The U.S. and France have adopted contrasting models of motor fuel tax and highway finance policy. Fuel tax revenues are dedicated to state and federal highway funds in America, keeping taxes quite low, but preventing them from contributing to the general treasury. French motor fuel taxes are higher and make up nearly 11 percent of the central government's general revenues, excluding social security contributions. French highway finance relies heavily on tolls. Pressure from the U.S. federal deficit has reduced the highway trust fund's ability to protect highway spending from budgetary competition. Political and procedural changes in Congress make it likely that the U.S. will move away from exclusive dedication of motor fuel taxes.
One of the most striking and persistent policy differences between European nations and the United States is their vastly different levels of taxation of motor fuels and their divergent policies on dedicating ("earmarking") motor fuel taxes to special funds for highway construction. Taxes on motor fuel have become the most important stream of public revenue generated by automobile ownership and operation in all advanced industrial nations. This article explores the fiscal, organizational, and political ways the U.S. system of motor fuel taxation differs from what might be considered its polar opposite, the French system. It will focus on taxes, the flow of money, and the politics of who controls how the money is spent. The politics of restricting this revenue stream to spending on infrastructure for the automobile, to the exclusion of other uses, plays a major role not only in explaining French - Ameican differences in urban travel behavior, but also contributes to important differences in general budgetary politics and public finance. After examining the institutional and political conditions that constitute the two contrasting motor fuel tax systems, the analysis concludes with an assessment of the forces which may bring about change in each system.
Two Models of Auto Taxation and Infrastructure Finance
When democracy confronts automobility, important issues arise involving the taxation of automobiles and the provision of infrastructure. What kinds of taxes and fees should be levied on motor vehicles and motor vehicle fuels? Should the receipts from these taxes be seen as a convenient source of revenue for the general public treasury? If so, how high should the taxes be? Should receipts from motor vehicle taxes be specially dedicated "(earmarked") for highway purposes? Should the central government monopolize auto tax revenues, or should it share them with subnational governments? Should the government attempt to moderate the impact of the motor vehicle/highway system on other modes of transportation? If so, should it "divert" some of the highway tax revenue to support investment in and operation of other modes?
Clearly, the answers a nation gives to these questions will be influenced by its history, institutions, and values. France and the U.S. make an instructive contrast in this regard. As Suleiman (1987) notes, France "is generally considered to be the quintessential example of a 'centralized' or 'strong' state" with the power to "act independently of social groups." The image of the American state is one which is "decentralized ... divided and is controlled by a pluralist society." Sometimes these contrasting images correctly predict policy outcomes. It is no surprise to find French taxes on autos and gasoline to be much higher than in America. Yet if one had compared the excellent French system of routes nationales in the early 1920s to the abysmal American roads of that era, one would have been surprised to be told that decentralized, divided, low-tax America would take the lead in constructing a massive superhighway system decades aheas of France. One of the key reasons for this apparently paradoxical American highway …