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Road taxes, road user charges and earmarking

Author

Listed:
  • David M. Newbery
  • Georgina Santos

Abstract

The UK Road Fund was set up in 1921 and financed by earmarked taxes, but was unsuccessful as a form of road finance and abandoned in 1937. The paper examines why earmarking failed and what problems arise for replacing road taxes by hypothecated road charges. These charges would need to be regulated and could evolve into a more efficient system of road pricing. The paper claims that recent experiences with regulating capital-intensive network industries make road user charging and the commercialisation of the public highway both feasible and desirable, but that recent government proposals for local earmarked taxes are inadequate.

Suggested Citation

  • David M. Newbery & Georgina Santos, 1999. "Road taxes, road user charges and earmarking," Fiscal Studies, Institute for Fiscal Studies, vol. 20(2), pages 103-132, June.
    • Handle: RePEc:ifs:fistud:v:20:y:1999:i:2:p:103-132
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    File URL: http://www.ifs.org.uk/fs/articles/0001a.pdf
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    References listed on IDEAS

    as
    1. Newbery, David M, 1987. "Road User Charges in Britain," Economic Journal, Royal Economic Society, vol. 98(390), pages 161-176, Supplemen.
    2. McCleary, William, 1991. "The Earmarking of Government Revenue: A Review of Some World Bank Experience," The World Bank Research Observer, World Bank, vol. 6(1), pages 81-104, January.
    3. Newbery, D.M. & Pollitt, M.G., 1996. "The Restructuring and Privatisation of the CEGB: Was It Worth It?," Cambridge Working Papers in Economics 9607, Faculty of Economics, University of Cambridge.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Yulia V. Leontyeva & Igor A. Mayburov, 2016. "Theoretical framework for building optimal transport taxation system," Journal of Tax Reform, Graduate School of Economics and Management, Ural Federal University, vol. 2(3), pages 193-207.
    2. Proost, Stef & Van Dender, Kurt, 2004. "7. Marginal Social Cost Pricing For All Transport Modes And The Effects Of Modal Budget Constraints," Research in Transportation Economics, Elsevier, vol. 9(1), pages 159-177, January.
    3. Santos, G. & Rojey, L. & Newbery, D.M., 2000. "The Environmental Benefits from Road Pricing," Cambridge Working Papers in Economics 0020, Faculty of Economics, University of Cambridge.
    4. Robin Lindsey, 2006. "Do Economists Reach A Conclusion on Road Pricing? The Intellectual History of an Idea," Econ Journal Watch, Econ Journal Watch, vol. 3(2), pages 292-379, May.
    5. Santos, Georgina & Behrendt, Hannah & Maconi, Laura & Shirvani, Tara & Teytelboym, Alexander, 2010. "Part I: Externalities and economic policies in road transport," Research in Transportation Economics, Elsevier, vol. 28(1), pages 2-45.
    6. Peter Forsyth, 2000. "Microeconomic Policies and Structural Change," RBA Annual Conference Volume (Discontinued), in: David Gruen & Sona Shrestha (ed.),The Australian Economy in the 1990s, Reserve Bank of Australia.
    7. repec:eid:wpaper:02/10 is not listed on IDEAS
    8. Amihai Glazer & Stef Proost, 2007. "Earmarking: Bundling to Signal Quality," Working Papers 060713, University of California-Irvine, Department of Economics.
    9. Clifford Winston, 2000. "Government Failure in Urban Transportation," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 403-425, December.
    10. Bingyuang Hsiung, 2001. "A Note on Earmarked Taxes," Public Finance Review, , vol. 29(3), pages 223-232, May.
    11. Bruce Morley, 2012. "Empirical evidence on the effectiveness of environmental taxes," Applied Economics Letters, Taylor & Francis Journals, vol. 19(18), pages 1817-1820, December.
    12. Santos, Georgina, 2017. "Road fuel taxes in Europe: Do they internalize road transport externalities?," Transport Policy, Elsevier, vol. 53(C), pages 120-134.
    13. Jonathan Leape, 2006. "The London Congestion Charge," Journal of Economic Perspectives, American Economic Association, vol. 20(4), pages 157-176, Fall.
    14. Lindsey, Robin, 2012. "Road pricing and investment," Economics of Transportation, Elsevier, vol. 1(1), pages 49-63.
    15. Georgina Santos & Laurent Rojey, 2004. "Distributional impacts of road pricing: The truth behind the myth," Transportation, Springer, vol. 31(1), pages 21-42, February.

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    More about this item

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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