Prices send signals and taxes can influence behavior. So what are we to make of a proposal like this?
…the American Association of State Highway and Transportation Officials (AASHTO) last month submitted a detailed $544 billion transportation re-authorization proposal designed to encourage the new administration to shore-up the domestic economy with heavy spending on infrastructure projects.
The new programs would be paid for with massive new tax hikes, including a per-mile driving tax that would begin with “proof of concept” trials as early as 2010. The tax would initially be one cent per mile to generate an estimated $32.4b a year. An extra one cent per gallon in the federal gasoline tax would generate another $1.8b, and a national sales tax on cars of one percent would generate $7.6b.
Now that’s real money. But let’s stop for a moment and ask: if such an idea, in whole or in pieces, is adopted by the new administration, what would its effect be upon entities like VDOT?
I suppose, considering that the idea has been floated by the association representing road builders like VDOT, that they have taken into account the distortions such national taxes might impose on their local funding mechanisms. At least one would hope so.