New Jersey’s Transportation Trust Fund is running on empty. The trust fund pays for road maintenance mainly through sales taxes on transportation fuel like gasoline and diesel fuel. NJ politicians, namely Republican Governor Chris Christie and the Democrat controlled legislature, have been kicking around various tax-neutral plans that raise the gasoline tax in exchange for tax cuts elsewhere, such as reducing the state sales tax, eliminating the estate tax, or cutting retiree income taxes.
These plans have been going nowhere. As of this writing, no gasoline tax legislation has been passed. But one thing that almost all NJ politicians agree on is that roads should be funded through gas taxes. This seems fair, given that the burden of paying for the roads is roughly proportional to road use.
However, a recent letter by correspondent Ronald A. Sobieraj (Raise income tax and exemption) and published in the NJ Star-Ledger suggests otherwise. In the name of “fairness,” Sobieraj calls for roads to be “paid from the general funds and not from a dedicated tax. Roads and highways benefit everyone,” he rationalizes, “not just buyers of gasoline. Could today’s world exist without automobiles?”
First, let’s examine the idea that “everyone benefits.” That’s a common rationalization to justify coercive government programs that force people to pay for goods or services that they do not choose to fund voluntarily, or in the way the government programs demand. We’re all told that we benefit from an educated society. But do we all benefit in the same way? No. I don’t benefit from tobacco products. So, why should I have to pay for the education of tobacco workers? There are all sorts of goods and services I don’t benefit from, yet am forced to pay for through my education taxes.
Now consider roads. We all benefit. Granted. But we benefit in different ways and contexts. An elderly person who doesn’t own a car, but instead gets around using taxi service or Uber, pays indirectly, through the service fees. The stores she shops in stock their shelves with goods delivered using roads. The transportation costs are included in the price she pays for the goods. So she pays indirectly, as and when she needs it. Why should she have to pay extra, through a general tax?
Which leads to Sobieraj’s suggestion for paying for the general funds—soak the rich. Yes, soak the rich. “I suggest the top income tax rate be raised and the standard income tax exemption also raised to exceed the federal amount,” he writes. Well! Let’s raise taxes, but only on the other guy. That’s original! Force the economically successful—which of course means “more successful than me”—to hand us free roads!
What can be less fair than forcing a small minority to subsidize the road use for the rest of us?
Sobieraj does make one good point: Raising the gas tax while lowering the general sales tax “would provide a subsidy to those who buy those expensive electric cars.” It’s true that gas taxes give electric car users a free ride (so to speak). Some have suggested switching to a mileage-based tax to compensate.
That aside, Sobieraj’s ideas for funding the government roads is just another immoral wealth redistribution scheme. In a fully free society, roads would be privately owned and maintained, and entrepreneurs would find ways to fairly charge users. Until that day, road user taxes, such as gasoline taxes, is among the fairest ways to fund the roads.
How Would Government Be Funded in a Free Society?—Craig Biddle