AEIdeas

The public policy blog of the American Enterprise Institute

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Discussion: (4 comments)

  1. Joe Marinaro

    I would prefer to see an “Infrastructure Bank” set up. I would fund it with a payroll tax dedicated to infrastructure and fund the payroll tax with a corresponding reduction in the lowest marginal tax rate (currently 10%).

    This would provide a steady, dedicated funding source that all working people would contribute to. Democrat demands for progressive taxation could be assuaged by playing with the income subject to the tax (yet still keeping it revenue neutral – expand income to be assessed and lower the rate for progressive increases). Republican distaste for larger government programs could be assuaged by requirement to turn over ~90% of funding back to states on a contribution basis (reserving some for big projects that cross state lines such as ATC, grids etc.)

  2. Todd Mason

    A curious idea from Lee. The conservative leaning Tax Foundation wants the opposite: ratchet up gas taxes and tolls so that the users of highways pay for them, (and pay enough one hopes that new highways don’t open at capacity on Day One.) The foundation argues persuasively that building roads with general funds makes them free to users, and we are half way there now. , http://taxfoundation.org/article/gasoline-taxes-and-user-fees-pay-only-half-state-local-road-spending

    Yes, both taxes and tolls are regressive. But consistency is better than learning, as some did in 2006, that a new home in ruburbia is two tanks of gas/week too remote.

  3. Tom Sullivan

    About 30%of the gas tax (all 50 cents of it, US average) goes to non-road purposes – transit, sidewalk/bike paths, beautification, etc. Return that to road building solely.

  4. State and local taxes already account for 73 percent of road building funds. The federal gas tax goes almost entirely to maintaining the Interstate highway system.

    http://www.vox.com/2014/5/6/5683822/the-us-highway-funding-crisis-in-six-charts

    There is a reason for this. State’s like Montana, Wyoming, Utah and New Mexico do not have sufficient state tax revenues to maintain long stretches of interstate. Not enough people. So the feds help out there to keep transportation flowing between the eastern states and the west coast. If it were left up to the states entirely Montana might just tell the rest of the country to screw themselves and let I-90 and I-94 fall into disrepair.

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