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Don't forget pay-as-you-drive insurance. It's a true win-win, as it reduces driving by making more of the costs variable, but results in a savings to drivers.

Don't call it a carbon tax--call it a "carbon dividend." Tax has the nasty implication that it goes to fund government waste. Instead, use any revenue raised from charges to carbon to reduce payroll taxes. That way, people paying more at the pump will be compensated immediately with more take home pay. You could even include it on payroll stubs: "Carbon Dividend + $13.54." If you are not feeding a beast, then that is more money in your pocket. The people most hurt by this--the supposed welfare mothers driving Cadillac Escalades. Republicans will love it!

The gas tax needs to go up - but unfortunately that is a political nonstarter in the U.S.

Of course since this is a wish list none of it has to be politically feasible.

I'd say that cycling organizations should never suggest that we are indifferent about whether things are fair. Sometimes the only two options that seem to be on the table make us choose between efficiency and fairness, and we may have to choose efficiency. But cyclists are "the litte guy" and fairness must always be uppermost in our minds.

Within the realm of the doable, I'd like to see Maryland pass a statute to the effect that 10% of any general fund or sales tax revenues appropriated to state highways must be dedicated to bike-ped. The same might apply to localities, but separate facilities with their own budges are less necessary than training for the traffic engineers.

Virtually anyone that ever brings up a free market argument should support a congestion tax. There is only 20+ years of literature on it and it follows directly from the efficiency based argument.

And 20 years of free market thinking has got us what -- the worst recession since 1930?

VMT is a big excuse for IBM and Xerox to fantasize about running those computer systems.

The easiest plan for the gas tax is change it from a cents per gallon tax to a percentage change. Indexing it to inflation is stupid because it getting more expensive than the base inflation rate.

In insurance thing is a big deal and will help people to drive a lot less. I drive about 4500 miles a year and get a great $10 discount for that. My insurance should be a lot lower.

Getting to parking pricing is very tricky. Lots of unknown side-effects. As a general rule yes, the more expensive you make parking the less people own cars. But what you're trying to do is reduce car use, not attack car-ownership. Own a car and drive less.

VMT has some merits if deployed with different rates for off-peak/peak to reduce congestion, make better use of road capacity. And there's the argument that someday, our vehicle fleet will be too efficient to generate enough revenue to pay for the roads (those that say that day has already arrived are obviously quite wrong)

But on balance, i'm a much bigger fan of an increased gas tax. Our national goal shouldn't be just to fund the system, or even to get people driving less. It's to use less gas. And VMT bears no relationship to controlling speed, maintaining a well-running car, non-auto use of gas, requires a whole new infrastructure of monitoring and payment, or incenting people to buy fuel-efficient vehicles. Inventing variables like WC suggests (weight multipliers, displacement limits, etc) as proxies for what an effective gas tax could directly impact just create inelegant regulations ripe for the workaround.

The primary benefit to VMT many cite is the behavioral impact of drivers getting a discrete bill for their driving. Why not restructure the gas tax scheme to collect in this manner?

darren, I support a VMT and a gas tax. We have to move to a VMT eventually, or else those in electric cars will start to be free riders. We do need some way to pay for roads.

WC -- yes, eventually. But that eventuality shouldn't be (IMHO) until mass-marketable electric cars are being produced (way off), a grace period of several years where electric car buyers ARE allowed to be free-riders (to shorten the payback horizon), charging infrastructure is relatively common, and there's a predetermined threshold that demonstrates that the total vehicle fleet is tipping to electric (note that hybrids currently comprise a miniscule portion of the fleet, demonstrating how long it takes technology to pervade)

Jim, I think when we talk about fairness we either need to redefine fair - it is fair for cyclists to park for free but for drivers to pay because....or we are left working on their terms. The first option gets very complicated and the second is a loser for us. The third way to ask why fairness matters, and I think you pull the rug out from under them when you ask that question. That really is all they have. Opposition to bike lanes comes from giving so much space to such a small population because it's not fair (even though we only have 50 miles of bike lane on 3500 miles of road) etc... Take away the fairness argument and you leave them with little. It's like saying it isn't fair that those who go to the Naval Academy get to go for free but those who go to Maryland have to pay. The response is, that it's OK that it's not fair, because we want the best and brightest at the Naval Academy (and they give up some freedom, and take some risks, to go there).

I was going to let it go: but here's the logic: bikes are ok because the owners pay other taxes, electric cars are bad because they don't pay gas taxes.

Endless ways to tax electric cars: property tax, tires, consumables. No need to re-invent the wheel.

And the rhetoric about the USNA is pretty weak -- I thought they gave you a free eduction because you had to commit to a number of years of service.

Attacking fairness by saying "bikes are different" is fine, but the real problem is going after the same pots of money. hypothecated taxes taxes build entitlement, and the real answer is just admit the era of the gax tax is over, and we need gas tax revenue to be treated like all other revenue now (partially done in the 90s for deficit reduction)

I guess I like the very complicated explanation. But defining fair is not a bad thing. Fair does not mean that everybody has the same deal. Fair means a system which reasonable disinterested people would agree to be an equitable way of distributing benefits and burdens.

My impression is that few people think that it is unfair to give bikes free parking or free use of the roads. (The red light thing does bother people, but that is not our topic for today.) The misinformed think that driving covers costs--it may well be within our ability to get the facts out.

But of course you are right that people resist the idea of incorporating bad externalities into prices. Our misfortunte that government is perceived as being a monumental wealth transfer from workers to the idle. So people who do not want to feed the welfare state end up opposing price-correcting taxes.

Charlie: With tolls making a comeback, and electronic enforcement of some traffic violations seeming almost like a user fee rather than punishment, I think there is some chance that driving will continue to pay a fraction of its costs on a per mile basis. The main problem with the gas tax is that people cross borders to avoid it, whenever it comes close to paying the cost of driving.

Two quick points that don't do justice to this long, thoughtful post, but I wanted to plant a flag and don't have much time: 1. I'll just stipulate that any kind of "carbon tax" is pointless, as is fairly clear now for those with eyes to see and will become increasingly clear in time. 2. Among many other things, a higher gasoline tax, if not a war on drivers, is definitely a war on the mobility of non-urban America.

Oh damn, and I forgot one other thing: An enormous amount of goods is moved by long-haul trucks; any tax you impose on the system that moves that stuff around will needlessly hike those prices and penalize both consumers on the one hand and producers on the other. Bad policy.

I don't think its a "war on drivers" to ask them to pay for what they use, any more than it is a "war on teenagers" to ask them to pay for gas when they borrow the car.

The US touts a lot about the free market, but has lots of subsidies that lead to inefficient allocation of resources. Ending these subsidies is good fiscal and economic policy.

As for the "long haul trucks": you can raise your prices to reflect the real costs without having people move things on bikes and donkeys, etc. Most countries have MUCH higher gas taxes, and still have trucks etc. They use smaller trucks on the shorter routes than what you see in the USA, which saves a lot. They also focus on better logistics management.

But keeping gas cheap is a penalty to long haul railroads. Why should we favor trucking over rail?

I would also argue that raising the price of goods to pay for the roads that move them is not a needless expense, but rather the way that the world works. If you don't do it with a gas tax, you'll have to tax something else like income or consumption which pretty much has the same effect. Why is a user fee worse policy than charging non-users?

Finally, why is a carbon tax pointless? I have eyes that see, but I don't get that one.

charlie, in my scenario, roads would be paid for entirely with gas taxes. So, in that case, cyclists actually would be free riders.

Electric cars don't have many consumables, and it will be a steep tax on tires if that's how you plan to pay for roads. You don't have to reinvent the wheel to make a VMT work. When you buy gas, your odometer transmits new mileage to the gas pump and the tax is added to your gas bill. It's pretty simple and is already in testing in Washington State. [By the way, as an engineer I'm a big fan of reinventing the wheel. Even when there's no need to, it's a lot of fun. EZ-Pass reinvented the wheel, and I think it's been a great improvement.]

The inducements to commute by car from distant suburbs and to haul freight by truck rather than the far more efficient rail are simply one more in a long line of thumbs on the scales of the economy. I do all sorts of things to reduce my need for health care and yet my health insurance is expensive and difficult to obtain. I commute to work and do the bulk of my shopping by bike and yet a significant part of the cost of maintaining roads and paying for the military forces that protect a huge oil economy infrastructure comes out of my unavoidable income taxes rather than the fairly minimal gasoline taxes. I am all in favor of letting the taxes reflect the actual cost to the government of maintaining the systems and services that incur those costs rather than the distortions that generations of lobbyists have tilted the system with. I would much rather pay for the cost of maintaining a road that sees bike traffic than SUV traffic and I would much rather NOT pay insurance premiums for the kinds of illness that a severely overweight smoker is likely to face. I can't really have those things of course but railing against the broken system is cathartic. ;-)

Logistics providers and the industry that uses them are actually in favor of pricing mechanisms that deliver congestion reduction and maintenance of the system. Travel time reliability is king in logistics, and even just relying on gas tax to cut discretionary travel would yield gains.

Also, gas tax would not hit road freight quite as hard as drivers, as much more of their contribution comes through other fees, and diesel fuel is already taxed at a different rate than gasoline (currently perversely higher, could be kept static)

Finally, to the point that taxing over-the-road freight is "pointless" -- besides the freight/truck algebra, one of the reasons for the death spiral of local businesses (main street, local farms, all that touchy feely stuff) is the artificially low cost of getting your big-box blueberry blintzes from China rather than locally, enabled in part by the brutal speed and efficiency of the supply chain. tip the scales a bit, and maybe Olsson's could have narrowed that price gap to Amazon a bit.

re: "definitely a war on the mobility of non-urban America."

No way. Say we QUADRUPLE the gas tax. That would theoretically raise the price of gas $0.55 a gallon, or a price rise of a bit above 20%. Phase in that increase to allow the noble suburbian to trade in their suburbans, or in the spirit of liberty, just keep on doing what you're doing, but now paying your fair share.

And that additional tax may not even hit your pocketbooks -- will the imperfect supply market of oil producing nations actually allow that price hike to actually be borne out at retail?

Rural/exurban folks can still move about exactly as they did before. Or, perhaps they'll demand other mobility options, or reexamine land use and preserve their small-town commercial centers, or their property taxes will go down because no one wants to live out there anymore.

But whatever happens, i'm tired of subsidizing their choices, choices that yield no benefit to anyone but them.

In Maryland, about 6.5 percent of the sales tax and corporate income tax go into the state tax fund. (Maryland charges a 23.5 cent state gas tax in addition to the 18.5 cent federal tax. A 10 or 25 cent/gallon increase could eliminate the corporate and sales tax subsidy, depending on whether you view the 6% sales tax on cars that goes to roads as a diversion of the sales tax revenue or as a user fee. So in Maryland, raise the gas tax 25 cents/gallon and drivers will be paying for the cost of state highways.

I'd like to see localities provided with authority for a gas tax to fund local roads. They would not use it to full effect out of fear of losing gas sales to neigboring jurisdictions.

Note that whatever objections some people may have to roughly 5 cents/gallonmg of the gas tax going to mass transit, it is far less than the road subsidy from sales and corporate income tax.

The argument about flow through costs of higher gas taxes that, e.g. raise the prices for trucking, ignores the EXISTING costs that are inequitably borne.

If you raise taxes on gas, the price of goods shipped by truck would rise. There would be a general increase in the costs of goods. However, this increased costs ignores the savings at the othre end. This is because the average consumer is also paying for the roads through other taxes that are diverted to subsidize the roads.

Thus, a gas tax that captures its real costs should permit a reduction in the other taxes, and so the consumer (as a class) is financially no better or worse off as a class. More importantly, however, eliminating subsidies reduces the inefficient allocation of resources, and so the consumer should be a net beneficiary.

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