Somebody has to pay for the roads and bridges. Ideally, government-maintained infrastructure should be financed through use taxes so everyone pays in accordance with the benefits they receive. A federal and state gas tax regime has been in place for some time, but the federal trust fund is approaching insolvency. Spurred by the decline in oil prices, a bi-partisan group recently introduced the \u201cBridge to Sustainable Infrastructure Act\u201d to raise the gas tax by as much as 40% to \u201crebuild our crumbling infrastructure.\u201d Arguably, raising the gas tax might be necessary if the funds generated are insufficient for maintaining highways, but this proposal is fraught with problems and requires deeper analysis.<\/p>\n
First, any and all revenue from a gas tax should be used strictly for infrastructure. Currently, this is not the case. According to a 2013 Heritage Foundation study, significant chunks are allocated to bicycle lanes, light rail, landscaping, and even a transportation museum. Before the fund can be deemed insolvent and any tax increase is discussed, these nonessential expenditures must be stripped from the budget.<\/p>\n
Second, we need to take a closer look at sources of funds. Proponents of a tax hike claim that one is needed to replenish the trust fund\u2019s expected $168 billion deficit. Without an increase, Congress would likely appropriate general funds to make up the difference. But if this shortfall is to be financed with a gas tax instead of general funds, then the tax increase will free up other funds for other uses, not necessarily road projects. Why not propose a corresponding cut in the income tax to balance the increase in the gas tax?<\/p>\n
Third, much of the $787 billion Obama stimulus package was supposed to finance infrastructure, yet relatively little actually went to highway projects. This illustrates the shell game that occurs whenever taxes and spending are assigned to politically popular purposes like highways, safety, and education.<\/p>\n
Finally, most politicians assume that all highway maintenance must be government-financed, usually at the federal level. I contend that no funds from a federal gas tax should be used for state or local roads; these can be financed through state or local taxes. Moreover, private involvement through tolls can align the specific costs of infrastructure with users of specific projects without the need for more taxes. Federal government involvement in highways is way out of control both constitutionally and pragmatically, but I\u2019ll save that topic for another day.<\/p>\n
To the extent that governments will be involved in financing highway projects, federal and state gas taxes are reasonable options, but 100% of the funds generated must be allocated to actual highway projects and any \u201cnecessary\u201d increase in gas tax rates should be balanced dollar for dollar with an across-the-board cut in income tax rates. I don\u2019t expect either of these provisions\u2014especially the second one\u2014to be part of the proposal. The \u201cBridge to Sustainable Infrastructure Act\u201d is neither sustainable nor completely about infrastructure. It\u2019s jut another tax increase.<\/p>\n","protected":false},"excerpt":{"rendered":"
Somebody has to pay for the roads and bridges. Ideally, government-maintained infrastructure should be financed through use taxes so everyone pays in accordance with the benefits they receive. A federal and state gas tax regime has been in place for some time, but the federal trust fund is approaching insolvency. Spurred by the decline in […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/posts\/908"}],"collection":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=908"}],"version-history":[{"count":0,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/posts\/908\/revisions"}],"wp:attachment":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=908"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=908"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=908"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}