The Least Regressive Way to Fund Highways

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It’s past time that we should implement congestion pricing for our highways. Of course some like to point to the fact that such a charge would be regressive – that those of lower income pay the same as someone of higher income (interestingly, these same people do not seem concerned, or even aware of other regressive issues).

In “Just Pricing: The Distributional Effects of Congestion Pricing and Sales Taxes,” a paper published in the journal Transportation by Lisa Schweitzer of USC and Brian D. Taylor of UCLA, this issue is immediately confronted: “This contention, however, fails to consider (1) how much low-income residents already pay for transportation in taxes and fees, or (2) how much residents would pay for highway infrastructure under an alternative revenue-generating scheme, such as a sales tax.”

Funding roads with a sales tax is a big of slight-of-hand and simply hides the cost of driving for most people. The gas tax is more immediate, but the average driver is paid less than $0.02 for each mile traveled. This is the lowest rate in the devleoped world and just a fraction of what we paid decades ago. Are we so commited to preserving this “American” way of life that we will subsidize its contiuation and expansion by any means necessary? Including hiding regressive taxes and then denying it? Clearly some are and they will.

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