DeFazio’s Bright Idea

As the Antiplanner previously noted, House Transportation Committee Chair James Oberstar (D-MN) and Highways and Transit Subcommittee Chair Peter DeFazio (D-OR) want to spend $500 billion on transportation over the next six years — which is about $150 billion more than is available. Fortunately, if you think their plan is a good one, DeFazio has a solution: tax futures trades in oil.

This should easily raise $150 billion, DeFazio says, and “it should be wildly popular. I mean, everybody hates speculators.” That’s the ticket: just tax people everyone hates.

Actually, not everyone hates speculators. Speculation can reduce shortages and risk. Some people think speculators are more heroes than heels.
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But whatever you think of speculators, it is a good principle of government to tax anyone that most people hate? This could lead to a lot of questionable and unintended consequences.

Furthermore, contrary to DeFazio’s claim that Enron somehow invented oil futures, the oil futures market has been around for at least 130 years. Can anyone think that taxing oil trades will do anything but raise the price of oil (which may be DeFazio’s hidden agenda)?

The truth is that there is no shortage of money for transportation if we rely on user fees to pay for it. But a user-fee-driven system would probably not result in the kinds of transportation DeFazio prefers, so he wants to tax someone — anyone — so he can impose his desires on everyone else.

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About The Antiplanner

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

21 Responses to DeFazio’s Bright Idea

  1. JimKarlock says:

    The truth is that there is no shortage of money for transportation if we rely on user fees to pay for it.
    Or if ALL currently collected road user money went to roads, not transit and toy trains.

    Light rail – costs too much, does too little.

    Thanks
    JK

  2. bennett says:

    “it is a good principle of government to tax anyone that most people hate?”

    That’s what we do with cigarettes (i.e. smokers). Not sure it’s a good principal, but cigarette taxation hasn’t resulted in anything too dastardly to my knowledge.

  3. ws says:

    Nobody likes the oil industry, but I certainly do not care for a plan like this.

  4. t g says:

    I, the statist troll, like the oil companies. Especially since drilling and exploration have kept my portfolio up 18% since january.
    Taxing oil to reduce consumption is hardly a hidden agenda. Proponents tend to be quite explicit that it would reduce consumption.

  5. the highwayman says:

    JimKarlock said: Or if ALL currently collected road user money went to roads

    THWM: Then you want tolls, gas taxes are user fees on gasoline, not roads.

  6. JimKarlock says:

    THWM: Then you want tolls, gas taxes are user fees on gasoline, not roads.
    JK: Read what I said. “collected” implies NOW, bot a proposal for the future.
    Just use all the money they currently get on roads. Not transit. Not bikes.
    BTWm when you build a road look at cost effectiveness, unlike the Columbia Crossing which is proposing a 4 billion solution to 1/2-1 Billion problem.

    End of problem for a few more years.

    BTW, who pays you to post stupid stuff here.

  7. the highwayman says:

    The whole good roads movement was a result of people riding bikes.

    JK: BTW, who pays you to post stupid stuff here.

    THWM: Why it’s Dick Cheney of course. http://www.youtube.com/watch?v=Q5H7IYPw40Q

  8. JimKarlock says:

    The whole good roads movement was a result of people riding bikes.
    Who then got cars just as soon as they could afford one.

    Just like today in all of the developing world.

    Too bad planners are too out of touch with reality to understand this.

  9. prk166 says:

    Taxing just oil futures? Whiskey Tango Foxtrot, over?!?!???!???

    As much as some politicians want to make out certain taxes as being limited to a small group, these days most any sort of an investment opportunity that is restricted or taxes affects hundreds of millions of people. This one is no exception.

    The question is, will DeFazio be man enough to own up to what he’s really doing when the futures industry shifts away from Chicago and the NYMEX to other countries? It’ll be hard for the Feds to tax those futures when they’re being traded in Toronto, London, Shanghai and Dubai.

  10. the highwayman says:

    JimKarlock said: Just like today in all of the developing world.

    THWM: In our case it’s more like undeveloping.

    Karlock, it the 4th of July & you can celebrate the birth of the US government.

    http://odeo.com/episodes/24018264-To-Anacreon-in-Heaven-mp3-sung-at-Smithsonian-site

  11. Francis King says:

    Jim Karlock wrote:

    “The whole good roads movement was a result of people riding bikes.
    Who then got cars just as soon as they could afford one.
    Just like today in all of the developing world.
    Too bad planners are too out of touch with reality to understand this.”

    Except in parts of Europe, where they started on bicycles, moved to cars, and then moved back to bicycles.

  12. Mike says:

    Francis: No dispute that Europe is “back on bicycles” now, but was it not a significant factor against car use there that the cities, in general, predated cars and thus were not laid out in such a way as to prevent the post-hoc building of a navigable and safe street grid? I mean, comparing, say, Oklahoma City to, say, Seville, Spain — the city maps should just about say all that needs to be said.

  13. Francis King says:

    Mike, most of these cities were set out a long time ago, before bicycles, cars, etc. when most people walked. They had traffic jams in those days, too. The Romans, for example, passed laws limiting the use of ox-drawn carts.

    The problem is that the only space to increase the roads is already occupied by housing and other buildings. Some people have tried to deal with this by planning new city layouts. The UK gave up over London, following the Great Fire of London. The French by contrast, reshaped Paris, to enable their cavalry to better ride down rioters on the streets. Widening the streets made it harder to build barricades, and the straightening of the roads allowed the cavalry to get a better run at the protesters.

    Many US cities have had the same idea with cars and pedestrians.

    🙂

    In Holland, they were just as focussed on cars, as anywhere in Europe, and were determined to put cars first – the great transport hope of the future. But then they decided to go back to bicycles, as a conscious planning decision. The city of Groningen is a good example of this.

    http://www.camcycle.org.uk/events/visits/groningen/

    http://www.carbusters.org/magazine/index.php?issue=38&go=feature1

    The government of Groningen was warned that restricting car use would cost jobs. In fact, the exact opposite happened. The reduction in the number of cars has improved the quality of life, and so students stay on after graduating. Companies then moved to Groningen to take advantage of the massive pool of fresh talent.

    The UK, by contrast is still engaged in a pathetic and destructive love-hate relationship with the car. It is still believed that car ownership boosts the economy, but most of our cars are built outside of the UK, and most of the those built inside in the UK are made by foreign companies. Other companies, deprived of the huge sums of money going into cars are either damaged, destroyed, or unable to get going. City centres are being killed by out-of-town shopping centres, which until they opened people didn’t know that they wanted. Every city-centre shop that closes reduces footfall in the others, and whole town centres are falling like dominoes. Trapped between the need for sprawl to accommodate cars, and the need to keep urban areas sustainable, between congestion charging and the need to get votes, government ministers are running around like headless chickens. One day, inshallah, these ministers will discover that there is something else that they might actually be some use at, and then they can quit.

  14. Mike says:

    Francis: City centres are being killed by out-of-town shopping centres, which until they opened people didn’t know that they wanted. Every city-centre shop that closes reduces footfall in the others, and whole town centres are falling like dominoes.

    This is a problem in the US too, and I’m not sure it’s the car-centric problem you’re characterizing it to be. The big box centers are wiping out downtowns, and nobody has the real answer. On one level, it’s simple capitalism: if people hated the big boxes so much, they wouldn’t empty their wallets there. Until someone trumps that basic truth, it’s hard to justify any attempt at planning that supposes to throw impediments in the way of the big boxes. Just because they’re rich and successful doesn’t mean it’s fair game for the government to tie them down. (That happens anyway, of course.)

    Heck, here in sunny Phoenix, the newly-built won’t-pay-for-itself-for-30-years-if-even-then light rail system terminates at the Phoenix Spectrum Mall, home of… a CostCo, Super Target, and other big boxes. The other terminus is a mile (reachable by free bus shuttle) from the twinned big-box developments of Mesa Riverview and Tempe Marketplace, which together feature basically one of almost every big box store that currently exists, including a Sam’s Club and a Bass Pro Shop. You don’t even have to own a car to kill downtown here, it would appear. Planned transit will get you there.

  15. the highwayman says:

    Power Center’s are an interantional thing.

    http://www.quartierdix30.com/tv/

  16. the highwayman says:

    Mike: Heck, here in sunny Phoenix, the newly-built won’t-pay-for-itself-for-30-years-if-even-then light rail system…

    THWM: LOL, I was just thinking about the doesn’t-have-to-pay-for-it-self-street in front of my house!

  17. Mike says:

    THWM: Preeeeetty sure your street in front of your house didn’t cost $1.4 billion to build. Pretty sure. Also pretty sure it doesn’t cost $184 million per year to maintain. I’m sure you had a point you were trying to push, but you have to stay in the same ballpark if you’re going to make comparisons. That’s why they are called “comparisons”

  18. prk166 says:

    IIRC Gronigen is about the size of Fargo with a climate that’s arguably worse. It’s largely a university town with the other big sector of employment being natural gas. How many jobs outside of the university and gas sector has the town actually added in the last 10 years?

  19. Dan says:

    Gronigen has a maritime climate, which makes it much, much more moderate than continental climate Fargo. And small towns growing…this ‘endless growth’ paradigm is ending, esp. in places with obvious resource limits.

    DS

  20. the highwayman says:

    Mike said: THWM: Preeeeetty sure your street in front of your house didn’t cost $1.4 billion to build. Pretty sure. Also pretty sure it doesn’t cost $184 million per year to maintain. I’m sure you had a point you were trying to push, but you have to stay in the same ballpark if you’re going to make comparisons. That’s why they are called “comparisons”

    THWM: It can be a apples to rocks comparison at times.

    Though it’s still a double standard that you are pushing.

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