The Antiplanner is in Washington, DC, today, where Congress remains as gridlocked as ever over federal transportation programs. Though Congress traditionally passes highway and transit bills for six-year periods, the last six-year bill was passed in 2005 and since it expired in 2011 Congress has passed something like two dozen short-term extensions. The longest of these, MAP-21, made a few changes to the 2005 bill but lasted only two years. Shorter extensions, including the two-month extension passed last month, merely continue the status quo.
The federal government takes in about $40 billion in gas taxes per year, and these are dedicated to the Highway Trust Fund which funds both highways and mass transit. The problem is that Congress has been spending something like $52 billion on highways and transit per year and doesn’t know where the other $12 billion will come from. Congress is divided between those who want to cut spending to equal revenues, those who want to increase gas taxes to equal spending, and those who want to find some other source of revenues to cover spending.
Oregon Representative Earl Blumenauer, who favors a gas tax increase, wants to stop the pattern of short-term extensions to force Congress to make one of the three choices. Considering both the administration and most Republicans oppose a tax increase, his proposal was a bold move, and I can’t help but respect him for his stand even if I disagree with him on most federal transportation policies.
The Obama administration wants to change the way American corporations that operate in foreign countries are taxed, increasing tax revenues to the federal government, and to use those revenues on infrastructure programs including the transportation bill. This is called “repatriation,” but the problem is that there is no relationship between corporate tax policy and transportation. On one hand, using repatriation for transportation weakens the user-fee links between transportation agencies and users; on the other hand, if Congress agreed to the change in tax policy, many other interest groups would line up with their hands out for a share of the take.
Though Republicans have the majority of both the Senate and the House, they are far from united about what should be done. The fiscal conservatives want to reduce spending, which might possibly be vetoed by the president. But before they face that hurdle there is the problem that many Republicans don’t want to reduce spending, and that probably includes the chairs of both the House Transportation & Infrastructure Committee and the Senate Environment & Public Works Committee, both of which have to approve the bill.
In the hurry to get immediate results, they even double the dose without consulting their doctors. buy cialis levitra The work and performance on the disease is almost similar to the sample viagra pills. It lets the patients to avail a viagra buy cheap healthy ED treatment. Experts say that sexual problems viagra store in canada are quite common like asthma and other similar diseases, while others are the ones that are only found and experienced in adults. So the consensus is that Congress will pass another short-term extension in July, possibly for two months; possibly for as many as five months. No one holds out hope that a six-year bill will be passed anytime soon.
Fifty-two years ago, Congress had almost nothing to do with transportation. Though it had funded the Interstate Highway System in 1956, it acted mainly as a pass-through organization, taking revenues collected from refineries and oil importers and handing them over to the state highway agencies according to a simple formula. At the time, the United States was known for having the best transportation system in the world.
Since then, Congress has increasingly taken the reigns of transportation policy. It began funding mass transit in 1964. It started tinkering with highway funding, splitting the funds into more and more pots and specifying how each pot could be used, in the 1970s. In 1991, it gave cities incentives to build expensive rail transit projects.
The result has been little short of a disaster. The Interstate Highways are due for replacement yet there is no money to do so because Congress has diverted most of the federal gas tax to other things. Transit requires huge unsustainable subsidies that have done little to increase transit ridership. America’s rail transit systems are in deplorable condition as agencies eagerly build more lines even though they can’t maintain the ones they have.
Yet many members of Congress are convinced that, without their gentle oversight, every wheel in the country would grind to a halt. Insulated inside the beltway and shields of lobbyists eager for a share of federal largess, their main concern is finding phony sources of funds to continue deficit spending, not making sure that the transportation system is working. As The Onion reports–with tongue firmly in cheek but still with some accuracy–the infrastructure we have that is in the best shape is infrastructure that is not funded by the federal government.
Unfortunately, I am reminded of the old Adventure game and its memorable line, “You are in a maze of twisty little passages, all alike.” No matter which way Congress goes, it remains stuck in gridlock.
No matter which way it goes, we simply have got to put a stop to deficit spending.
We have a moral obligation to future generations not to leave them with the misery this kind of lackluster economy the albatross of public debt hanging across their necks will surly bestow them.
Taxes are always a drag on the economy and increasing them always increases that drag, so clearly now is not the time to raise taxes.
“The Interstate Highways are due for replacement yet there is no money to do so because Congress has diverted most of the federal gas tax to other things.”
Don’t tell that to TXDOT. They’ve been replacing lanes on I-35 my entire lifetime. For the last 33 years there has never been a time where at least one section of I-35 between San Antonino and DFW has not been under construction. About 42% of TXDOT’s budget comes from congress and 41% of their expenditures go to highway maintenance and replacement.
“Taxes are always a drag on the economy and increasing them always increases that drag…”
Interesting. Take a quick look here:
http://www.nytimes.com/2013/03/13/business/effectiveness-of-tax-cuts-on-lifting-the-economy-is-unproved.html?_r=0
http://www.forbes.com/sites/greatspeculations/2012/12/05/how-i-know-higher-taxes-would-be-good-for-the-economy/
http://www.economicshelp.org/blog/13566/economics/the-effect-of-tax-cuts/
http://economistsview.typepad.com/economistsview/2012/10/does-taxing-the-wealthy-hurt-growth.html
http://www.alternet.org/story/106979/why_the_economy_grows_like_crazy_amid_high_taxes
Clearly there are reasons not to increase certain taxes, however history shows us that the claim that “taxes are always a drag on the economy,” is patently false. They can be, sometimes, but often this is not the case.
“taxes are always a drag on the economy,” is patently false. They can be, sometimes, but often this is not the case.
Taxes reduce profits and savings/investment. Taxes move spending to non-efficient purposes and help create massive bureaucracy that creates nothing.
An actual study has shown that “corporate tax rates are significantly negatively correlated with cross-sectional differences in average economic growth rate”. While the study states the effects of personal taxes are “less clear,” logic dictates that when government confiscates a third of workers’ payments, workers would have saved, invested, and/or spent that money and chosen where to allocate it.
The gas tax is a prime example of governmental misallocation of resources.
Saw this among the links at the bottom of your ‘actual study’
http://www.sciencedirect.com/science/article/pii/S004727279700011X
Full text is available free elsewhere.
Yes, the full text is available and it turns out this is published by the Federal Reserve. Big surprise there.
That study claims there are “significant investment effects from taxes” but how can that be? Investment is deferred consumption and can only occur after production. Since government isn’t productive and simply extorts the productive to immediately consume, government is incapable of investing.
There are significant effects from both taxation and government debt, and there was a tremor in 2008. Just wait until the big one hits.
What Is the Evidence on Taxes and Growth?
Summarizes 29 peer review academic studies. According to the conclusion Obama’s plan to raise corporate taxes to fund transportation is probably the worst thing congress could do. But he’s a red diaper baby through and through, hopefully the last of the die hard lefties to hold the executive branch.
http://www.cbpp.org/research/academic-research-lacks-consensus-on-the-impact-of-state-tax-cuts-on-economic-growth
http://www.cbpp.org/research/what-really-is-the-evidence-on-taxes-and-growth
Some have called for the privatization of highways across the U.S., so they do not need tax money. But when regular citizens actually experience private operation of such (very nearly always tolled and sometimes very expensive) roads, the experience seems to be quite negative in states like Virginia and California (unlike France, which has an extensive network of autoroutes that are run (and tolled) by private-sector long-term concessionaires). Many of the comments I have heard about the tolled (and privately-operated) Highway 407 in the Canadian province of Ontario are not very favorable either (the private concession owner significantly raised toll rates from what they were under the previous provincial ownership).
Proposals by the state DOT to toll all of I-95 across North Carolina (a freeway badly in need of top-to-bottom reconstruction along many long segments) have been met by loud objection by Republican politicians in the Tar Heel State to impose tolls to pay for same.
Congress has a choice (and is IMO too cowardly to do any of these):
1. Allow large-scale privatization of the interstate (note lower-case “i,” could involve some major roads and bridges that are not part of the Interstate system) highways;
2. Mandate that large urban transit systems that receive federal dollars convert to private-sector operation (which will save taxpayer some money and should result in better service);
3. Allow states to impose tolls on their sections of currently “free” highways, but forbid them to discriminate against out-of-state drivers, as many (most?) public and private toll road operators do now; or
4. Increase the federal motor fuels tax rate significantly.
Yikes! Dueling think tanks. IMHO, long term tax policy is every bit as straightforward and boring as government-mandated minimum wage policy. See: Supply/Demand Curve. There’s a reason why the high tax/big government countries of Europe have had much lower economic growth over the last 50 years than (until recently) the low tax/small government US. Similarly, countries with smaller governments—as a % of GDP—have long term growth rates higher than the US.
It just makes sense. Government spending via redistribution is dead money. It just rearranges the pie. Private spending OTOH makes the pie bigger. Private spending moves the demand curve to the right.
It’s always so terrible when poor people can buy food. So wasteful. Rich people adding to their collection of classic cars they don’t drive, now that’s how you grow the economy.
“It’s always so terrible when poor people can buy food. So wasteful. Rich people adding to their collection of classic cars they don’t drive, now that’s how you grow the economy.”
ahwr, you’re deliberately distorting the argument, and you’re better than that. I will respond to explain what the argument has been and to add on to the argument, in the spirit of an exchange of ideas. However, if you continue to distort and appeal to ridicule, you’ll have shown your true intentions.
First, the argument was that taxes are a drain on the economy. That went on for awhile, and I tend to side with the examination of the peer-reviewed evidence posted by CapitalistRoader. So the conversation, up until your comment, was about taxes and economic growth.
Then you just had to play the “poor starving people” card. Forced charity isn’t charity at all; it’s just force. The initiation of force against another individual is morally wrong.
I could talk about how conservatives donate a higher percentages of their incomes than liberals, but you’d likely appeal to ridicule and attempt to distract from the evidence by chirping about forced indoctrination to Christianity or something along those lines.
I could post a study that shows government “charity” crowds private charity, but instead of discussing the merits of the study, you’d likely post another study you found linked on the same page to distract from discussing that study.
The fact remains that no one here has advocated that poor people starve. I think libertarians in general are very giving people, and the disagreement is not on whether or not the poor should be fed, but how and by whom they should be fed. The problem, from a libertarian point of view, is systemic: government-initiated force to transfer wealth.
So please stop distorting. You’re better than that. Right?
Nothing like empirical evidence. The poor UK. They really need to get fracking.
An insider’s take on Sweden.
I have gone hungery. Top Ramen can be the best thing going, but if gets old. There is no better incentive to get off your butt and go make something of yourself. It worked for me. Enabling people to exist poor as they leach off other folk’s taxes or worse feed off of public debt that future generations will suffer for is no help to them. It only helps liberals who give little to charity feel good.
If you work and earn money and want to buy collector cars, go for it. The folk you buy the cars from feed their families, the farmer who grew the food feed their family and buy fertilizer and seed to grow more, the fertilizer and seed producers make a living and buy………
Being successful is something to be proud of and you can do any legal thing you want with the money you earn. The vast majority of so called rich people worked and earned every penney and many start with nothing.
” The vast majority of so called rich people worked and earned every penney and many start with nothing.”
Agreed. Unfortunately the same is true for the so called poor.