September 24, 2007

Broadening the Definition of a "Tax"

It's hardly news that American commuters spend a big chunk of their lives sitting in traffic. But a new report makes news out of this anyway:
Indianapolis-area drivers wasted 43 hours in 2005 due to rush-hour congestion, according to a study released Tuesday by the Texas Transportation Institute, which regularly rates the congestion of metropolitan areas.
There are broadly two ways of fixing this problem: build more roads, or use policy levers to get people to drive less on the most crowded roads. The latter approach means higher gas taxes, higher tolls, or a "congestion charge" of the sort New York City policymakers have been discussing for a while.

Neither of these alternatives is cost-free. Building roads costs money, which has to be raised somehow, and using taxes or tolls to raise the price of driving imposes a burden on working families. But doing nothing imposes big costs, too. As Rep. Peter DeFazio notes, "There is a tremendous cost to doing nothing." An hour sitting on a gridlocked highway is an hour you could have spent earning money--which means that gridlock imposes a real economic cost on workers and on businesses. In response to fears that a gas tax hike would impose costs on workers, one member of Congress sensibly argues that the current "do nothing" state of things amounts to a tax of sorts:
Rep. Jim Oberstar, D-Minn., who heads the House Transportation and Infrastructure Committee, said the $78 billion that travelers lost in wasted time and fuel in 2005 amounts to a "congestion tax."
And of course, he's right. The larger point to be made here is that it's a bit simplistic to argue that a gas tax hike would hurt workers or hurt the economy without taking into account the costs that the current state of things impose on workers. Anything the government does to mitigate the current problems with our transportation grid, whether it's investing more money in better roads or hiking taxes on drivers, is going to bring benefits along with the costs. It's important to measure both sides of this coin before denouncing efforts to hike the gas tax.


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