Quote:
Originally Posted by pesto
The obvious answer is to repeal the gas tax. It saves adminsitrative and collection issues as well. If there is a desire to spend more money on transit, highways or whatever, run the funding through the income tax system like most other expenses and let it be subject to the usual debate.
Just as a side note, spending on more expensive fuels in the US instead of cheaper fuels abroad hurts the US over time. This was Ricardo's law of comparative advantage, which has not been questioned for 200 years (because it's true).
Borrowing from the general fund should be a criminal offense.
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I was gonna make a point, but then my logic contradicted itself.
Gas taxes don't make a whole lot of sense as a sustainable funding mechanism in an era when virtually everybody drives, and the revenue is spent on more than just roads. The initial idea (that the small group of elite auto owners would pay the cost of the expensive new roads they themselves were demanding) no longer makes sense.
Unfortunately, any alternative scheme just messes with the incentives. Eliminating the gas tax makes gas cheaper and increases the attractiveness of driving while lowering the incentive to purchase more fuel-efficient cars. A VMT tax has serious privacy implications, even assuming the government can find a viable and cost-effective way to assess and collect it.
Funding transportation out of the general fund means that transportation becomes even more subject to cuts during lean times, while a dedicated revenue source would maintain spending at a constant level.
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It would be interesting to set up a transit system to charge much higher rates (3x-4x current fares) to people who also own a vehicle. People without a vehicle could apply for a reduced fare card, regardless of income, while car owners and anybody without the card would pay the much higher rate. This would discourage car ownership in cities without putting the burden of transit funding on rural populations who don't use transit.
Unfortunately, this also comes with an incentive darkside - it discourages transit use in cities for those who do own cars. It would be successful only in a major city where people of all classes understand the value of transit service, and where living car-free is a viable option. I suppose you could exempt scooters and certain compact cars from consideration as a stop-gap measure until the increased revenue permits the construction of a decent transit network.