July 19, 2005

An alternative to the gas tax

Andy Brett makes fine points in Gristmill:
I've said before that if the government is going to tax or subsidize something, there had better be a really good reason.
The majority of the federal [United States], (18.4 cents/gallon) gas tax goes to pay for federal highways. More money to federal highways pays for smoother, less congested highways that in the end lead to more driving, offsetting the effects of the increased price of gasoline.
As I agree with Andy's first statement I suggest eliminating subsidies first. Make roads private. Let private owners collect fees, build new roads and abandon unprofitable ones.

Notice that politicians have perverse incentives to build too many roads. Building roads means making news, making friends with wealthy and potentially generous contractors, and satisfying bureaucrats' hunger for big budget. And politicians do this with taxpayers' money, not their own. Private owners would think it twice before spending their money in building new roads or taking care of old ones.

So, I believe that private roads would mean less roads, worse maintained roads (on average), and more expensive and uncomfortable driving. There would be less pollution, less asphalt and less taxes.

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