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Do Motor-Vehicle Users in the US Pay Their Way?

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  • Delucchi, Mark
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    Abstract

    Governments in the US spend over a hundred billion dollars per year to build and maintain roads and provide a variety of services for motor-vehicle users. To pay for these infrastructure and services governments collect revenue from a variety of taxes and fees. The basic objective of this paper is to compare these government expenditures with the corresponding user tax and fee payments in the US. At the outset I argue that the such comparisons tell us something about the equity but not necessarily the economic efficiency of highway financing. I then present four different ways one might tally up government expenditures and user payments, depending on the extent to which one wishes to count ‘‘indirect’’ expenditures (e.g., on prosecuting car thieves) and non-targeted general-tax payments (e.g., severance taxes on oil). I make a comprehensive analysis of all possible expenditures and payments, and then compare them according to three of the four ways of counting expenditures and payments. The analysis indicates that in the US current tax and fee payments to the government by motor-vehicle users fall short of government expenditures related to motor-vehicle use by approximately 20–70 cents per gallon of all motor fuel. (Note that in this accounting we include only government expenditures; we do not include any ‘‘external’’ costs of motor-vehicle use.) The extent to which one counts indirect government expenditures related to motor-vehicle use is a key factor in the comparison.

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    File URL: http://www.escholarship.org/uc/item/5841z3kx.pdf;origin=repeccitec
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    Bibliographic Info

    Paper provided by Institute of Transportation Studies, UC Davis in its series Institute of Transportation Studies, Working Paper Series with number qt5841z3kx.

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    Date of creation: 01 Jan 2007
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    Handle: RePEc:cdl:itsdav:qt5841z3kx

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    Related research

    Keywords: UCD-ITS-RP-07-36; Engineering;

    References

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    1. Proost, S. & Van Dender, K. & Courcelle, C. & De Borger, B. & Peirson, J. & Sharp, D. & Vickerman, R. & Gibbons, E. & O'Mahony, M. & Heaney, Q. & Van den Bergh, J. & Verhoef, E., 2002. "How large is the gap between present and efficient transport prices in Europe?," Transport Policy, Elsevier, vol. 9(1), pages 41-57, January.
    2. Chouinard, Hayley & Perloff, Jeffrey M., 2003. "Incidence of Federal and State Gasoline Taxes," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt5q74052d, Department of Agricultural & Resource Economics, UC Berkeley.
    3. Nash, Chris & Sansom, Tom & Still, Ben, 2001. "Modifying transport prices to internalise externalities: evidence from European case studies," Regional Science and Urban Economics, Elsevier, vol. 31(4), pages 413-431, July.
    4. Henrik Hammar, Asa Lofgren and Thomas Sterner, 2004. "Political Economy Obstacles to Fuel Taxation," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 1-18.
    5. Glaister, Stephen & Graham, Daniel J., 2005. "An evaluation of national road user charging in England," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(7-9), pages 632-650.
    6. Saleh, Wafaa, 2005. "Road user charging: Theory and practice," Transport Policy, Elsevier, vol. 12(5), pages 373-376, September.
    7. Farrell, Séona & Saleh, Wafaa, 2005. "Road-user charging and the modelling of revenue allocation," Transport Policy, Elsevier, vol. 12(5), pages 431-442, September.
    8. Parry, Ian & Small, Kenneth, 2002. "Does Britain or the United States Have the Right Gasoline Tax?," Discussion Papers dp-02-12-, Resources For the Future.
    9. Peter Bickel & Rainer Friedrich & Heike Link & Louise Stewart & Chris Nash, 2005. "Introducing Environmental Externalities into Transport Pricing: Measurement and Implications," Transport Reviews, Taylor & Francis Journals, vol. 26(4), pages 389-415, November.
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    Cited by:
    1. Gonzales, Eric Justin, 2011. "Allocation of Space and the Costs of Multimodal Transport in Cities," University of California Transportation Center, Working Papers qt07x7h9pg, University of California Transportation Center.
    2. Tscharaktschiew, Stefan & Hirte, Georg, 2012. "Should subsidies to urban passenger transport be increased? A spatial CGE analysis for a German metropolitan area," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(2), pages 285-309.
    3. Gonzales, Eric Justin, 2011. "Allocation of Space and the Costs of Multimodal Transport in Cities," University of California Transportation Center, Working Papers qt7s28n4nj, University of California Transportation Center.

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