Who Pays? Tolls, ‘Lexus Lanes’, and ‘Sin Taxes’

I prefer the gas tax to tolls. While the gasoline tax is also essentially a ‘user fee’, at least it is somewhat fair — people who drive larger vehicles — trucks, RVs, and SUVs — (not to mention dump trucks and semis) pay more per mile, those who drive fuel-efficient vehicles pay less.There are still problems with the fuel tax however:

1) Lower income people cannot always drive fuel-efficient cars. In fact often they have no choice but to drive an old ‘beater’ that gets 15 mpg, because they are inexpensive to purchase.
2) Lower income people cannot always live close to where they work. It is common for real estate prices and rent to be much higher near employment centers. So the working poor must drive further.
3) Many people that drive pickup trucks and large SUVs do not _need_ them, they just like the image they believe they project and/or the idea that they _could_ go off-road if they wanted too (or something). That said, some people (farmers, ranchers, construction workers, large families) really must drive trucks and larger vehicles over long distances. Most of them aren’t exactly in the “1%”.

So while the gas tax might seem pretty fair at first glance, it ends up being cruelly regressive in many cases.

Of course, that could be resolved through the tax code (credits or deductions for fuel tax paid over a certain % of income or whatever).

Tolls on the other hand are a blatantly regressive user fee. Especially HOT Lanes (aka “Lexus Lanes). The cost per mile is purposely set high enough to discourage the ‘riff-raff’, and keep traffic flowing at a guaranteed (well, sort of) minimum speed. The price is varied in real-time to adjust the volume of traffic. Costs can be as much as $2 per mile!! So the well-healed can just buy their way out of traffic jams while everyone else sits in the regular lanes and sucks exhaust fumes. This takes pressure off the local and state politicians to do road and bridge improvements, because their big donors are happy with the current situation — they aren’t stuck in traffic day after day with the rest of us. “Traffic congestion? Where?”

Even regular tolls are very regressive. Last year my wife and I figured out that the tolls from Sycamore, IL, (west of Chicago) to our place near Hagerstown, MD, would add up to over $40! $40, for the ‘privilege’ of driving on a road that looks suspiciously like I-70 a little further south — or any number of other non-toll Interstates all over the country. There might be a reasonable argument for having users of a particularly expensive bridge or tunnel pay a nominal fee, but I-80/90 had to be one of the easiest, least expensive Interstates to construct — arrow straight across flat corn and soybean fields! What’s up with that? Contrast I-80/90 with the PA Turnpike (I-76) through all of the mountains in Pennsylvania. I still don’t think that should be a toll road, but at least it is a bit more justifiable.

If I-76/80/90 were smooth and well maintained, and the speed limits were set at a reasonable level in rural areas, then it would remove a bit of the sting, but as it is they are often rough, under construction, prone to delays, and have predatory traffic enforcement. I’ve never been stopped on a toll road [IIRC] but the truckers all talk about how the troopers in Ohio will write them up for literally 1-2 mph over the 55 mph truck limit. “Welcome to the Buckeye State!!”

When we were at a relative’s house in IL recently we broke down and bought the evil little I-Pass box that allows the NSA to track your every move. We figured we’d be on toll roads around Chicago and having the transponder is easier and less expensive than paying cash. It is supposed to be compatible with the system used in the Mid-Atlantic region and in the Northeast — “EZ-Pass”. We ended up using it just once for just a short section of I-80/294 south of Chicago. When we went to exit the Indiana Toll Road (I-80/90) at Fort Wayne the EZ-Pass system would not recognize our transponder and we were trapped like rats. A gate down in front of us and vehicles (including a semi) lined up behind. Luckily, when I got out and asked the two drivers behind us to back up they did (one grudgingly with dirty looks, the semi driver very nicely) and we were able to swing around to the cash lane where the lady confirmed that our I-PASS transponder wasn’t working in Indiana yet, and said I owed her $3 cash (twice the I-PASS/EZ-Pass amount). Other drivers seemed to be having trouble also, there may have been something else going on. Off to a great start!

So, to review — we give IL lots of money ($50) for the little box — $40 goes towards tolls, $10 is a “deposit”. They require that I register their transponder and our vehicle(s) and enter credit card and driver’s license info (etc) online (how much will you give me if I…). Then, by the magic of electricity, the box gets activated in IL almost immediately (good), but takes “24 to 48 hours” to be recognized in other states (bad). Do they have someone manually transferring all of the data from the I-PASS system to EZ-Pass? Seriously — anyone have any idea what the deal is there? An email can be sent from the US to India and arrive in less than a minute (usually seconds), but the states’ computer systems can’t communicate with each other in less than a day or two — even when it’s to their advantage?

Luckily we weren’t hauled off to jail for ‘attempted unauthorized use of a foreign transponder’ and we went on our way.

We haven’t used the box since. I’m sure we will though, so as not to cut off our noses to spite our faces…

Back to my point — tolls are regressive user fees and should be banned. All highway infrastructure should be paid for with the fuel tax — with tax credits for lower income people.

What I’ve found with user fees is that many/most of those who aren’t affected by a particular fee or toll think it’s great. Especially if it’s for something they don’t approve of. After all, they don’t have to pay the fee. “Let the bastards that go to that park or use that road pay! Hoo-rah!!” For example, some folks like trains and hate cars and semis (since they take money from the railroads). Some of them suggest that the price of fuel be doubled or tripled. When it is pointed out that doing so would harm many people (not to mention crashing the economy) they generally don’t seem too concerned.

That’s just human nature I suppose. We all want what’s best for our families, friends, and ourselves. Anything that involves _others_ paying more fees or taxes is hard to get worked up about. In fact, any additional user fees or taxes that are paid by others lower our tax burden. Ka-ching!!

“$45 to get into some national parks (that’s what it is now BTW)? Who cares? I’ll never visit them…” That’s pretty much the attitude. It’s all about _me_!

If that thinking were that taken to it’s logical conclusion we’d have pure libertarianism. No public parks, schools, roads, libraries, forests, etc. Everything would be paid for with user fees. Take public schools. Those of us that don’t have kids would not have to pay. My wife and I would see our property tax cut in half. Of course we’d have a lot more ignorant rednecks running around but we could build a fence around our property to keep them out with the money we’d save! Sweet deal (not).

We can all point to things the government does that we don’t like and/or don’t benefit from (not directly anyway). If everyone started demanding that all services be funded with user fees our system of government would fall apart.

Tolls should be eliminated. Raise the motor fuel tax if necessary and give lower income folks a tax break. Make the 1% share their special Lexus lanes with the rest of us — after all, most of them are just converted regular lanes that were originally built on a public right-of-way with tax dollars.

If a corporation wants to build a road from scratch, with absolutely NO taxpayer dollars (or TIFs, etc), then they can do what they want. Charge what the market will bear. But not with public land and/or money.
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When are user fees are appropriate? What percentage of total costs should they cover?We all benefit from roads. Even those who don’t drive purchase goods delivered by trucks using public roads. Buses and taxis use public roads. So do bicycles. The elderly and home-bound depend on caregivers who use public roads to get to them. Emergency personnel (police, fire) depend on public roads to reach those in need. I think an argument could be made that the cost of our highway system should be paid from general revenues, at least in part — along with the fuel tax and fees paid by trucking companies (which would of course just be passed on to most of us).

User fees do not have to be an all-or-nothing proposition. They can of course be set to cover any percentage of the cost.

I wonder though, why should roads, parks, libraries, and schools (for example) be treated differently?

The idea of people “paying their own way” has obvious appeal, yet it obviously cannot be applied to our social safety net. It would be difficult at best to apply it to public schools, or parks, or libraries (etc).

With schools and libraries we have apparently decided that those who use them, who benefit directly from them, should not have to pay at all (no more than other taxpayers anyway).

IIRC, parks used to be free, or nearly so. Now even state parks charge a substantial entry fee, and some national parks (Bryce, Zion) are up to $45. So I guess we’ve decided that parks do not provide quite as much public benefit as schools. Government has decided that they’ll kick in some percentage of the operating costs, but those who want to use the parks must pay — regardless of their income. $45 is a lot of money to most folks, including my wife and I. Should people have to pay that much to enter a national park? Should the fee at least be means tested? How would that work? Or would it be easier to simply pay for parks from general revenues?

At Mount Rushmore, my wife & I were required to pay $12 for “parking”. If they had called it an entrance fee our (expensive) annual pass would have gotten us in for free, so instead it’s called a “parking fee” that goes to the _corporation_ that runs the freakin’ parking lot! How messed up is that?!

Then there are the state and federal highways. If I understand correctly, they are (or were historically) 100% paid for by the fuel tax and tolls. So people who do not drive (or do not purchase fuel anyway) do not pay a dime toward construction and maintenance of the roads that they benefit from. $0. Granted, users benefit more, but it seems to me that at least some portion of the cost should be paid from general revenues. All Americans benefit from having a good highway system.

I don’t mind being asked to pay a fee toward the cost of government services that we use, but if that is to be the case, then I think it’s reasonable to expect that others pay the same percentage of the cost of the services they (or their children) use.

Or, we could eliminate all user fees for everyone.

As it is, on top of the user fees, my wife and I are paying for a lot of services that we’ve never used and never will use. Some are very beneficial, others not so much.

We all have to pay for some stuff we don’t like and/or will never use. That’s the nature of our system.

In short, user fees are a slippery slope. Take the voucher issue. Some people without children say that if those _with_ children are to get vouchers (essentially a refund of what they pay toward the school system via property tax) when they pull their kids out of public school, then they (the people without children or without school age kids) should also get a refund. I fully support our public schools and would hope that none of the above comes to pass, but I think that is a valid (if short-sighted) point.

There are many others, but you get the idea. If everyone were able to decide which programs/agencies/services to fund and how much to allocate to them, a lot of the good that government does would be gone.

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How to go about deciding who pays, and how much they pay, for any given government service is very tough.Much would rest on the question, “How much do we all benefit as a society and how much does the individual or group benefit?”

Of course, even if the individual/group benefits tremendously, they may not be able to pay what might be considered their ‘fair’ (or proportionate) share.

Some might say that since Americans have decided that primary and secondary education is of such great benefit to all citizens that we should all pay for it (regardless of the number of school-age kids we have) — it follows that college education should be free (to the students) as well. That all education, through graduate school, should be paid for by all taxpayers.

A related issue is the costs the state incurs as a direct result of the (often reckless) behavior of individuals. People who go rock climbing without proper equipment, fall, and must be airlifted out; those who set off into the wilderness without a GPS navigation device, map, or compass, get lost, and must be rescued; drivers who attempt to drive through flood water and get swept away and must be saved — often risking the lives of their rescuers; etc. I’ve heard that some states are now charging people for the cost of their rescue. Or they charge a fee that covers some of the cost.

Then there are the “sin” taxes on alcohol and tobacco. The typical reason given for them is that they cover the costs to society that are associated with the use of those (legal) products, and can discourage use by making those products more expensive. To the extent these taxes simply cover actual costs, then they might be considered a ‘user fee’ of sorts. Beyond that, I have a hard time supporting any punitive or behavioral modification goals. The libertarian part of me thinks that everything should be legal, that people should be free to make their own choices, and be expected to pay their own way. Since we know that many alcoholics, tobacco users, and/or drug addicts will never be able to cover the medical and societal costs of their behavior, the socialist part of me says, “Ok, go ahead and tax them, but only to cover actual costs”.

This elephant in the room has been brought up many times before, but why aren’t we taxing sweet grease and salty grease? I read that _obesity_ is now our #1 health problem in America — not alcohol, tobacco, or illegal drugs. Whether junk food is taxed just enough to cover the increased medical expenses, or whether there is an extra ‘social engineering’ fee added in there as well, if we are to be consistent, shouldn’t we tax unhealthy food and drinks? My wife & I were looking at a jug of Arizona Green Tea that a friend had left at our house. What could be better for you, right? Green tea with yummy organic honey! Mmm, mmm! Turns out the second ingredient is high fructose corn syrup — way down the list we found the honey. I’d slap a big ol’ tax on that tea if I were supreme ruler (aka “Dear Leader”).

Of course, if we agree that using taxes to recover costs (and perhaps to modify behavior) is a good thing, then in addition to taxing junk food shouldn’t we also be going after all types of dangerous behavior that might result in death or serious, permanently crippling, injury — potentially costing taxpayers billions of dollars? How about: hang gliding, sky diving, bungee jumping, cliff diving, rock climbing, scuba diving, riding motorcycles and/or bicycles (even _with_ a helmet), snow skiing, water skiing, riding in hot air balloons, riding horses, all forms of contact sports, etc, etc? I say we tax them into oblivion! Seriously though, if at least a portion of the reason we have sin taxes is to recover the costs of elective, voluntary, pre-meditated behavior (i.e., not routine accidents) then shouldn’t the above — and more — be taxed as well?

I believe the difference in how we handle the above is due to:

a) How the behaviors are perceived. Some, like football, are revered with a religious fervor. Suggesting that we tax the NFL, teams, college and high school athletic depts., and players to recover the medical costs would be blasphemy. “How DARE you suggest that we pay our own way?! This is FOOTBALL!!” Others, like smoking and drinking are just bad habits. Never mind that both result in enormous medical bills (granted, the costs due to football and other sports injuries is much lower, but still…).

b) Whose ox is gored. Only about 25% of American adults smoke (not sure about chewing tobacco use). So any proposal that involves taxing the hell out of tobacco products meets with little resistance. When it comes to Whoppers, fries, pizza, and shakes though — that’s a different story. Now your talking about stuff that the vast majority of Americans are addicted to. “Don’t mess with my fries you commie bastard!!”

Back to roads…

My understanding is that there’s a federal program whereby the federal portion of the fuel taxes is collected by the IRS and re-distributed to the states. That seems fair to me — even though my home state, MD, is a net ‘loser’ and WY (for example) is a net ‘winner’. The thinking (I assume) is that we all benefit from having an Interstate highway system that is as consistent as possible. If each state were required to maintain all of the roads within their borders, some would be flush with cash — not a pothole in sight — and for others it would be impossible. WY and other large, sparsely populated western states simply could not generate the revenue necessary to do proper maintenance. It seems inconsistent to support that federal program while demanding that others pay 100% of the costs of building and maintaining the roads they use.

Take Chicago area residents for example. Why should they have to pay exorbitant tolls everywhere they go — on top of the fuel tax that we all pay?

Same for much of the Northeast, particularly the NYC area.

Why are some roads toll roads and others not? What’s the difference between one stretch of I-95 in MD and another (a small segment of I-95 in MD is a toll road)? What’s the difference between I-70 and I-80/90 — both crossing Ohio and Indiana parallel to each other? How about I-68 through the Appalachians in MD and I-76 up in PA (the PA turnpike) going through the same mountains?

What about bridges and tunnels? Why do some people have to pay huge fees to cross a bridge or travel through a tunnel when other similar (perhaps even more expensive) bridges & tunnels are ‘free’ (no toll)? The Chesapeake Bay Bridge Tunnel (not the Bay Bridge east of D.C.) costs from $12 to $140!:
http://www.cbbt.com/schedule.html

The Bay Bridge (to Ocean City, MD) is now $4 to $45 and will soon go up to $6 to $60:
http://www.mdta.maryland.gov/Toll_Rates/Bay_Bridge_Rates.html

Others are free. Why?

I’ll wind down here, but I do think that most highway infrastructure costs should be shared equally. If not by all Americans, then by all of the citizens of the particular state. If not by all, then by a combination of fuel tax and general revenue. At a minimum, the costs should be covered by the fuel tax. There should be no tolls — they are regressive, unfair, and divisive. The only “tolls” should be paid to the owner/operator of a completely, 100%, private roadway, bridge, or tunnel — not a road that was turned over to some corporation by corrupt politicians, but a road that was built entirely at the expense of a private company — land acquisition, surveying, engineering, construction, and maintenance. Only then should tolls/fees be allowed. All other roads are public property and the cost should be distributed evenly. The current patchwork system is blatantly unfair to those living areas where they must pay both tolls and fuel tax.

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