General Road and Highway Discussion

[KevinL]

Do they have some kind of phobia of painting concrete?

[danbrotherston]

@viewfromthe42. I agree they should but if they are confused about how to go straight the safe thing to do is to turn right. Many drivers won't do this.

[Canard]

Do they have some kind of phobia of painting concrete?

No, but they won't do it until final pavement is down. Why? Because if they did it with the first layer, then when the second layer goes down, they'd have to match it up with the marks on the concrete (since it remains) and it becomes very difficult.

[KevinL]

Do they have some kind of phobia of painting concrete?

No, but they won't do it until final pavement is down. Why? Because if they did it with the first layer, then when the second layer goes down, they'd have to match it up with the marks on the concrete (since it remains) and it becomes very difficult.

I'm referring to places that now do have final pavement.

[Canard]

I guess so then.

[Bob_McBob]

Opinion piece in the Kitchener Post today:

Car drivers get more subsidies than transit users

[p2ee]

Opinion piece in the Kitchener Post today:

Car drivers get more subsidies than transit users

Couple things I'd like to add:

1)  It's naive to use the toll rates for a privately owned for-profit highway as the benchmark for what a tolled road would cost. The toll rates on 407 includes profits for the 407 ETR company -- after all, it has investors -- which is why the toll are so astronomically high. In 2015 (link) they made 223 million profit on 888 million revenue.  Comparable toll roads in the US on roads that experience similar maintenance and similar wear and tear (including due to the weather) are significantly cheaper.  The tolls on the new provincially owned section of the 407 is also meant to generate a profit to be invested in infrastructure elsewhere.   
2)  Every time a car is sold and then re-sold, there is the HST that has to be paid.  A cheaper new car with $20,000 value generates $2600 in taxes, not to mention the taxes generated on the re-sales.  That tax revenue is not being considered and is probably at least $500 a year on average.

[danbrotherston]

Nice opinion piece, slightly oversimplified (the 407 costs vastly more to build and maintain than a residential street, AND the company building it is making gobs of profit), but transportation is one of the most complex systems in our society with huge impact on our way of life that make it extremely hard to cost out. But the bottom line is the same, drivers are enormously subsidized.

[MidTowner]

p2ee, which U.S. highways do you have in mind? A lot of turnpikes in the U.S. do charge tolls, and you're right that they're low, but the tolls do not cover the entire cost of the highway. Some have tolls set to cover maintenance, but not the capital costs of the highway.

Thanks for the info on 407 ETR profit. Doesn't that suggest that, were the tolls 25% lower, they would cover the cost of the highway? That level would still be rather higher than tolls in the U.S.

[danbrotherston]

Additionally, a number of toll roads have repeatedly gone bankrupt, or had the state bail them out rather than raise tolls to cover maintenance costs.

As for GST on cars, that is a sales tax, not a road use fee.  If I instead bought a bicycle and then also went to the movies, I'd still pay that same tax, so it in no way contributes to roads.  Same for the GST applied to gas.  Only the fuel excise tax is a fee in excess of the standard sales tax we already pay.

[tomh009]

2)  Every time a car is sold and then re-sold, there is the HST that has to be paid.  A cheaper new car with $20,000 value generates $2600 in taxes, not to mention the taxes generated on the re-sales.  That tax revenue is not being considered and is probably at least $500 a year on average.

As Dan points out, this is a sales tax so not really relevant.  In addition, you pay it only on the incremental value of the purchase ($20K new car with a $10K trade-in generates only $1300 in sales tax).

[p2ee]

p2ee, which U.S. highways do you have in mind? A lot of turnpikes in the U.S. do charge tolls, and you're right that they're low, but the tolls do not cover the entire cost of the highway. Some have tolls set to cover maintenance, but not the capital costs of the highway.

Thanks for the info on 407 ETR profit. Doesn't that suggest that, were the tolls 25% lower, they would cover the cost of the highway? That level would still be rather higher than tolls in the U.S.

I am thinking of the Illinois tollway, which is almost entirely self-funded, including their capital costs.   Here's an accounting of their 2017 year.  Page 44 has the high level accounting.  I just calculated a 90 km trip on that network would cost me about $3.75 USD.  I'd be looking at about 4 times as much cost on the 407.

But more than comparison to the US, it's just overly simplistic to compare the tolls on a for-profit highway owned by a foreign company as cost of maintaining road, and as danbrotherston already mentioned maintaining city and local roads is significantly cheaper than highway.  The 25% lower tolls wouldn't just cut it to eliminate the profit - they have to pay private sector salaries to executives which likely run into millions per year per executive. 

Speaking of capital costs, I'd be interested to know if the subsidy described in that opinion piece covers capital costs for transit or just maintenance.  The math for vehicular subsidies seems a bit more thorough (albeit naive in terms of actual costs) than the math for transit subsidies.

[p2ee]

Additionally, a number of toll roads have repeatedly gone bankrupt, or had the state bail them out rather than raise tolls to cover maintenance costs.

As for GST on cars, that is a sales tax, not a road use fee.  If I instead bought a bicycle and then also went to the movies, I'd still pay that same tax, so it in no way contributes to roads.  Same for the GST applied to gas.  Only the fuel excise tax is a fee in excess of the standard sales tax we already pay.

The opinion piece mentioned that vehicle drivers are subsidised heavily by taxes.  The sales tax on vehicle purchases is going to the government as tax, later to be used as subsidies, and that tax is no small amount.  The revenue generated from those taxes would not exist if the vehicles were not purchased.  So why should it be excluded?  I understand it is not 'road use tax' per say, but we're talking about drivers getting subsidised by the state.  And the fact that HST on the gas is not being included is even worse.  Why should that not be included?

2)  Every time a car is sold and then re-sold, there is the HST that has to be paid.  A cheaper new car with $20,000 value generates $2600 in taxes, not to mention the taxes generated on the re-sales.  That tax revenue is not being considered and is probably at least $500 a year on average.

As Dan points out, this is a sales tax so not really relevant.  In addition, you pay it only on the incremental value of the purchase ($20K new car with a $10K trade-in generates only $1300 in sales tax).

Mentioned above, I don't see how it's not relevant.  And yes it's only paid on the incremental value, so a $20k car would initially generate 2600 in taxes and then 1300 when it's sold at a market value of 10k.

[SammyOES2]

Oh we're back to the silly argument where a lot of people pay a bunch of money for roads, but we don't count that money because that's in their role as "tax payer" and not as their role of "car driver". Maybe that explains those times when I just can't get to sleep. I bet "tax payer" me is just really angry at "road user" me because "tax payer" me is so heavily subsidizing "road user" me.

[SammyOES2]

Also, for the tax argument, we almost always associate the tax paid on something as an economic consequence of that activity.  It's not perfect, but its generally the most reasonable thing to do.  So when people just discount tax revenue related to spending on transportation because its a general tax and not a transportation tax, its kind of silly imo.