There are many reasons to be appalled at the latest crop of proposals to raise taxes for transportation improvements, but the one that is making me irritable at the moment is the total absence of economic thinking. Both Gov. Timothy M. Kaine and Senate Finance Chair John Chichester have submitted proposals that would raise roughly $1 billion a year — but neither one wants to do it by increasing the gasoline tax. House Republicans don’t want to raise your taxes, just divert General Fund money to transportation spending, but their thinking displays an equal deficit in economic understanding.
The strategy consists of the following: raise revenue from other sources, the more hidden to the taxpayer the better. The idea is to fleece the taxpayer while causing as little squawking as possible.
This is bad policy. If you must raise taxes, then put the burden squarely on the gas tax where it belongs. Make the tax as close to a user fee as you possibly can. At least with a gas tax there is a direct correlation — not a perfect one, but a strong one — between the amount of wear and tear a motorist causes on the transportation system, how much he drives, how many gallons of gasoline he consumes, and how much he pays in taxes. At least raising the gasoline tax encourages people to try to find ways to drive less, thus reducing the stress, at least marginally, on the transportation system.
But apparently this elementary economic concept is alien to our lawmakers. Kaine and Chichester would prefer to raise the sales tax on automobiles. Presumably that would be less objectionable to voters because they could finance their tax payment, along with their car payment, over four or five years! Unfortunately, the same tax rate would apply whether the buyer is a 70-year-old granny who drives 6,000 miles a year or a road warrior who drives 30,000.
That kind of thinking will only keep Virginia on a treadmill: Build more roads to relieve congestion, but do nothing to discourage the relentless increase in Vehicle Miles Driven that causes the congestion in the first place.
(Note: I have revised this post to eliminate ad hominem attacks that I made in a fit of severe grumpiness.)
