Double taxation on city streets

For the anti-toll whiners patriots, and even those who use it to try to get more hits, here’s a story for you.

There’s this guy. His name is Joe Urbanite. He owns a car, which he drives sometimes. He used to walk and bike a lot, but now due to medical problems, can’t bike at all and can only rarely walk. When he drives his car, he usually goes a mile or two to the grocery store on Red River, or downtown via Guadalupe for a show to the main library, or up Speedway to the pool at Shipe Park, or across town on 38th/35th Street to get to his inlaws’ house. Joe’s wife also uses the car a lot to go to the frou-frou grocery stores like Whole Foods (Lamar, 6th) and Central Market (38th). Joe might also use the car later today to go to the hardware store (29th near Guadalupe) to get some wiring supplies. Even when Joe’s going far enough where Mopac or I-35 might be an option, he usually tends to stay away from those highways because he’s found out it’s a bit quicker to stick to surface streets than going through those awful frontage road traffic signals.

Those roads range from very big to merely minor arterials; but we’re not talking about residential streets here. All those roads were paid for out of Joe Urbanite’s property and sales taxes (usually but not always in the form of bonds). And remember, Joe lives in a property which is valued very high per acre compared to Bob Suburbanite, so he’s paying proportionally more in property taxes.

Joe Urbanite goes up Guadalupe to the gas station to fill ‘er up. He notices that the state of Texas has assessed a “gasoline tax” on his fuel. Wow! Neat! Does this money go to pay for the roads Joe used? If so, man, that’s an awesome user fee; barely even a tax at all.

But no. The gas tax in the state of Texas is constitutionally prohibited from being spent on anything but state highways and schools. That means that if it doesn’t have one of them nifty route shields with a number on it, it ain’t getting squat. What about the federal gas tax? In theory, it could be spent on roads outside the state highway system, but it rarely is – most of that money gets dumped right back into big highway projects.

In summary: Joe pays the entire cost to build and maintain the roads he uses out of sales and property taxes. (Compared to Bob Suburbanite, far fewer roads in his area get any state gas tax money). Joe also pays as much in gasoline taxes per-gallon as does Bob Suburbanite, but that gas tax really only goes to build roads for Bob.

So tell me, anti-toll whiners patriots: how, exactly, is Joe Urbanite not double-taxed? And how is this example not much worse than toll roads?

The Gas Tax Isn’t Regressive, Part Three

(at least, not regressive across the spectrum) – as I’ve argued here and here, the gas tax doesn’t hit the poor that hard; it mostly hits the exurban parts of the middle class and leaves the rich alone. From my original article on the subject:

The supposed regressive nature of the gas tax is a fallacy – in fact, poor people spend far less proportionally on gasoline than do the upper-middle-class.
The gas tax isn’t purely progressive; though; the very rich actually spend less proportionally than do the upper-middle-class, due to their tendency to be either in the few healthy downtowns, or less need to drive overall.

Here’s another link I found today which asserts the same:


“A subsidy to new vehicles would be regressive. A tax on
gasoline is not regressive across the lowest incomes but is regressive from middle to high
incomes.”

Note that the internet is replete with sites which say that the gas tax is regressive, but the only articles or studies which actually include any supporting arguments are the few that claim that it isn’t regressive. This leads me to believe that the gas tax ISN’T regressive, for the reasons previously discussed, and that the ‘conventional wisdom’ is wrong here.

This is timely because of a current thread on Environmental Economics on this very subject. Amazingly, I’ve now provided THREE links which are credible and contain supporting evidence for the claim that the gas tax isn’t regressive across-the-board; for the most part blind assertion is still the only support for the ‘regressive’ position. Moral: Conventional Wisdom is hard to fight, even when it’s wrong.

The Gas Tax Ain’t Regressive

Dave Fried talks about the supposedly regressive nature of gas taxes in response to Andrew Sullivan, and uses my blog to make a point about public transportation, but he’s barking up the wrong tree.

The supposed regressive nature of the gas tax is a fallacy – in fact, poor people spend far less proportionally on gasoline than do the upper-middle-class.

The gas tax isn’t purely progressive; though; the very rich actually spend less proportionally than do the upper-middle-class, due to their tendency to be either in the few healthy downtowns, or less need to drive overall.

Poor people as a rule simply DON’T drive as much as you middle-class people think. The people you think are poor who you see driving everywhere are actually the lower rungs of the middle-class; and they’re doing it in much more fuel-efficient vehicles than their upper-middle-class SUV-drivin’ non-neighbors. Even the poor people who own cars (and most do, around here) often leave them parked during the day. Drive around East Austin at 10:00 on a weekday and you see a lot of driveways with older Japanese cars parked in them (with a few 80s-vintage American cars which still get much better mileage than do SUVs). Now drive around Great Hills and see how many cars you see parked which aren’t for stay-at-home moms.

Poor people, in every metropolitan area with which I have a passing familiarity, are also concentrated in urban areas or the oldest (inner-ring) suburbs. (Don’t bother me with anecdotes about the rural poor; we’re talking macro scale here). Guess what that does to the number of miles they must drive?

Ride the bus sometime if you want to see real poor people. Trust me on this one.

The other problem with this analysis is that it ignores other sources of roadway funding, such as property and sales taxes, which in this state are a huge portion of revenues for roads (even state highways). Due to the fact that poor people here live in areas which still proportionately get taxed at a higher rate than due the exurbs, they’re ALREADY being taxed regressively. The gas tax evens it out a bit, in fact.

Some supporting articles (note: links changed to web archive in 2020 as the originals have turned into 404s):