Oregon and the Gas Tax Problem

In my opinion, a fuel tax is actually one of the least bad taxes. It almost always applies exclusively to those benefitting from its spending (ie roads). In theory, this should work out fairly. In reality, its almost impossible within the price system to reconcile the costs of road construction and maintenance with a gas tax. Despite the fact that wear and tear on roads probably correlates well with fuel consumption, it would be excessively complex to concretely correspond the two.

The “pay no attention to the man behind the curtain” system has gone on for awhile, but with the advent of electric, hybrid, and other new fuel efficient systems for cars, state governments have found it more and more difficult to finance road construction and maintenance. Of course, it doesnt help that they have raided transportation trust funds for decades to finance pet projects, service debts, and goodness knows what else. Nevertheless, assigning blame does not ameliorate the current situation. Indeed, the Oregon government has become the first to implement a proposal to tax drivers based on mileage.

The program is in what computer programmers would call “beta testing”, where outsiders are brought in to see if it works. 5000 drivers actually signed up to pay more taxes (give em credit!) and be tracked by the government. Oops! I just let the cat out of the bag. Yes, no matter how much officials may try to assuage our fears, it is inevitable that these devices will end up tracking our driving habits. And of course, it will be used to investigate people regardless of whether they did anything wrong. While the Supreme Court held in US v Jones (2012) that the government may not install a tracking device on a car without a warrant, its safe to bet that these devices will be mandated and leave the back door open.

As usual, governments think inside the box and focus on how they can monitor and control us more. It might also come as no surprise that tracking device manufacturers are taking a massive kickback (40%) from this program. There are other and better ways to pay for roads even if we dont fully privatize them, as libertarians dream. Highways are the easiest: they are already tolled sometimes. To pay for them, toll them all. Entry can be controlled to ensure payment.

Typically, highways charge a flat rate for each vehicle class regardless of traffic flow. This, of course, is idiotic and ignorant of economics. People always have choices or could have choices when prompted. During rush hour, the price of a road should go up as high as it takes to make traffic flow reasonably well. People will opt to carpool or take buses. Conversely, driving at 3am should be extremely cheap. Some people will find that they can delay their trip to off peak hours and save money (they also reduce congestion).

Congestion pricing has been proposed before, but it always results in debate. If there is ever an argument against government, it would be that obvious things take forever. New York City recently got around to realizing that its easier to toll inbound traffic double and outbound traffic nothing. An improvement, especially for outbounders, but there are still massive jams at morning (and afternoon) rush hour. After 10pm most nights, its a shockingly fast 40 minute drive to where I used to live. Perhaps, one day the City will realize that pricing according to traffic will accomplish everything everyone wants, including more use of transit.

Visualizations help our arguments

Visualizations help our arguments

Highways out of the way, we are still confronted with local roads. Property owners are usually responsible for maintaining their house, lawn, and sidewalk, why cant they take care of their roads? Its already done in a town called North Oaks in Minnesota. Property lines extend halfway into the street and residents either maintain their portion themselves or contract it out. Most people want their house to be accessible to themselves, their friends, deliverymen, and paramedics (but perhaps not for Jehovahs Witnesses, canvassers, and cops), so they will maintain it. Businesses want people to come to shop or use their service, so they have a strong incentive to make themselves accessible. Roads can be expensive, but if we cant afford to maintain our own road, then something is seriously wrong (maybe the roads are too big). If you still insist on government taking care of even local roads, the cost can be worked into property taxes based on how much road abuts a property.

While it would be ideal to fully privatize roads, and we should continue to advocate this, most people have not reached that mental state yet. In the meantime, it would be prudent to propose alternatives to the disturbing idea that cars should be tracked and taxed by the mile. The concept is expensive to implement and does not provide the benefits that other ideas provide, such as congestion pricing. In the end, an alternative scheme would accomplish the same goals, and might even go a ways towards solving other problems, such as pollution.

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