Thursday, August 18, 2016

Let Them Eat HOV Lanes

Others have probably mentioned this already somewhere, but I don't remember seeing it: the current round of toll-road construction in the United States is a form of regressive taxation and thus contributes to economic inequality. With the amount of this type of construction and with the current emphasis in some circles on economic inequality, I'm surprised that I'm not seeing this point being made.

States give money for construction, or at least preferential treatment to the private firms that will operate the roads. (Granting of state favors is the bestowal of state resources just the same as cash handouts.) Then the roads are inordinately accessed by upper-income users. This is ensured in the variable-pricing set-ups most of these new toll roads use: when the road is most desirable, that's when it's accessible to the smallest group of well-off users.

Maybe the revenue from the roads goes into the general fund and helps the disadvantaged (I seriously doubt it, but it's possible). If so, isn't this just about the most round-about way of taxing rich people ever devised?

A second tax is from the construction delays. The poor are inconvenienced by the construction process and then don't get the benefit. "They get a less-congested road when the rich pay the tolls." I don't think so. When the regular road is uncongested, no one pays the toll and things are as they were. When the regular road is congested, if enough users are moving to the toll lanes to relieve the congestion, that's an indication that the variable toll is too low. The toll should be set such that the regular road stays congested enough to make it worth your while to pay the toll. So these won't relieve congestion, they will just make it chronic.

I'm not sure how I feel about the focus on economic inequality. I suspect that most of the discussion points (and nearly all of the recommended remedies) are bogus. But for people who live and breathe this stuff to not talk about it seems fishy. If I had to guess why we don't see it, I'd say because the professional hand-wringers are the ones benefiting from the transfer.

1 comment:

Alanna said...

YES!!! This is what I've been saying, except you back up your opinions with actual economics knowledge (and the big words that go with it). The toll roads that have been built recently make me so angry, the entire system seems to unfair!