valorem tax is that it preserves the principle of charging proportionately to use.

Wisconsin had annual adjustment of the fuel tax to account for inflation for more than 20 years before it was abolished, so I don't think we should shy from indexation simply because a fit of short-termist thinking in the future would lead to it being abolished.  It is in any case a fundamental principle that one session of the legislature cannot bind future sessions of the same legislature, which is one reason the rule of dedicating fuel taxes to highways (or to transportation in general) has had to be elevated to a constitutional amendment in many of the states that have it.

[cpzilliacus]

[Seems appropriate to bump this old thread]

Washington Post: 5 things to know about highway tolling

1. What does current federal law say?

It prohibits states or the federal government from establishing tolls on existing interstate highways. When states expand the system – think of the HOT lanes that opened last year in Virginia, and Maryland's Intercounty Connector – they may receive permission to apply tolls on new lanes.

2. What is the White House proposing?

The administration wants to leave it to states to decide whether they want to toll their interstates. Money from new tolling would have to be used for repair and reconstruction of roadway systems, and the U.S. secretary of transportation would have to approve any new tolling plans for interstates.