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

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  • Delucchi, Mark

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.

Suggested Citation

  • Delucchi, Mark, 2007. "Do Motor-Vehicle Users in the US Pay Their Way?," Institute of Transportation Studies, Working Paper Series qt5841z3kx, Institute of Transportation Studies, UC Davis.
  • Handle: RePEc:cdl:itsdav:qt5841z3kx
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    1. Chouinard, Hayley & Perloff, Jeffrey M., 2004. "Incidence of federal and state gasoline taxes," Economics Letters, Elsevier, vol. 83(1), pages 55-60, April.
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    4. Ian W. H. Parry & Kenneth A. Small, 2005. "Does Britain or the United States Have the Right Gasoline Tax?," American Economic Review, American Economic Association, vol. 95(4), pages 1276-1289, September.
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    6. Saleh, Wafaa, 2005. "Road user charging: Theory and practice," Transport Policy, Elsevier, vol. 12(5), pages 373-376, September.
    7. 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.
    8. Farrell, Séona & Saleh, Wafaa, 2005. "Road-user charging and the modelling of revenue allocation," Transport Policy, Elsevier, vol. 12(5), pages 431-442, September.
    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. 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.
    2. repec:eee:trapol:v:65:y:2018:i:c:p:126-136 is not listed on IDEAS
    3. 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.
    4. Mark Delucchi & Don McCubbin, 2011. "External Costs of Transport in the United States," Chapters,in: A Handbook of Transport Economics, chapter 15 Edward Elgar Publishing.
    5. Dumortier, Jerome & Zhang, Fengxiu & Marron, John, 2017. "State and federal fuel taxes: The road ahead for U.S. infrastructure funding," Transport Policy, Elsevier, vol. 53(C), pages 39-49.
    6. 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.
    7. McIntosh, C.R. & Wilmot, N.A. & Skalberg, R.K., 2015. "Paying for harbor maintenance in the US: Options for moving past the Harbor Maintenance Tax," Transportation Research Part A: Policy and Practice, Elsevier, vol. 74(C), pages 210-221.
    8. Dumortier, Jerome & Zhang, Fengxiu & Marron, John, 2016. "State and federal fuel taxes: The road ahead for U.S. infrastructure funding," IU SPEA AgEcon Papers 233758, Indiana University, IU School of Public and Environmental Affairs.

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    Keywords

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

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