America has a free rider problem.
Except when she doesn’t.
Except when she does.
Except when she doesn’t.
Depending on who you talk to, progressive taxation combined with various forms of welfare are either a justified “redistribution” of wealth by the government (I scare-quote “redistribution” because the government didn’t distribute that wealth in the first place) or armed robbery coupled with moral hazard.
Depending on who you talk to, forcible deduction of union dues in public service jobs is either a violation of the right of association or a remedy for those who’d benefit from union negotiations without contributing to the organization.
And, depending on who you talk to, electric and ultra-high-mileage vehicles that use public roadways while paying little or nothing in the way of fuel taxes that are meant to maintain those roadways are either contributors to eco-responsibility that should be rewarded or freeloaders that use a public good without paying into its upkeep.
Today’s focus is on that last instance, in the context of comments by Transportation Secretary Pete Buttigieg regarding a mileage tax.
It should come as no surprise that increases in fuel economy along with an increased population of fully electric vehicles are reducing the revenue collected from fuel taxes. Since these taxes are (purportedly) earmarked for road construction and maintenance, the funds to keep the roads smooth and functional are decreasing per mile driven.
The advent of Electric Vehicles (EVs) exacerbates a longer-running problem: a disparity in usage vs payment. A 3000 lb Toyota Prius gets triple the mileage of a 3600 lb Ford Mustang, but does not wear the pavement only 1/3 as much. If we go by weight, a Mustang is only wearing the road 20% more than a Prius, meaning that the Prius driver is being subsidized by the Mustang driver. Now, with Teslas and other EVs paying no gas tax whatsoever, the Prius driver joins the Mustang driver in subsidizing the (likely more affluent) Tesla driver. And that’s before we get into government subsidies and purchase incentives.
Whether this particular free rider phenomenon is a “problem” or not likely depends on your worldview, but it is a reality that stands apart from your philosophy that road dollars are diminishing even as miles driven are increasing. As always in matters of public policy, Other People’s Money (OPM) trumps everything else, and what’d have been considered anathema just a couple years ago by many is now being given serious thought.
While it is a safe bet to presume that anything that comes out of this administration is antithetical to libertarian or small government or free-market views, it’s proper that everything be considered on its own merits. Regular readers with savant-level recollection may flash back to mid-2017, when I blogged in favor of a mileage tax. In favor, that is, if it replaces, rather than augments, the gasoline tax. ‘Pay for what you use’ is fair and equitable, and is certainly a better-balanced source of funding for public roads than a tax that some don’t pay at all, and that doesn’t correlate well to actual imposed wear-and-tear. And, yes, it should be “weighted,” since a heavier vehicle does more than a lighter one.
Now, I don’t know the details of Buttigieg’s plan, and I’d not be shocked if it still favored EVs and hybrids, and I’d be very shocked if it involved eliminating the gas tax and strictly going with a mileage tax, but I do urge readers to ponder the idea with an open mind, rather than summarily dismiss it. After all, it would address this particular free-rider problem, and libertarians (and conservatives and moderates and liberals) shouldn’t like free-riders.
It would also advance the “user-fee” concept of taxation vs the “bucket of money” angle that makes no distinction between pay-for-service and rob-Peter-to-give-to-Paul, helping reframe public expenditures in America.
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