Wednesday, January 9, 2013

Selling Taxes

Virginia Governor is pushing for a repeal of gas taxes to be covered by a rise in sales taxes.  This is covered a few ways by the DMN, none worth reading, but you can find them if you so want.  That is, unless you really enjoy a condescending tone towards "Granny" and presumably anybody else that doesn't or can't drive.  Since gasoline taxes are intended as a form of user fees to help roads pay for themselves (which they don't fully), and Granny doesn't drive, why should Granny pay for others to drive.  That would make a lot of sense, if the writer than didn't super cleverly 'pull a fast one' and say everything else Granny needs is tied to roads.

I have no idea what the purpose of including this to the article was, considering the article wasn't about no longer funding roads, but funding in different ways.  Robbing Peter to pay Paul.  All it accomplished was announcing a lack of understanding that dependence on cars and roads is a problem.  But otherwise, yes.  Infrastructure must be funded.  And we have too much of it and too much burdensome infrastructure on top of it.  There is the real issue.  That might be too complicated.

Assuming for the moment the Governor's intentions are not a way to circumvent gas taxes often being dedicated to roads and roads only and generate the necessary money for infrastructure through a general fund which can be used in a broader spectrum of solutions to the real problems.  That might be interesting, but it would also be worrisome if those weren't the intentions of an ever changing leadership.  The benevolent dictator is the best form of governance only until that dictator steps down.  What's next?  And are actually a way to fund a legitimate problem, dwindling money for roads and too many roads, within the context that he doesn't understand that we are horrifically over-infrastructured and incredibly inefficient in the design of this infrastructural networks, ie grids are empty and disconnected while highways become increasingly choked.

The Governor of Virginia's worry is that with more fuel-efficient cars, people will be buying less gas therefore the money has to be found somewhere.  Oddly, the state of VA taxes alternative fuel vehicles to also cover this gap.  This tells you they clearly don't get the crux of the problem since there goal is more infrastructure for more driving, not efficiency of movement, resource allocation, and the spatial relationship of the economy.  They just want more money and more roads.  VDOT must be in his ear.

Let's think about what will actually happen if gas taxes were dropped and shifted as a revenue source over to sales taxes (isn't buying gas effectively a sale?).  Let's also assume this isn't an effort to jumpstart spending by moving revenue generation from a captive market (coerced driving) to something more discretionary, general sales.  That makes a lot of sense theoretically and politically, but it doesn't do the job of covering the funding gap since discretionary spending suffers from dynamic fluctuations.  Cities and states dependent upon sales taxes were rocked by the recent discretion.  How would this be better and more dependable?  Again, only in  the terribly misguided context of 'build more road capacity!'

Furthermore, dropping gas prices would very likely increase driving.  By increasing driving, you increase the demand load, ie stress, on the infrastructure that is already under so much stress as to reach the breaking point.  Ultimately, these are fairly complex issues politically and economically, even if we had all the information from the governor's office to know their thought process.  What really matters most is whether the public has confidence in their elected leadership and whether the governor and his DOT actually understand the real issues.  Unfortunately, I suspect the answer is no to both questions.

The only way it makes sense is if the revenue generation was put towards reducing automobile dependence, but it surely isn't.  If that was the real goal, we'd just shift the funds from gas taxes to these alternatives the way London does with their congestion charge.  But London actually has a plan and a purpose it is working towards.  A more enlightened one than "more money, more growth, more of the same, more stupidity."