Magazine article Insight on the News

No: New Technology Shouldn't Require New Taxes

Magazine article Insight on the News

No: New Technology Shouldn't Require New Taxes

Article excerpt

It's 2015. Twenty years of voter revolutions have shrunk the federal government to a small building behind Union Station. Welfare is a memory, Disney owns Amtrak and even the roads on which we drive are all private owned.

As you speed down Interstate 95 (limits are passe) dodging potholes and other roadway hazards, a satellite tracks every second you spend on the road - and charges you for it. At the end of the month, the debit is subtracted from your bank account: You've spent $ 1,000 driving on roads that your tax dollars helped build in the 44 years from 1956 to 2000. And if, God forbid, you happened to use the roads during peak travel time (the time most of us need to get to and from work) your bill could be twice that.

This is the brave new world envisioned by the Cato Institute in its report, "The Case for Privatizing the Highways." Author Peter Samuel argues that, because traffic congestion is so annoying, roads should be sold off piecemeal to the highest (private) bidder, who would charge drivers for use. Because new technologies would make paying the tolls almost effortless, Samuel implies, no one would mind the charges. Congestion would end because drivers magically would find new routes to the workplace or be able to change their work schedules so that no one else would be on the road at the same time.

Someone should tell the Cato analysts that when formulating highway policy they should stand upwind from the gas fumes. Our roads do have problems, but congestion - while bad - isn't the worst of them. Our nation's highway system is the economic envy of the world. But it's falling apart.

According to the Federal Highway Administration, in 1992, more than 242,000 miles of roads were in poor-to-mediocre condition. More than 102,000 bridges needed repair or replacement. The backlog for needed repairs stands at over $290 billion. At the same time, billions of dollars languish unspent in the Highway Trust Fund, while commuters sit in traffic jams on roads not built to handle all the cars they carry.

So, should we sell off the entire network, road by road, to private operators? Or can the current system be fixed?

When Americans are asked to name programs in which government should be involved, they invariably name highways. When asked which roads are the best, they point to the federally funded interstates. They also believe the federal gas tax is justified if it goes toward road and bridge improvements. With so many other less popular candidates for privatization, why change the one that people applaud?

The Highway Users Federation supports a dialogue on federal vs. state roles, innovative financing and privatization. While there is a real need for more private capital in road construction, operation and maintenance, a federal highway program remains essential to meeting America's interstate commerce and national defense needs. There are better solutions to the problems threatening our nation's highways, including full funding of highway programs and more public-private partnerships. Two solutions are vital.

First, stop diverting the Highway Trust Fund to nonhighway projects. Every time a motorist buys a gallon of gasoline, 18.4 cents in federal tax goes to the US. Treasury. Under current law, however, only 10 cents goes into the Highway Trust Fund for highways, 1. 5 cents is earnmarked for mass transit and the remaining 6.9 cents is diverted to nonhighway programs. Amtrak advocates would like to use some of that gas tax to bail the railroad out of bankruptcy.

Despite the dismal condition of our roads and bridges, almost $18 billion sits in the Highway Trust Fund waiting to be spent. Because the fund is counted in the unified budget, some lawmakers are inclined to let that balance grow. By holding highway spending below tax revenues credited to the Trust Fund, Congress can make the federal deficit look better on paper.

Recently, the Highway Users Federation conducted focus groups around the country to talk about highways. …

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