Gas Taxes – Held Up Without a Gun

A decade or so ago, the hue and cry over SUVs (“urban assault vehicles”) finally forced Ford and other auto companies who buried their patents for electric vehicles in their vaults in the early 20th century to pull them out.

Competition from foreign electric vehicle makers impelled American automakers to start manufacturing hybrid and electric vehicles. Now there are even hybrid buses on city streets.

But while this trend may reduce greenhouse gases and global warming, what about more obvious problems related to cars, such as traffic congestion, accidents, and the disparate gas tax-rate impact on different socio-economic groups of Americans?

Let’s start with federal gasoline taxes

In 2015 The [San Jose] Mercury News wrote that in California, the lead state in creating lower pollution vehicles, that about 85 percent of federal gas tax goes to highways and 15 percent percent for public transit.

The state got around $5 billion and spent 57 percent on highways, 36 percent on roads, and 7 percent on public transportation.

Nevertheless potholes are the number one problem in this rainy season state. The cost in blown tires, suspension systems and our backs to car owners comes out of our own pockets.

In addition, government subsidies out of local and federal taxpayer monies go to businesses such as Whole Foods when they do not pay employees enough to be able to live near the place where they work.

This impels workers to commute (currently in older gas powered vehicles) long distances—up to as many as two or more hours each way to get to work.

Not only do these long commutes by more and more cars create more pollution, they also tear up highways and streets. And each year traffic congestion grows worse.

The Mercury News even advised long-distance commuters to avoid the slow lanes on federal Highway 580 where “trucks have chewed up the freeway”.

Paying for other people’s bad

Externalities

Externalities is the term used when individuals or socio-economic groups such as corporations or industry sectors, like the trucking industry, a sector that’s now allowed to put giant-size trucks on our roads, do damage that other people or groups wind up paying for.

Professor Gordon Tullock’s example of externalities in the 1970s was a new resident building a house on a hillside and putting in trees that grew up to block a neighbor’s view. In this case there is no real remedy for the loss of that neighbor’s pleasure in the view out their window.

These days, giant chain box stores like Walmart, Whole Foods (now under Amazon ownership), Sutter and Kaiser Permanente hospital systems, and Silicon Valley firms like Facebook and Google all profit from the gas and state income taxes that the rest of us pay every year for the damage done to our streets.

The costs of fixing road and street destruction are hidden inside the state’s income taxes. A few years ago when I researched it, road damage cost the average citizen of California $500 in state income tax each year.

This invisible tax is why the recent spate of “pay-rate envy” that wrought huge anger towards the private buses that Google and other tech corporations use to transport their employees to work in San Francisco was not warranted. This was actually a helpful move that reduced pollution, traffic congestion, and road damage.

And Google’s bus-employees-to-work program saves all of us money who pay gas taxes for road repair.

Rent-seeking

Another term Mr. Tullock popularized back in the 1970s  is the highly misleading phrase “rent-seeking”. This has nothing to do with tenants and landlords. The layman’s language for this practice is “corporate welfare”.

Rents are payments. Rent-seeking refers to payments made to individuals, corporations or non-profits seeking subsidies from our local, state, and federal governments. This kind of rent isn’t paid by tenants—these rents are paid by taxpayers.

For example, think of Tom Price and other Trump administration appointees in the news recently for use of taxpayer money for renting private jets or traveling on military planes.

Or think of individuals or corporations for whom tax loopholes allow them to pay zero to ten percent income tax while the rest of us, in particular the self-employed, retirees on Social Security, and minimum wage workers pay higher rates than the rich.

Public transport and economic justice

So I ask you – Why shouldn’t all large corporations be required to subsidize the public transportation that enables their employees to get to work? Preferably with electric or solar powered vans or buses or trains.

Why should Trump appointees be allowed to pillage taxpayer coffers for luxuries like riding on military planes for free? Or wealthy people like Donald Trump pay no income tax at all?

Why is 90% of California gas tax going to pay for roads, streets, and highways, which are all still pocked full of huge potholes (for which I just had to pay $100 for a new tire)—while only ten percent goes to public transportation?

Why do gasoline taxes collected in California at 18.4 cents per gallon, and as of today even more, go to the federal government?

A federal government that is now dead set against the use of low-cost solar and electric energy?

A federal government that refuses to use our money for building high speed trains to cut down on pollution and traffic congestion in this heavily-populated state?

A federal government that shares an antiquated rail system tracks with shipping companies so that its trains never arrive when scheduled? And leaves passengers to die because the equipment and tracks are too old?

A  federal government with a President that would have us go back to coal-burning trains again if he could?

Why? Why? Why? Why?

Next time: An Equitable Regional Public Transportation