General Road and Highway Discussion

[ijmorlan]

ijmorlan, I don't have a fundamental disagreement with your proposal.  But I think the big gaps are:

1. Ensuring the Government doesn't double dip.  Tax revenue should go down commensurate with the service level they're offering going down.

I agree that other tax revenue should go down, ceteris paribus; on the other hand, the government itself does not need or want tax revenue. Instead, it has programs, mostly demanded by the citizens, that require funding; whether to use the removal of a major expense (highway construction) from the general books as an opportunity to reduce taxes, pay down debt, or fund new programs is an appropriate subject for debate. Far too often I see discussions around tax that view government as “greedy” which simply makes no sense. It may make sense when talking about a for-profit business, but unless one is alleging widespread graft committed by members of government and/or civil servants, the concept of greed in government doesn’t really make sense. I will agree that many governments have a bias towards new program spending rather than tax reductions and I think I would agree with you that the default use of any “windfall” should be tax reduction or debt payment.

2. There should be some accounting for the general economic and social benefit that highways provide.  It's not just the drivers of the highway that benefit.  The Government should pony up some money for that benefit that comes out of general tax revenue (which is our 'best' way of charging society as a whole in a fair manner).

Let’s take an example: I benefit from the highways because my bread arrives on a truck that takes the highway.

OK, but I pay for the bread, and what I pay has to cover all the expenses associated with making and delivering the bread. This includes the highway used to deliver it. If the highway really provides a big enough benefit to actually be worthwhile, that should be reflected in the affordability of bread, even if the delivery truck has to pay for the road the same as they pay for every other input into the bread-providing process. Nobody says that I benefit from the ovens used to cook the bread, and therefore the general public should pay for big ovens.

The same observation applies to every other use of the roads: if something truly beneficial depends on the road, it can afford to pay for the road. If it can’t afford to pay for the road, that suggests that it is a marginal activity that possibly isn’t actually demanded sufficiently to need to exist.

The biggest objection I see to the above is essentially related to economic inequality: economically speaking, the merest whim of a billionaire (say, $100,000 worth of stuff) is worth more than an entire year of a poor person’s life (way less than $100,000 spent on all purchases, including life-necessities such as food). But even here, instead of saying that poor people should be able to use roads for free, it makes more sense to say that they should get some money for free, and they can decide whether to spend it on roads or on something else.

Essentially, the bottom line is that by providing free roads, we as a society are deciding for everybody that they will spend their money on roads. I believe in giving everybody individual choice to the greatest extent feasible, and that definitely includes deciding how much to spend on expressways.

3. There should be some accounting for the nature/purpose of the highway and its relative importance.  In your proposal it seems like we should provide some basic level of transportation 'for free'.  Between some high density areas, that basic service level may require highways.  In other cases it might not.  But I think its too simplistic to say that non-highways are ok to be funded directly by the Government but highways aren't.  It's very situational dependent.

Well, I am certain that superhighways (limited access, freeways, expressways) should be self-funding. I’m less clear on what other roads should be self-funding. I’m OK with a basic road network being free, but I’m less sure about how four-lane arterials should work. The idea is that expressways are a luxury good that makes no sense to provide for free to the user: if a use of the expressway is only economical if it doesn’t have to pay for the road, it’s not really economical. But it’s hard to imagine a world, starting from where we are, that doesn’t have local roads to every address. Also, it’s harder to toll local roads, so there is a practical component. Basic connectivity is definitely a requirement, not a luxury.

This is a bit like saying that everybody should have enough food to live, but if you want caviar, you’ll be paying for it, and it’s expected that some people won’t be able to afford caviar.